author: MR. JUSTICE WEBER MR. JUSTICE McDONOUGH,

text:
    DEAN DURAND, d/b/a Durand Construction Co., Frank K. Mutch and Mary E. Mutch d/b/a Flathead Electric Service, and Duane H. Lien, d/b/a Main Harbor Plumbing, Heating and Pumps, Plaintiffs and Appellants, v. JOHN DOWDALL and J.D. Dupuis, Defendants and Respondents.
    No. 87-512.
    Submitted April 26, 1988.
    Decided June 16, 1988.
    Rehearing Denied July 14, 1988.
    757 P.2d 1302.

      Ingraham Law Office, Greg L. Ingraham, argued, Ronan, for plaintiffs and appellants.
    Boone, Karlberg & Haddon, Sam E. Haddon, argued, Missoula for defendants and respondents.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Plaintiffs Durand, Mutch, and Lien appeal a judgment entered in favor of defendants by the Twentieth Judicial District Court, Lake County, sitting without a jury. We affirm. The issues are:

1. Did the District Court err in concluding that plaintiffs had no valid mechanic’s liens upon the defendants’ property?

2. Does merger of the leasehold and the fee permit enforcement, against the fee, of a lien upon the leasehold?

3. Should plaintiffs be allowed to recover under the theory of quantum meruit?

4. Was the claim of appellant Mutch, d/b/a Flathead Electric, barred due to untimely filing of the lien?

Defendants John Dowdall and Joyce Dupuis, co-owners of a parcel of property in Poison, Montana, entered into a “Premises Lease and Option to Purchase Real Estate” with Edward Mills in July 1984. Prior to the time Mr. Dowdall and Ms. Dupuis (Lessors) had purchased the property it had been used to operate a service station. Pertinent provisions of the agreement with Mr. Mills (Lessee) appear below:

“5. USE OF PREMISES. The real property herein described shall be leased for the purpose of operating a fast food business known as BURGER INNS of AMERICA, Montana Division, and for no other purpose.
“6. IMPROVEMENTS AND FIXTURES. It is understood that LESSEE intends to make substantial improvements upon said real property in order to make it suitable for the operation of his business. It is further understood that at the expiration of the lease, LESSORS shall be vested with all right, title and interest to any and all improvements and fixtures attached to the real property, in the event LESSEE fails to exercise his option to purchase. At the expiration of the term of the lease, LESSEE shall have no further interest in the real property or in any improvements or fixtures located thereon.
“7. MECHANIC’S LIENS. In any and all contracts, written and oral, executed by LESSEE for any materials, or for any construction on or repair of any existing or future improvements located on the real property, LESSEE shall include language to the effect that he is solely responsible for the cost of all labor and materials purchased by or for him, and that the contractor, subcontractor, materialman, or supplier waives any right to file a mechanic’s lien on the said real property and any and all causes of action he may have against LESSORS as owners of the real property.”

In August 1984 Lessee contracted with plaintiff Durand for “extensive” demolition and remodeling of the service station into a restaurant. Mr. Durand provided labor and materials for the project for about two and one-half months, but when it became clear that Lessee was not going to pay him, Mr. Durand pulled off of the job. In December, Mr. Durand filed a mechanic’s lien against the property for $23,030.87, the total value of labor and materials furnished by Durand Construction Company.

Plaintiff Duane Lien has a plumbing and heating business in the Poison area. Lessee contracted with Mr. Lien for renovation and remodeling of the plumbing on the subject property. Mr. Lien began in August and pulled off of the job in October just as Mr. Durand had. In December Mr. Lien filed a mechanic’s lien against the property for $3,032.84, the total value of labor and materials furnished by him.

Plaintiff Frank Mutch contracted with Lessee to provide electrical work for the project, in August 1984. He alleges he worked on the project up through January 16, 1985. He filed a mechanic’s lien against the property on March 5, 1985, for $8,941.16, the total value of labor and materials furnished by him.

Plaintiffs then brought this action to recover on their liens. The District Court concluded that the liens were invalid and did not constitute liens or encumbrances against Lessors’ property. The court ruled that the mechanic’s liens filed by plaintiffs attached only to Lessee’s interest in the property which had been canceled and terminated. The court also made the following determinations:

“[That] Plaintiffs have . . . failed to show any consent by Defendants to the contracts between Mills and Plaintiffs and failed to prove any ratification thereof by Defendants.
“That none of the contracts by Plaintiffs were completed. Each Plaintiff pulled off the job before work was completed because Mills did not pay for work performed to that point. None of the Plaintiffs ever billed either of the Defendants for work done or materials provided, and all of the Plaintiffs billed only Mills for their claims.
“That the property in its present condition, which is the same condition as existed when Plaintiffs discontinued work, is unusable for any commercial purpose. Electrical work is incomplete. Interior finishing is incomplete. Fixtures and equipment necessary to make the premises usable as a restaurant or for any other commercial purpose are not present and available.
“That at the time the property was leased to Mills it had a fair market value of $128,000.00. In its present condition the property is not usable for any commercial purpose and an expenditure of approximately an additional $12,000.00 to $30,000.00 would be required to make the property usable for a commercial purpose. The property is also not now suitable for any non-commercial use.
“That the work undertaken by Plaintiffs to date has not enhanced the value of the property.”

I

Did the District Court err in concluding that plaintiffs had no valid mechanic’s liens upon the defendants’ property?

The plaintiffs question the District Court’s judgment in several respects as it relates to this issue. Much of their argument centers upon their theory that a contract for improvements arose by implication between Lessors and themselves. The trial court rejected that theory. We need not address this argument as we determine the issue by answering the following inquiry:

Did the court err in concluding that none of the plaintiffs substantially completed the work, and, by implication, that they therefore had no right to assert liens upon the property?

The plaintiffs accept the general rule in Montana stated in Bauer v. Cook (1979), 182 Mont. 221, 224-25, 596 P.2d 200, 202, that a mechanic’s lien arises only upon completion or substantial completion of the contracted work. They rely upon an exception recognized in Bauer, 596 P.2d at 203, which arises when the laborer or material-man has been prevented from completing the work by the breach of the owner or third party. Plaintiffs argue that Lessee’s failure to pay when payment was requested constituted a breach by a third party which prevented completion of the work. We conclude that Inter-mountain Electric, Inc. v. Berndt (1974), 164 Mont. 67, 518 P.2d 1168, is controlling. That case was explained in Bauer, 596 P.2d at 203:

“However, in Berndt, involving substantially the same question, we found nothing in the record to suggest that the contractor’s failure to make a payment actually prevented the subcontractor-lienholder from completing the work. There was no evidence to indicate that the subcontractor was entitled to demand any money from the contractor at the time it submitted a bill, nor was there any proof that prompt payment by the contractor and time were of the essence to completion of the work. Finally, because the subcontractor did not go to the homeowners and ask them for payment of the bill or ask them if they wanted the work completed, we concluded the subcontractor had willfully and voluntarily abandoned the contract before there had been substantial performance of its terms.”

In the present case, the record does not contain evidence that Lessee’s nonpayment prevented the plaintiffs from completing the work they had contracted to do. Plaintiffs presented no evidence that they were entitled to demand money from Lessee at the time they submitted their demands, nor did they present evidence that time and prompt payment by Lessee were of the essence to completion of their work under the contract. Further, they did not request payment by the Lessors, and they did not ask if Lessors wanted the work completed. In Gramm v. Insurance Unlimited (1963), 141 Mont. 456, 378 P.2d 662, we upheld a mechanic’s lien on real property. We concluded that the contract clearly provided for prompt payment of installments by the homeowner to the contractor and time was of the essence. Gramm, 378 P.2d at 664. Plaintiffs failed to establish similar requirements in their contracts with the Lessee. In addition, plaintiffs have failed to establish that they relied upon the Lessors for payment and that they granted to the Lessors the opportunity to have the work completed.

If substantial evidence exists in the record to support the district court’s judgment, we will not disturb that judgment. Berndt, 518 P.2d at 1171. In this case, the interior ceiling was not installed; the interior walls were not completed; painting was not completed; the wiring was not completed; none of the necessary electrical fixtures were in the building; the plumbing was not completed; and the walk-in cooler did not have doors. The cost to complete the work could be as much as $30,000. The property was not usable for any commercial purpose. None of these facts have been contested by the plaintiffs. We conclude that substantial evidence exists to support the lower court’s determination that the plaintiffs had not substantially completed the work they had contracted to perform.

Because plaintiffs had not substantially completed the contracted work, their liens were prematurely filed. Western Plumbing of Bozeman v. Garrison (1976), 171 Mont. 85, 88-89, 556 P.2d 520, 522. Therefore, we affirm the District Court’s holding that the plaintiffs have failed to establish valid liens against the Lessors’ property.

II

Does merger of the leasehold and the fee permit enforcement, against the fee, of a lien upon the leasehold?

The plaintiffs assert that when the Lessee abandoned the leasehold, the leasehold merged with the Lessors’ fee interest. They then urge that principles of equity would permit enforcement of the liens against the Lessors’ interest. This argument, however, relies upon a valid lien. Without passing upon the merit of plaintiffs’ underlying theory, our holding under Issue I renders consideration of this issue unnecessary.

Ill

Should plaintiffs be allowed to recover under the theory of quantum meruit?

The plaintiffs argued that the value of the property was enhanced by their work. The District Court found that the work had not enhanced the value of the property. Both plaintiff Durand and defendant Dowdall testified that the property is not now usable for a service station, a restaurant, or any other commercial use. The court determined that the property also was not suitable for any non-commercial use. The record contains substantial evidence to support these findings; therefore, they will not be disturbed. With this in mind, principles of equity do not weigh in favor of the plaintiffs’ claim for quantum meruit. We hold that plaintiffs may not recover expenditures for their work under theory of quantum meruit.

IV

Was the claim of appellant Mutch, d/b/a/ Flathead Electric, barred due to untimely filing of the lien?

We need not consider this issue in light of our holding as to Issue I.

Affirmed.

MR. JUSTICES HARRISON, SHEEHY and GULBRANDSON concur.

MR. JUSTICE McDONOUGH,

concurring and dissenting:

I concur with the District Court’s holding that Mutch, d/b/a Flathead Electric, has no valid lien on defendants’ property.

However, Plaintiffs Durand and Lien have a valid mechanic’s lien against the defendants’ property, as defendants consented in advance to the improvements. Morin Lumber Co. v. Person, et al. (1939), 110 Mont. 114, 99 P.2d 206. The lien statutes must be construed liberally in favor of the lien claimants to promote the purposes and objectives of such statutes. In Fausett v. Blanchard (1969), 154 Mont. 301, 463 P.2d 319, this Court stated as follows:

“In support of this argument respondents cite Morin Lumber Co. v. Person, supra, as holding that there need not be a direct contract between the lessor and the lienor but only that the owner must consent in advance to the improvement either expressly or impliedly, or subsequently ratify what has been done. This is a worthy argument based on a humane policy of protecting the laborer and materialman and there is ample authority to support it. This Court, in upholding a lien against improvements, in Caird Engineering Works v. Seven-Up Gold Mining Co., 111 Mont. 471, 479, 111 P.2d 267, 272, held:

“This court is committed to the view that our lien statutes should receive a liberal construction to'the end that the objects and purposes of the statutes may be carried out .... The statute giving the right to a lien is paramount to the conditions of the leases.’
“Nor do we find merit in appellant’s contention that the lien holders waived their lien rights due to the provision in the lease absolving the appellant property owner from all liens. Labor and material-man’s lien laws should be interpreted liberally to protect the right of the lien.”

Fausett, 463 P.2d at 322-23.

By the terms of the lease with Mills the defendants knew that substantial improvements were to be made to the property. Defendant Dowdall visited the site when the demolition and remodeling were being done. Major structural changes were made. Interior walls were torn down and the building enlarged. Defendant Dowdall also sold the service station hoist during this time and arranged for its removal by the buyer, for the benefit of the remodeling project.

The majority opinion determines this case on the following inquiry: Did the court err in concluding that none of the plaintiffs substantially completed the work and by implication that they therefore had no right to assert liens upon the property?

In deciding this inquiry we look at the contracts between the Lessee Mr. Mills and the plaintiffs Mr. Durand and Mr. Lien. Each of these contracts were oral. Mr. Mills would inform each of the contractors what was to be done, orally and on an ad hoc basis. There were no plans and specifications. The uncontroverted testimony of both Mr. Durand and Mr. Lien stated that each went as far as he could under the instructions given to them by Mr. Mills. A portion of Mr. Durand’s testimony under questioning by his attorney is as follows:

“Q. Wasn’t it a piecemeal project?
“A. Yes, it was, definitely. If you want an explanation of it, Ed Mills had planned a Burger Inn that apparently — they were built new around the state or wherever the Burger Inns were at. The first one I ever seen was this sign out here and he had a plan of putting this thing together.
“He pretty much would lay out what we were to do when he came over. The basic structure, of course, had to be turned into what I would call a newer type of building where it had some insulation in it. That could be done without really much instruction from Ed Mills but as far as setting it up for all the equipment and how he wanted windows placed, the drive-up window and the doors and so on and so forth, he pretty much told me what to do when I would speak to the man.
“Q. And when you came to the end of that particular parcel of the project, you would wait for Ed Mills for further instructions?
“A. I believe all of us were waiting for further instructions from Ed Mills.
“Q. And at the time you pulled off the job, had you completed that particular section?
“A. I completed everything I could up to that point.
“Q. So you could continue no further on the project?
“A. Not without further instructions.”

The testimony of Mr. Lien as he was questioned by his attorney follows:

“Q. Were you piecemealing the project as Dean has testified to?
“A. Pretty much, yes.
“Q. When you walked off the job, as they have stated, had you completed everything you possibly could do at that time?
“A. Everything on our part was 100 percent finished because the fixtures, sinks — whatever type they wanted to put in — facets, were to be furnished by the Burger Inn from what we understood, yes.”

It was pointed out by Mr. Lien that a sewage sump pump could have been installed because he had been instructed by Mr. Mills to check the old one and it did not work. Mr. Lien stated he did not do so because he was not instructed to do so and because of the nonpayment for work already done.

Both Mr. Durand and Mr. Lien billed Mr. Mills for materials and services at the end of the first month of construction, and their uncontroverted testimony is that after Mr. Mills received Mr. Lien’s bill he told Lien, “I’ll get it to you one of these days,” meaning the payment. Also after receiving Mr. Durand’s first bill Mr. Mills stated to Durand, “I’ll get the money right away.” Other assurances of payment were made by Mr. Mills. The action by Mr. Mills in not providing the mechanics with further instructions to complete the project and the breach of the agreements that he would pay for the work billed, prevented the mechanics from completing the work. Bauer v. Cook (1979), 182 Mont. 221, 596 P.2d 200. In Smith v. Guiness, (1943) 115 Mont. 362, 144 P.2d 186, this Court stated:

“One who prevents or makes impossible the performance or happening of a condition precedent upon which his liability by the terms of a contract is made to depend cannot avail himself of its non-performance. In other words, he who prevents a thing from being done shall never be permitted to avail himself of the non-performance which he himself occasioned. 12 Am.Jur., Section 329, p. 885.
“The abandonment of an improvement before the completion thereof, by the owner of the premises, without fault on the part of the contractor, does not abrogate the right of the contractor, laborers, and material men to mechanics’ liens for the value of the work done and the material furnished. In such case, the building or improvement is to be deemed completed, so far as the rights of persons to assert liens is concerned. 36 Am.Jur., Section 35, p. 38.”

Smith, 144 P.2d at 191.

On the basis of the uncontroverted testimony of Mr. Lien and Mr. Durand, Mr. Mills did breach his contract by failing to pay as promised. The contractors went as far as they could without receiving further instructions which were not given. Therefore, they were prevented from completing their contract and were entitled on the basis of Smith v. Guiness to file a mechanic’s lien.

MR. CHIEF JUSTICE HASWELL, retired, sitting for MR. CHIEF JUSTICE TURNAGE, and MR. JUSTICE HUNT concur in the foregoing.


source: Caselaw Access Project

author: MR. JUSTICE SHEEHY MR. JUSTICE McDONOUGH

license: Public Domain

text:
    In re the Matter of the ESTATE OF MERLYNN E. GREENFIELD, a/k/a Merlynn E. Kraft Greenfield, Deceased.
    No. 88-004.
    Submitted on Briefs March 31, 1988.
    Decided June 16, 1988.
    Rehearing Denied Aug. 11, 1988.
    757 P.2d 1297.

      Mark P. Yeshe; Harrison, Yeshe and Murphy, Helena, for appellant.
    Richard L. Parish, Harlen, Thompson and Parish, P.C., Helena, for respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

William L. Greenfield, Janet Tenesch and Nancy Schmidt, as appellants, appeal from an order of the District Court, First Judicial District, Lewis and Clark County, granting summary judgment in favor of Thomas Marx, personal representative of the estate of Merlynn Greenfield, as respondent. We affirm.

The following issues are presented for our review:

1. Did the District Court err granting summary judgment?

A. Did the District Court err in determining that the Greenfield partnership referred to in a holographic instrument was without property at the time of the decedent’s death and as such was unable to successfully devise partnership property; and,

B. Did the District Court err in excluding extrinsic evidence which the appellant alleged was necessary in order to identify the property described in the devise and effectuate the desires of Merlynn Greenfield.

The record discloses the following pertinent facts. Merlynn Greenfield died on October 11, 1984. Following Merlynn Greenfield’s death two documents were submitted to the District Court for probate. The first document is a will duly executed on April 4, 1975 appointing her brother, Thomas Marx (respondent) as personal representative of her estate. The second document admitted to probate is a four page holographic document entitled Merlynn E. Greenfield’s Last Will and Testament dated November 1, 1983. The holographic instrument contained no testamentary declarations outside of the title and was comprised almost exclusively of a list of personal property and her desired disposition of such property. There is no language in the document to indicate that it was intended to act as a codicil, amendment or revocation of Merlynn’s 1975 will. Neither the 1975 will nor the 1983 holograph provide for the disposition of the residuary estate.

The controversy which is the basis of this appeal concerns one item on the 1983 instrument that appears to be an exception to the general disposition of miscellaneous items. It appears on page 3 and reads as follows:

“If anything is left of Greenfield Partnership to be split between William L. Greenfield, Janet Tenesch, and Nancy Schmidt [appellants].”

In order to understand the controversy surrounding this seemingly innocuous devise, it is necessary to delve into some background concerning the “Greenfield Partnership.”

William C. Greenfield and Merlynn Greenfield were husband and wife. William C. Greenfield, together with Henry Greenfield (William’s Brother) and Ann Jancic (William’s sister) owned property in Lewis and Clark County as well as in Sanders County as tenants in common. William Greenfield owned 41 2/3% of the property while his brother and sister each owned 29 1/6% of the property. On August 10, 1983, William C., Henry and Ann executed a partition agreement. The partition stated that the involved parties wanted the property partitioned in accordance with each parties’ respective interests, and in the event any of the property was sold, the net proceeds from the sale were to be distributed in accordance with each parties’ respective interest regardless of which one of the parties was the owner of record. William C., Henry and Ann filed partnership income tax forms.

William C. Greenfield died August 23, 1983 approximately two weeks after executing the partition agreement. William C.’s estate was willed in equal portions to his wife, Merlynn (who was made executrix) and his three children, William L. Greenfield, Janet Tenesch and Nancy Schmidt, the appellants. Merlynn was named personal representative of the estate and Ada Harlen, William C.’s attorney was named as successor personal representative.

During the course of probate of William C.’s estate, some of the properties were sold, the proceeds being distributed to William C.’s estate .(41 2/3%), Ann Jancic (29 1/6%) and Henry Greenfield (29 1/6%) as determined by their respective interest. In order to facilitate the distribution of proceeds, Merlynn, Ann and Henry opened a bank account in the name of the “Greenfield Partnership” so that as payments came in, expenses could be paid, and the funds could then be distributed to the parties, according to their interests as tenants in common.

William C.’s estate was divided in four equal parts between Merlynn and William C.’s three children. Each received approximately a 10% interest in the property that was the subject of the August 10, 1983 partition agreement. The 41 2/3% tenancy in common in William C.’s interest in the real property that had not been sold was assigned to Merlynn, William, Janet and Nancy as tenants in common in equal shares. William C.’s interest in property that had been sold was assigned in like fashion (with the exception that Merlynn’s share accrued to her estate as she had died prior to execution of the assignment.)

Following Merlynn’s death and the admittance for probate of her 1983 holographic will a dispute arose between the appellants and the respondent ovér the devise concerning the Greenfield partnership. The respondent sought summary judgment as to the disputed devise, and the District Court granted the respondent’s motion holding that the appellants were not entitled to take anything under the disputed devise in the 1983 holographic instrument. The appellants appeal.

Appellants contend that the District Court erred in granting respondent’s motion for summary judgment as genuine issues of material fact exist. We disagree.

The standard of review for an appellate court in reviewing an order for summary judgment is the same as that used by the District Court under Rule 56, M.R.Civ.P. Mayer Bros. v. Daniel Richard Jewelers, Inc. (Mont. 1986), [223 Mont. 397,] 726 P.2d 815, 816, 43 St.Rep. 1821, 1822; Kronen v. Richter (Mont. 1984), [211 Mont. 208,] 683 P.2d 1315, 1317, 41 St.Rep. 1312, 1314.

Rule 56(c), M.R.Civ.P., provides in pertinent part:

“The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”

The disputed holographic devise at the center of the controversy provides that “if anything is left of Greenfield partnership,” it is to be divided among the appellants. Appellants contend there is a genuine issue of material fact regarding Merlynn Greenfield’s intent when composing this devise and as such, summary judgment was an inappropriate device with which to resolve the question. We find the contrary to be true.

Appellants maintain that a question of intent arises when a document is not clear on its face. However, the disputed provision is clear and unambiguous.

Montana’s rules regarding construction of wills are well settled. Section 72-11-302, MCA, provides:

“The words of a will are to be taken in their ordinary grammatical sense, unless a clear intention to use them in another sense can be collected and that other can be ascertained.”

Section 72-11-303, MCA, provides:

“The words of a will are to receive an interpretation which will give to every expression some effect, rather than one which will render any of the expressions inoperative.” (Emphasis added.)

Section 72-11-309, MCA, provides:

“Technical words in a will are to be taken in their technical sense unless the context clearly indicates a contrary intention.” (Emphasis added.)

Applying the above delineated rules of construction to the disputed devise there can be no question as to what Merlynn Greenfield intended with her devise. The language utilized by Merlynn Greenfield in composing the devise shows that she was cognizant of the possibility that there would be nothing left of the partnership and that she intended the devise to be effective only if the partnership had property at the time of her death.

Merlynn Greenfield’s devise bequeathed the property, if any, left in the Greenfield partnership to William L. Greenfield, Janet Tenesch and Nancy Schmidt. Thus, as the District Court correctly noted the dispositive question is, did the Greenfield partnership own any property at the time of Merlynn’s death October 11, 1984.

The Greenfield partnership was merely a conduit through which the partners conducted their tenancy in common business and reported income for tax purposes. An examination of the evidence presented leads us to the unequivocal conclusion that the “Greenfield Partnership” owned no interest in real property at the time of her death. The Greenfield partnership had no land assigned, leased, deeded or sold to it. In fact, there is no evidence that the partnership owned or held title to any land, rather title was held by individual partners as fee holders or tenants in common. Further there is nothing in the record to suggest that any of the partners abandoned or transferred only of the their real property interests to the partnership. As such, the District Court correctly determined that no partnership property should pass under the disputed devise in the holographic will.

Appellants next contend that the District Court erred in failing to consider extrinsic evidence. Appellants maintain that resort to extrinsic evidence is necessary as the term “Greenfield Partnership” is not sufficient to identify the property Merlynn Greenfield intended to bequeath. The extrinsic evidence would apparently show that Merlynn wanted her share of William C. Greenfield’s estate to go to the appellants instead of to heirs named in her Will.

The word “partnership” must be given its technical interpretation as the context of the holograph does not clearly indicate a contrary intention. Section 72-11-309, MCA. Further, the qualifying phrase “if anything is left” must be given effect when construing the devise. To ignore the contingent language would violate the rules pertaining to construction of wills. In Re Estate of Erdahl (Mont. 1981), [_ Mont. _,] 630 P.2d 230, 38 St.Rep. 978. See also, Section 72-11-303, MCA.

It is our opinion that the devise is clear as to what property Merlynn intended to devise to the children of William L. Greenfield — namely, that property, if any, owned by the “Greenfield Partnership” at the time of her demise. Merlynn’s intention can be ascertained from the language of the devise alone. It was not necessary, nor would it have been proper, for the District Court to receive extrinsic evidence in order to determine what property Merlynn intended to devise. The plain meaning of the language employed speaks for itself.

We hold the District Court properly granted the respondent’s motion for summary judgment. We affirm.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, GULBRANDSON and HUNT concur.

MR. JUSTICE McDONOUGH

dissenting:

There are at least three material questions of fact: 1) whether William C. Greenfield, Henry L. Greenfield and Ann Jancic were partners in dealing with the real estate and the proceeds therefrom; 2) whether Merlynn E. Greenfield, her stepchildren, Ann Jancic and Henry L. Greenfield, intended to and did form a partnership to handle the real estate and the personal property proceeds therefrom; 3) what specific property was intended to be in either partnership. The majority errs because resolution of these factual questions must precede the determination that no partnership property existed.

The parties’ intentions as to allegedly forming a partnership should be ascertained as a question of fact. 59A Am.Jur. 2d Partnership Section 78 (1987). The intentions of the parties to form a partnership may be implied. It need not be expressed in writing or orally if it can be derived from the parties’ actions. 59A Am.Jur. 2d Partnership Section 152 (1987). Once it is found that a partnership was formed, the intent of the partners generally determines what property will be considered partnership property as distinguished from separate property, and this is also a question of fact. 59A Am.Jur. 2d Partnership Section 354 (1987).

The partition agreement mentioned in the majority opinion executed within 2 weeks of William C. Greenfield’s death does not appear to have been carried out. The inventory and appraisement filed in William C.’s probate listed the property at issue as a percentage interest (41 + %) belonging to William C. In addition, the agreement is confusing and ambiguous. Furthermore, other evidence in the record infers the existence of the partnership and partnership property at the time of Merlynn’s death.

Prior to William C.’s death the proceeds from the sales of real estate all went into one account, expenses were paid out of the account, and the profits were distributed from the account as to the percentage of ownership. The partition agreement continued to provide the same division of the profits. Prior to William C.’s death the siblings signed and filed income tax returns as a partnership and the affidavit of Ann Jancic states they considered themselves to be partners.

After William C.’s death, the testator here who was also the personal representative of William C.’s estate, closed out the old account and opened a new account in the name of the “Greenfield Partnership”. Additional lands were sold by Ann, Henry L., Merlynn and the stepchildren during the course of the probate of William C.’s estate and some of the lands were sold on a contract for deed. Again, the proceeds went into the partnership account, expenses were paid out of the account, and amounts were from time to time distributed. The existence of these transactions by the testator, and by Ann Jancic, Henry L. Greenfield and the testator’s three stepchildren, and the way these transactions were handled by their attorney and accountant, imply there was a partnership.

Other transactions also support the existence of a partnership. Partnership returns were filed after the death of William C. for the years 1984 and 1985 and the testator, who died in 1985, is listed on the returns for 1984 as a partner. A sales agreement for some of the land sold after the death of William C., which the testator signed, listed the Greenfield Partnership as seller. The testator’s notes to her stepchildren mentioned the “Greenfield Partnership”. A testator’s letter of July 1984, mentions the “partnership”.

There is a question of fact as to the intent of the parties. Facts showing that the parties called it a partnership, filed tax returns as a partnership, payed bills as a separate entity, referred to the partnership in writing, all raise questions as to a partnership’s existence and its holdings. These questions should be answered by a jury or other trier of fact.

There is also a question of what particular property is treated as partnership property. Assuming that the real estate partition agreement is construed as provided in the majority opinion, the inventory and appraisement of the testator’s estate lists considerable property as personal property which is anticipated proceeds from the sale of the real estate under contracts for deeds. There is money in escrow accounts, originally derived from these contracts for deeds. There was also money in a partnership bank account at the time of the testator’s death.

Finally, there remains the question of the testator’s intent in the holographic writing. Here again it is a question of fact. The clause is ambiguous, written by a lay person. If there is not a partnership, did she intend to bequest and/or devise what she and others called the “Greenfield Partnership”. The testator at the time of her death was 45 years of age. Her death certificate shows that the death resulted as of a sudden illness. It cannot be assumed that she felt that the “Greenfield Partnership” only applied to what has been determined to be a partnership between her husband and his sister and brother. I think there is a very material question of fact as to what she meant by the words “Greenfield Partnership” and what property was included.

I would reverse the summary judgment and remand to the District Court.

MR. JUSTICE WEBER concurs in the foregoing dissent.


text:
    In the MATTER OF CLARENCE THOMAS BELUE, an attorney and counselor at law, Respondent.
    No. 86-340.
    Decided June 21, 1988.
    766 P.2d 206.
   OPINION AND ORDER

The Commission on Practice of the Supreme Court of the State of Montana filed a complaint in this Court charging Clarence Thomas Belue with various violations of the Rules of Professional Ethics which apply to attorneys licensed to practice in the State of Montana. On July 21, 1986, a citation was issued to Mr. Belue. In accordance with that citation, the Answer of Mr. Belue was filed in this Court on September 18, 1986. Ultimately a two and one-half day hearing was held before the Commission on Practice, commencing on September 21, 1987, at which a quorum of the members of the Commission were present. Robert C. Smith acted as special counsel. Mr. Belue was personally present and was represented by Gregory O. Morgan. Evidence was presented by Mr. Smith on behalf of the prosecution and by Mr. Morgan on behalf of Mr. Belue. Subsequently the Commission on Practice issued its findings, conclusions, and recommendations dated January 21, 1988, which were filed in this Court on January 27, 1988. The Commission on Practice recommended that Mr. Belue be suspended from the practice of law for three months, that Mr. Belue be publicly censured, and that Mr. Belue pay all costs of the proceedings before the Commission on Practice as a condition precedent to reinstatement to the practice of law. A copy of the report was served upon Mr. Belue and his counsel and also upon Mr. Smith as special counsel. The findings and recommendations of the Commission are detailed and lengthy and may be examined by interested parties in the office of the Clerk of the Supreme Court.

On March 31, 1988, the Crow Indian Tribe filed an amicus curiae brief in this Court. On April 4,1988, the brief of Mr. Belue containing his objections to the Commission on Practice findings and conclusions was filed in this Court. On May 9, 1988, the special counsel filed his reply to Mr. Belue’s objections and his response to the amicus curiae brief. In accordance with the rules governing the Commission on Practice, the matter was deemed submitted to the Supreme Court. The Court has reviewed the briefs and other matters in the file and the extensive transcript and has concluded that oral argument is not required.

The Court has concluded that it is appropriate to impose the discipline upon Mr. Belue as recommended by the Commission on Practice. Because of the extensive arguments on the part of Mr. Belue suggesting his profound disagreement with the conclusions of the Commission on Practice, and because of the contentions on the part of the amicus curiae Crow Indian Tribé, the Court will review a number of the significant findings and conclusions of the Commission.

Mr. Belue has been licensed to practice law in Montana as an attorney and counselor since June 1969. He has engaged in the general practice of law in Hardin, Montana. During his practice he has held the positions of Big Horn County Attorney, City Attorney of Hardin, Deputy County Attorney, United States Magistrate, and Northern Cheyenne Tribal Trial Judge.

The Commission on Practice made Findings of Fact 2 through 19 in connection with Counts I, III, and IV. We will first review these common findings of fact. All three of these Counts arose out of events occurring in the action described as National Farmers Union Insurance Companies (NFU), et al. v. Crow Tribe of Indians, et al., Civil Cause No. CV 82-230-BLG, in the United States District Court for the District of Montana, Billings Division, in which Mr. Belue acted as an attorney on behalf of Leroy Sage, a minor, and Flora Not Afraid, Sage’s guardian. In the course of that proceeding, Mr. Belue filed a motion for disciplinary action against attorneys Ramirez, Harris and Hartman on the grounds they had given Judge Roundface something of value for the purpose of improperly influencing his decision. Mr. Belue requested the District Court to impose sanctions of disbarment, suspension, reprimand, or such other disciplinary action as it deemed proper. The findings point out that depositions were taken and a hearing was held before U.S. District Judge Paul G. Hatfield, who entered a Memorandum and Order which stated in pertinent part:

“When put to the task with regard to the factual support for the accusations he has advanced, however, Mr. Belue has presented nothing more than his inquisitional interpretation of otherwise innocuous events. The evangelical fervor with which Mr. Belue has obviously approached his defense in the principal action obscured his objective judgment with respect to the contempt proceedings against him. Acting solely in retaliation, Mr. Belue assailed the character of these attorneys. This court will not condone this type of behavior by the attorneys appearing before it. I find there is nothing in the record to suggest that Messrs. Hartman, Ramirez, and Harris conducted themselves in anything but an exemplary manner at all pertinent times.
“Our adversary system of jurisprudence inevitably generates those situations which in ordinary parlance may prompt a rash response. That same response by an attorney admitted to the bar of this court in a proceeding before the court can hardly be justified under any circumstances. Regardless of the intensity with which an attorney assumes his adversary posture, he is expected, as a trained professional, to conduct himself in an ethical manner. On the basis of the record before me, I am compelled to conclude that Mr. Belue has not conducted himself in a manner which behooves his status as a member of the bar of this court.”

The findings further point out that Judge Hatfield requested the Commission on Practice to assist him in an advisory capacity. By subsequent orders, Judge Hatfield imposed Rule 11 sanctions upon Mr. Belue for the filing of unfounded ethical charges. Mr. Belue remitted payment of $5,601.97 to the Clerk of the U.S. District Court to cover opposing counsel’s costs and attorneys’ fees in defense of the charges raised by Mr. Belue’s motion.

The Commission on Practice in Finding No. 19 stated the following conclusion:

“Based upon the evidence submitted herein, we agree with Judge Hatfield’s findings regarding Belue’s contempt and the unfounded and frivolous nature of Mr. Belue’s motion against opposing counsel. There is no evidence to show or even reasonably suggest that Hartman, Ramirez, or Harris made any attempt or even considered, either individually, jointly, or in concert with others, bribing Judge Roundface or otherwise offering him something of value in order to improperly influence his decision-making process.”

We conclude there is clear and convincing evidence to support Findings 2 through 19 of the Commission on Practice.

We will now consider the Findings and Conclusions of the Commission on Practice with regard to each of the Counts filed against Mr. Belue before the Commission:

Count I — Filing Frivolous and Unfounded Ethical Violations Claims Against Opposing Counsel. The Commission found that the series of events outlined by Mr. Belue did not constitute a rational basis, objectively or subjectively, for coming to the conclusion that opposing counsel had offered Judge Roundface a bribe or committed any ethical violations. The Commission further found that the evidence was clear and convincing that the charges against opposing counsel were unfounded, and that Mr. Belue’s actions merely served to injure opposing counsel in retaliation for a contempt citation pending against him. Rule 3.1 of the Rules of Professional Conduct provides:

“Meritorious Claims and Contentions. A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous, which includes a good faith argument for an extension, modification, or reversal of existing law.”

The Commission concluded that Mr. Belue’s conduct in relation to Count I violated the provisions of Rule 3.1. We affirm the Findings and Conclusions of the Commission as to Count I.

Count II — Failure to Return Government Property. The Commission concluded there was a failure to prove this Count by clear and convincing evidence. The Commission dismissed Count II. We affirm the dismissal of Count II.

Count III — Disobedience of Judge Baffin’s Order of December 10, 1984. The Commission found that Mr. Belue obtained from the Tribal Court a Writ of Execution against the Lodge Grass Schools which was executed by seizure of various school property including computer systems and computer related equipment. The Commission concluded from the evidence that it was clear Mr. Belue intentionally disregarded Federal District Judge Baffin’s Order to release the property from attachment, and that he sought to evade the Order by obtaining an order from Judge Roundface of the Tribal Court. In its Conclusions the Commission referred to Rule 8.4(d) which provides that it is professional misconduct for a lawyer to “engage in conduct that is prejudicial to the administration of justice.” The Commission also referred to Section 37-61-301(2)(b), MCA, which in substance provides that an attorney may be suspended for violation of an order of the court requiring him to do or forbear an act. The Commission concluded that Mr. Belue’s conduct in this matter violated the Rules of Professional Conduct and statutory prohibitions against disobedience of a court order. We affirm both the Findings and Conclusions of the Commission as to Count III.

Count IV — Attempting to Obstruct Justice by Urging a Witness, Judge Roundface, Not to Testify at his Deposition. The Commission made extensive findings of which the following is pertinent:

“It is clear from the record that Mr. Belue’s intention in making such objections was to prevent counsel for attorneys Harris, Hartman and Ramirez from ascertaining Judge Roundface’s testimony regarding the alleged bribe and, indeed, that Belue did not want the testimony known, because it was contrary to his charges against the opposing counsel. Judge Roundface was not Belue’s client or otherwise related by employment or agency With Belue, and Judge Roundface may have been subject to sanctions by the District Court after Judge Battin had allowed his deposition to go forward for the specific purpose of inquiring into the question of a bribe. As a result, Mr. Belue had no privilege to object or otherwise instruct Judge Roundface not to respond to the questions propounded.”

Commission referred to Rule 3.4 of the Rules of Professional Conduct and its provisions with regard to fairness to opposing party and counsel. The Commission concluded that Mr. Belue’s objections and advice to Judge Roundface as a witness at his deposition were obstructive tactics intended for the purpose of improperly impeding the discovery process and violated the foregoing Rule. The Commission further concluded that Mr. Belue’s conduct in advising Judge Roundface was a blatant attempt to frustrate the administration of justice. The Commission found that the evidence was clear and convincing with respect to Count IV and concluded that such conduct violated Rules 3.4(a), (d), and (f), and Rule 8.4(d) of the Rules of Professional Conduct. We affirm the Findings and Conclusions of the Commission with regard to Count IV.

Count V — Physical Assault on Another. The Commission found that on May 25, 1982, Mr. Belue was prosecuting a DUI charge as City Attorney, and attorney Lance Pedersen was defending the accused in Justice Court for Big Horn County. The Commission set forth in some detail the nature of the assault by Mr. Belue on Mr. Pedersen. The Commission found there was no purpose to be served by Mr. Belue’s actions other than to intimidate or embarrass Mr. Pedersen by physically attacking him, and such action reflected adversely on his fitness as a lawyer. The Commission also found that the actions occurred immediately outside the courtroom in the course and conduct of a trial, before witnesses, jurors, and others.

The Commission concluded that Mr. Belue’s conduct toward attorney Pedersen violated Rules 4.4 and 8.4 of the Rules of Professional Conduct. We affirm the Findings and Conclusions of the Commission with regard to Count V.

Count VI — Outrageous, Undignified, and Discourteous Conduct. The Commission considered evidence with regard to intimidating, threatening, arguing and quarreling with various individuals, publicly and privately, in eight separate incidents involving seven different individuals extending over a period from 1981 to 1985. The Commission found that each of the incidents was an example of unacceptable behavior on the part of an attorney and that Mr. Belue’s behavior did not serve a substantial purpose other than to embarrass, threaten, intimidate, challenge, or otherwise burden the parties involved. Mr. Belue had testified that he realized he had a problem and expressed his apologies. The Commission found that while Mr. Belue had apologized, he did not seem to be aware that there was any admission of guilt warranting discipline. The Commission found that Mr. Belue’s conduct could not be condoned and that zealous representation of various clients’ interests did not justify the manner in which Mr. Belue behaved.

The Commission concluded that there was clear and convincing evidence to show that Mr. Belue’s conduct violated Rules 8.4(d) and 4.4 of the Rules of Professional Conduct. The Commission referred to the official comments under Rule 8.4(d) as follows:

“Offenses involving violence, dishonesty, or breach of trust, or serious interference with the administration of justice are in that category. A pattern of repeated offenses, even ones of minor significance when considered separately, can indicate an indifference to legal obligations.”

The Commission also referred to this Court’s advisory opinion, In Re Advisory Opinion to Commission on Practice (1971), 156 Mont. 514, 495 P.2d 1128, 1129. The Commission concluded that while each of the incidents may not be serious when taken separately, Mr. Belue’s conduct taken as a whole is serious and that it was clear that Mr. Belue had engaged in a pattern of conduct which adversely reflected upon his fitness to practice law. We affirm the Findings and Conclusion on Count VI.

Count VII — Intimidation and Threats to a Public Official. The Commission found that on or about February 23, 1984, Harvey Dalton was a night shift commander with the Big Horn County Sheriff’s office when a complaint was made with regard to wrongful occupation of a house by a client of Mr. Belue. Mr. Dalton called Mr. Belue. Mr. Belue responded to the inquiry by Deputy Dalton in a caustic and argumentative manner, interrupting Dalton’s inquiries, and concluded his conversation by threatening to get a gun and shoot Deputy Dalton if he should go down to the subject property to follow up on the matter. The Commission concluded there was clear and convincing evidence to show that Mr. Belue’s comments, remarks, and threats violated the provisions of Rule 8.4(b) and (d), as well as Rule 4.4 of the Rules of Professional Conduct and that his actions served no purpose other than to unduly burden and harass Deputy Dalton and intimidate him from carrying out his investigation. We affirm the Findings and Conclusion of the Commission on Count VII.

Count VIII — Contacting a Prospective Client for Private Representation on a Matter Investigated by the County Attorney’s Office. The Commission’s decision included the following findings. In 1985 a ten-year-old girl was hurt in a BB gun shooting accident which resulted in an investigation by the Big Horn County Sheriff’s Department. The BB gun involved was taken as evidence by the sheriff’s department. It was Mr. Belue’s duty as County Attorney to decide whether or not to file a criminal prosecution. Mr. Belue was out of town at the time of the shooting incident, but, upon his return, he immediately became interested in the possibilities of a civil suit. He learned that the mother of the injured girl was employed in the county courthouse, and he called the mother and asked her to come and see him. When she advised she was busy and could not come to his private office, Mr. Belue asked her to see him at his office in the county courthouse. Later in the day Mr. Belue again called the mother to advise that he was in his office in the county courthouse and he wanted her to come and see him regarding a personal matter. The mother complied with that request and, at Mr. Belue’s office, was advised by him that he had heard of her daughter’s accident. He then offered to represent her in a lawsuit on the case. Mr. Belue indicated that he could obtain a substantial award. The mother testified that she was shocked by the proposition and advised Mr. Belue that if she needed an attorney she would get one of her own choosing and then left the office. Mr. Belue’s office in fact was involved in the investigation, and it was he who actually made the decision to terminate further criminal investigation.

The Commission found that it was clear that Mr. Belue was soliciting representation of the mother on a matter in which he and his office were directly involved as County Attorney. The Commission concluded there was clear and convincing evidence to show that Mr. Belue attempted to gain employment as an attorney to represent the mother on a private matter while he was directly involved in the same matter as a public officer, the County Attorney of Big Horn County, in violation of Rule 1.11(c) of the Rules of Professional Conduct, which provides:

“Except as law may otherwise expressly permit, a lawyer serving as a public officer or employee shall not:
“(2) negotiate for private employment with any person who is involved as a party or as attorney for a party in a matter in which the lawyer is participating personally and substantially.”

We affirm the Findings and Conclusion of the Commission with regard to Count VIII.

Count IX — Conflict of Interest as Big Horn County Attorney. The Commission found that in 1984 Mr. Belue represented a church in an issue as to its tax exempt status. The church’s tax exempt status was recognized by a district court decision dated February 19, 1985. Subsequent to that decision Mr. Belue wrote the Big Horn County Treasurer and demanded a refund of taxes paid by the church. The treasurer did not believe a refund was appropriate and requested a letter opinion from Mr. Belue as Big Horn County Attorney. In the absence of a response from the County Attorney, the treasurer requested an opinion from the Attorney General’s office. By letter dated August 8, 1985, the Attorney General’s office issued a directive letter advising Mr. Belue that he should immediately remove himself from representation of the County of Big Horn and its officers in connection with this matter. The Attorney General, pointing out the ethical violations involved in such conflicts, directed that Mr. Belue cease representing private clients in actions against the county. At a meeting of the Big Horn County Commissioners in August 1985, Mr. Belue advised the commissioners that he was not going to obey the Attorney General’s letter with regard to his not representing private clients.

The Commission found that involvement by Mr. Belue as County Attorney was inappropriate in light of the Attorney General’s advice and the Rules of Professional Conduct and that the conflict was apparent on its face. The Commission therefore concluded that Mr. Belue’s conduct relative to Count IX violated the Rules of Professional Conduct as they relate to conflicts of interest. The Commission’s conclusions set forth Rule 1.7 of the Rules of Professional Conduct and concluded that Mr. Belue’s demands on behalf of the church were adverse to the county’s interests and that he had no authority or consent from his client, the County Treasurer, to participate in the matter. He also had the express directive from the Attorney General advising him to abstain from involvement. We affirm the Findings and Conclusions of the Commission with regard to Count IX.

Count X — Frivolous Claims. Special counsel moved for dismissal of Count X at the outset of the hearing and the count was dismissed by the Commission. We affirm the dismissal of Count X.

Count XI — Contacting Adverse Party Represented by Counsel. The Commission found that in 1984 Mr. Belue initially represented a husband in a divorce proceeding, having received a $100 retainer fee. Mr. Belue then accepted a $500 retainer fee to represent the wife in the same divorce proceeding. Mr. Belue’s secretary advised the husband that Mr. Belue was representing the wife and no longer represented the husband. By his own testimony Mr. Belue admitted that he had been retained by the husband, but that he later agreed to and did represent the wife. The Commission found that Mr. Belue had a conflict prohibited by the Rules of Professional Conduct. The Commission concluded that Mr. Belue’s representation of the wife after representing the husband violated the provisions of Rule 1.9 which provides as follows:

“A lawyer who has formerly represented a client in a matter shall not thereafter:
“(a) represent another pérson in the same or substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation.”

The Commission further concluded that there was not sufficient evidence to find Mr. Belue to be in violation of Rules 4.2 or 7.3(d) in regard to this matter. We affirm the Findings and Conclusions on the part of the Commission with regard to Count XI.

Count XII — False Testimony and Conduct Prejudicial to the Administration of Justice. The Commission concluded that the allegations were barred by principles of limitations and laches and therefore dismissed Count XII. We affirm the conclusion of dismissal of the Commission with regard to Count XII.

Count XIII — Continued Pattern of Misconduct. The Commission found that the various counts previously discussed represented a continuing pattern of misconduct on the part of Mr. Belue and a repeated and continuous disregard for the law, the Rules of Professional Conduct, and Mr. Belue’s obligations as County Attorney. The Commission concluded that Mr. Belue’s conduct violated Rule 8.4 of the Rules of Professional Conduct which provides:

“It is professional misconduct for a lawyer to:
“(a) violate or attempt to violate the Rules of Professional Conduct
“(b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects;
“(c) engage in conduct involving dishonesty, fraud, deceit, or misrepresentation;
“(d) engage in conduct that is prejudicial to the administration of justice;

We affirm the Findings and Conclusions of the Commission with regard to Count XIII.

Crow Indian Tribe — The Crow Indian Tribe filed an amicus brief in defense of Mr. Belue. The Tribe points out that Mr. Belue has earned the respect and admiration of Crow Indians because of his sensitivity to their concerns and his aggressive advocacy of their rights. The Tribe argues that this Court must keep in mind the alleged racial antagonism toward Indians in a polarized community from which these charges emerged. This leads the amicus to suggest that the charges against Mr. Belue do not justify the discipline recommended by the Commission. These contentions are not of significant help in deciding the issues presented to this Court. We point out that the evidence submitted in this case does not demonstrate the racial prejudice spoken of by the amicus. We also point out that the presence or absence of racial antagonism does not resolve the issues before us. Even if there were proof of racial antagonism in the record before us, this Court still would he required to determine whether or not the conduct of Mr. Belue violated the Rules of Professional Conduct.

We have carefully reviewed the extensive transcript of the hearing before the Commission to determine whether the facts warrant discipline of Mr. Belue. We found nothing to suggest that the findings and conclusions of the Commission were influenced by racial antagonism toward the Indian people. We have concluded there is clear, convincing, and unrebutted evidence to support both the findings and the conclusions of the Commission on Practice.

This Court is pleased to be advised that the Crow Indian Tribe both admires and respects Mr. Belue for his aggressive advocacy on behalf of Indian people. We commend Mr. Belue for his legal advocacy on behalf of the Indian people. However, we observe that this proceeding does not arise from his actions in engaging in such aggressive advocacy for Indian people. The proceeding arises from Mr. Belue’s failure to comply with the rules of conduct which apply to all attorneys.

While Mr. Belue has earned the respect of his clients as an aggressive advocate, he has failed to earn the respect of this Court because of his inability to comply with the Rules of Professional Conduct which apply to him and all other advocates, regardless of the race, color, or creed of their clients. The contentions on the part of the Crow Indian Tribe and of Mr. Belue only distract from the critical issues framed by the complaint against Mr. Belue and the factual determinations and conclusions by the Commission. This Court has unanimously concluded that the Commission on Practice is correct in its analysis of the improper and unethical conduct on the part of Mr. Belue.

In his rebuttal brief Mr. Belue argues that the charges against him arose out of a “vigilante” committee. He argues that the violations arose from his abrasive personality and that there is no personality requirement in the standards for lawyer conduct. Unfortunately Mr. Belue has failed to absorb the significance of the serious charges against him as well as the significance of the conclusions of the Commission. The Commission consists of both lawyers and non-lawyers who unanimously concluded that Mr. Belue’s conduct was grossly improper and required both public censure and three months suspension from practice. The Court emphasizes to Mr. Belue that many lawyers in Montana aggressively represent Indians and other minority groups without violating the Rules of Professional Conduct. Mr. Belue’s representation of Indian clients is not a justification for his improper conduct.

The Supreme Court of the State of Montana unanimously concludes as follows:

1. That Mr. Belue shall he suspended from the practice of law for a period of three months.

2. That Mr. Belue shall be publicly censured before this Court.

3. That Mr. Belue shall pay all costs of the proceedings before the Commission on Practice as a condition precedent to his reinstatement to the practice of law.

IN ORDER TO CARRY OUT THE FOREGOING, THE COURT ORDERS:

1. That Mr. Belue shall appear before this Court in Helena, Montana, for the administration of his public censure on Wednesday, September 7, 1988, at 9:00 a.m.

2. That Mr. Belue’s suspension from the practice of law as an attorney and counselor in the State of Montana, including all tribunals and other bodies of the State, shall commence on September 7, 1988, and shall continue through December 7, 1988.

3. That Mr. Belue is given the period of time from the date of this order to the date of public censure and suspension in which to adequately prepare his practice and his clients for his suspension from practice, pursuant to Rule 21, Supreme Court of the State of Montana, Rules for Lawyer Disciplinary Enforcement.

4. That Mr. Belue is specifically advised that he is hereby prohibited from practicing as an attorney and counselor at law in any manner in the State of Montana during the above described period from September 7, 1988, to December 7, 1988.

5. The Secretary of the Commission on Practice shall furnish this Court and Mr. Belue an appropriate statement of Commission costs.

6. When Mr. Belue has completed the period of suspension from practice on December 7, 1988, he shall file with this Court proof of payment of all costs of the proceeding before the Commission on Practice, and also an affidavit alleging that he has fully complied with all of the requirements-of the suspension order, and shall also serve the same upon the secretary of the Commission on Practice, in accordance with Rule 20, Rules for Lawyer Disciplinary Enforcement. In order that there may be no misunderstanding, Mr. Belue shall personally deliver copies of such papers to the Chief Justice or Acting Chief Justice of this Court prior to any resuming of practice.

7. Copies of this opinion and order shall be mailed to Mr. Belue, Gregory O. Morgan, Robert C. Smith as special prosecutor, the chairman of the Commission on Practice, George Bousilman, Executive Director of the State Bar of Montana, Charles Cervantes, Counsel for the Crow Tribe, to each of the District Judges of the State of Montana, and to each of the United States District Judges for the District of Montana.

DATED this 21st day of June, 1988.

s/J.A. Turnage, Chief Justice

s/John Conway Harrison, Justice

s/John C. Sheehy, Justice

s/Fred J. Weber, Justice

s/William E. Hunt, Sr., Justice

s/L.C. Gulbrandson, Justice

s/R.C. McDonough, Justice


author: MR. JUSTICE WEBER

text:
    OTTO STENSVAD, Plaintiff and Respondent, v. EDWARD TOWE and Thomas E. Towe, Defendants and Appellants.
    No. 87-72.
    Submitted May 5, 1988.
    Decided June 21, 1988.
    Rehearing Denied Aug. 11, 1988.
    759 P.2d 138.

      Towe, Ball, Enright & Mackey, Thomas E. Towe argued, Billings, for defendants and appellants.
    Wright, Tolliver & Guthals, Kenneth D. Tolliver argued, Billings for plaintiff and respondent.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

The defendants (Towes) appeal a $116,337.10 judgment entered on a jury verdict against them, in the District Court for the Fourteenth Judicial District, Musselshell County. The action is based on the Towes’ attachment of Mr. Stensvad’s assets from 1972 through 1979. We affirm, except for two modifications to the damages awarded.

The Towes raised fifteen issues on appeal. We restate them as follows:

1. Did the court’s decision to dismiss the Bank as a defendant automatically eliminate the Towes’ liability?

2. Was there error in the instructions on, award of, or amount of punitive damages?

3. Is there reversible error in instruction No. 9, which did not require proof of want of probable cause and malice and which stated that the jury “must” award damages which would compensate Mr. Stensvad “fully”?

4. Should the claim under 42 U.S.C. Section 1983 have been dismissed, and does the evidence support the verdict on this claim?

5. Does the evidence support the award of damages for emotional or mental distress?

6. Does the evidence support the interest awarded on attorney fees?

7. Does the evidence support the award of $5,000 for loss of income?

8. Does the evidence support the award of damages in spite of Mr. Stensvad’s failure to mitigate by posting an attachment bond or by seeking to have the attachment released?

9. Was it proper to admit evidence of Edward Towe’s statements and opposition to the bank charter?

10. Did the trial court err in allocating the damages between the defendants?

In 1971, Edward Towe was a shareholder of the Miners and Merchants Bank of Roundup (Bank). Both he and his son, Thomas Towe, were officers at the Bank. Otto Stensvad was a supporter of formation of a new bank in Roundup. He also had guarantied his son’s loans from the Bank for operation of a feedlot and grain elevator. Mr. Stensvad brought a court action seeking exoneration from his guaranties at the Bank. The Bank counterclaimed, alleging nonpayment of the guarantied notes. It then requested an injunction to prevent Mr. Stensvad from transferring his property before the litigation was resolved. The request for an injunction was denied.

Then, in January 1972, Thomas Towe, as attorney for the Bank, obtained an ex parte prejudgment attachment of Mr. Stensvad’s property, pursuant to Sections 93-4301 to -4347, RCM (1947). Edward Towe acted as surety for the attachment. The property attached included real property, corporate stock, bonds, and oil and gas interests. The attachment was dissolved by judicial order in 1979. Stensvad v. Miners & Merchants Bank (1979), 183 Mont. 160, 598 P.2d 1083.

In 1980, Mr. Stensvad brought this suit for damages resulting from the attachment of his assets. The Bank, originally named as a defendant, was dismissed by the court before trial. Mr. Stensvad argued at trial that the Towes should have known from the beginning that this attachment was wrongful. On that issue, both sides presented extensive expert testimony by lawyers. The jury returned a verdict for Mr. Stensvad. It awarded him $5,000 for loss of income from his assets; $16,115 for attorney fees plus interest; $5,000 for mental anguish; $75,000 in punitive damages; $10 for violation of his constitutional rights under 42 U.S.C. Section 1983; and $10 in punitive damages for violation of his constitutional rights under 42 U.S.C. Section 1983. The Towes appeal.

I

Did the court’s decision to dismiss the Bank as a defendant automatically eliminate the Towes’ liability?

In dismissing the Bank, the District Court relied upon an order in a related proceeding. That order described the dismissal of the Bank as a substitution of the real parties in interest. The order described the arrangements by which the Towes had sold the bank in the mid-1970’s and the “ongoing adversarial relationship” between the Towes and the Bank’s buyers. The order also described the Towes’ continued control over this litigation.

The Towes contend that the claims against them are based on master-servant law and that the court’s voluntary dismissal of the Bank requires that they, as the Bank’s servants, also be dismissed. The facts as set out in the order described above fly in the face of this contention. We conclude that the dismissal of the Bank constituted a substitution of parties, rather than the dismissal of a principal and retention in the suit of agents. We hold that the dismissal of the Bank did not automatically dismiss the Towes from this action.

II

Was there error in the instructions on, award of, or amount of punitive damages?

The Towes argue that when read together, jury instructions No. 9 and No. 18 essentially require that punitive damages must be awarded to Mr. Stensvad. Instruction No. 9 stated:

“You are instructed that the attachment of Otto Stensvad’s assets by the Defendants in this case was wrongful and that you must award Otto Stensvad a sum of money to compensate him fully for all damage proximately caused him by the wrongful attachment, if any.”

Instruction No. 18 stated, in relevant part:

“Plaintiff OTTO STENSVAD has asked for punitive or exemplary damages which may be allowed by you provided you first find that the Plaintiff OTTO STENSVAD has suffered actual damage. One who has suffered injury to his person or property through the oppression, fraud, or malice of another, may recover in addition to his actual damages, damages for the sake of example and by way of punishing such other party.
“When I use the expression ‘malice’ I mean a course of action that imports a wish to vex, annoy or injure another person, or an intent to do a wrongful act; such malice may be either actual or presumed from all the material facts.”

The Towes argue that after receiving these two instructions, all that remained for the jury was to determine whether the Towes acted intentionally in attaching Mr. Stensvad’s property. The Towes do not dispute that they intentionally attached the property. They did argue at trial that they were not intentionally doing a wrongful act, or acting out of oppression or malice. Mr. Stensvad did not contend that the Towes acted fraudulently.

After carefully considering the instructions, we conclude that the jury was not required to find that the Towes intentionally did a wrongful act. If the jury had found that the Towes did not act with oppression, fraud, or malice, it would not have been required to award punitive damages. If the jury had found that the Towes were not intentionally taking action which they knew or should have known was wrongful, no punitive damages would be awarded.

The Towes next argue that the evidence is insufficient to support a verdict that they are guilty of the malice necessary for the award of punitive damages. However, Mr. Stensvad submitted evidence that the Towes must have been aware from the time of the attachment that it was probably wrongful and that they perfected and maintained the attachment anyway. We conclude that substantial evidence in the record supports the jury’s finding that the Towes acted with oppression or malice, justifying the award of punitive damages.

The Towes’ final argument on punitive damages is that the amount of punitive damages awarded, $75,000, justifies a presumption of passion or prejudice on the part of the jury. The jury was instructed that:

“If you find that exemplary damages should be allowed, then in determining the amount, you should consider all of the attendant circumstances, including the nature, extent and enormity of the wrong, the intent of the party committing it, the amount, if any, allowed as actual damages, and, generally, all the circumstances attending the particular act involved, including any mitigating circumstances which may operate to reduce without wholly defeating exemplary damages.”

This instruction correctly sets forth factors to be considered in setting an amount of punitive damages. See, e.g., Safeco Ins. Co. v. Ellinghouse (Mont. 1986), [223 Mont. 239,] 725 P.2d 217, 227, 43 St.Rep. 1689, 1701. The jury was presented with evidence that the Towes maintained the attachment on Mr. Stensvad’s property for some eight years, in the face of its obvious wrongfulness. The $75,000 in punitive damages does not appear to us to have resulted from passion or prejudice on the part of the jury. We therefore must affirm the jury’s verdict in this regard. Safeco, 725 P.2d at 227.

Ill

Is there reversible error in instruction No. 9, which did not require proof of want of probable cause and malice and which stated that the jury “must” award damages which would compensate Mr. Stensvad “fully”?

The Towes cite Montgomery v. Hunt (Mont. 1987), [227 Mont. 279,] 738 P.2d 887, 44 St.Rep. 1081, as authority that both want of probable cause and malice must be present in a tortious wrongful attachment. They say that the court’s pretrial “ruling” that these elements need not be proven is reversible error. In reviewing the record, we note that the court did not make a final ruling on this issue prior to trial. It stated only that its inclination at that time was not to require proof of these elements. It clearly reserved final judgment until after hearing the evidence. Instruction No. 9 did not require proof of probable cause or malice.

The Towes also argue on appeal that the giving of instruction No. 9 is reversible error because the instruction stated that the jury “must” award Mr. Stensvad damages to compensate him “fully” for damages proximately caused by the Towes’ wrongful attachment. They argue that the use of these words was improper.

At the time of settling jury instructions, the only objection by the Towes’ attorney to instruction No. 9 was that the words “if any” should be added to allow for nominal damages. The court and counsel for Mr. Stensvad agreed to this amendment and the words were added at the end of the instruction. The Towes’ counsel then withdrew his objection to the instruction.

On appeal, we will not consider objections which were not raised at the trial court level. Thiel v. Johnson (Mont. 1985), [219 Mont. 271,] 711 P.2d 829, 832, 42 St.Rep. 2010, 2013. None of the objections now raised by the Towes to instruction No. 9 were raised at trial. We therefore hold that the giving of instruction No. 9 did not constitute reversible error.

IV

Should the claim under 42 U.S.C. Section 1983 have been dismissed, and does the evidence support the verdict on this claim?

Title 42 U.S.C. Section 1983 provides a remedy for deprivations of rights secured by the Constitution and laws of the United States by any person acting “under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory . . . .” The Towes assert that an action which alleges misuse or abuse of a state statute by a private individual is not actionable under 42 U.S.C. Section 1983.

A Section 1983 action may be brought by a plaintiff debtor against a defendant creditor who has wrongfully obtained prejudgment attachment of plaintiffs assets under a defective state prejudgment attachment statute. Lugar v. Edmondson Oil Co. (1982), 457 U.S. 922, 73 L.Ed.2d 482, 102 S.Ct. 2744. The creditor in that case argued that his actions did not constitute state action, and that the complaint therefore did not state a claim upon which relief could be granted. The Court described the necessary inquiry as 1) whether the deprivation results from exercise of a right or privilege having its source in state authority; and 2) whether the creditor, as a private party, could be appropriately characterized as a “state actor.” Lugar, 457 U.S. at 937, 102 S.Ct. at 2754. The Court held that:

“[w]hile private misuse of a state statute does not describe conduct that can be attributed to the State, the procedural scheme created by the statute obviously is the product of state action. This is subject to constitutional restraints and properly may be addressed in a Section 1983 action, if the second element of the state-action requirement is met as well.”

Lugar, 457 U.S. at 941, 102 S.Ct. at 2756. The second element was met because “the State has created a system whereby state officials will attach property on the ex parte application of one party to a private dispute.” Lugar, 457 U.S. at 942, 102 S.Ct. at 2756.

In the present case, the procedural scheme under which the Towes attached Mr. Stensvad’s property was created by Sections 93-4301 to -4347, RCM (1947). Like the statutory scheme in Lugar, the Montana scheme provided for attachment on the ex parte application of the creditor. That scheme has since been invalidated. See Williams v. Matovich (1977), 172 Mont. 109, 560 P.2d 1338. We conclude, based on Lugar, that the Section 1983 claim was proper.

The Towes also claim that there is no evidence to disprove their good faith reliance on an existing state statute, which they argue is a valid defense to the Section 1983 claim. The good faith defense is an issue of fact. It was presented to the jury in instruction No. 28. Again, expert testimony of lawyers was presented by both sides on whether invalidation of the attachment was foreseeable. The attachment was maintained until 1979, and Mr. Stensvad presented expert testimony that Tom Towe should have known, as a lawyer, that the attachment was invalid. The jury, after considering the evidence presented, found that the Towes violated Mr. Stensvad’s constitutional rights. We conclude that there is sufficient evidence to support the jury’s verdict on the Section 1983 claim.

V

Does the evidence support the award of damages for emotional or mental distress?

The jury awarded Mr. Stensvad $5,000 for mental anguish. As stated in instruction No. 16, damages for mental anguish or distress, absent physical injury, are recoverable only if defendants’ conduct resulted in a substantial invasion of a legally protected interest which caused a significant impact upon the person of the plaintiff. See Johnson v. Supersave Markets, Inc. (Mont. 1984), [211 Mont. 465,] 686 P.2d 209, 213, 41 St.Rep. 1495, 1500.

Mr. Stensvad was unable to testify at trial due to ill health which is not related to this action. His wife testified that, as a result of the Towes’ attachment of his property, her husband did not sleep many nights and would wake her up crying. She also testified that because of his embarrassment about the financial situation in which he was placed after the assets were seized, he quit going to Rotary Club, to Hospital Board meetings, and to the city of Melstone. Mr. Stensvad’s son also testified that his father was very upset by his inability to pay his bills after the attachment and that he avoided people because of his embarrassment. We hold that the testimony of the Stensvads was a sufficient basis for the jury’s award of $5,000 in damages for mental distress.

VI

Does the evidence support the interest awarded on attorney fees?

The stipulation on attorney fees read “It is stipulated for purposes of this action that Otto Stensvad expended the sum of $8,094.00 in legal fees in order to obtain the dissolution of the attachment to which reference is made in this action.” That sum represents the attorney fees incurred in the action decided by this Court in 1979. The stipulation makes no mention of interest.

The sum awarded by the jury for attorney fees included $8,021 in prejudgment interest. However, the stipulation signed by the attorneys did not establish that the attorney fees were payable by the Towes. Only when the jury determined that Mr. Stensvad was entitled to damages did the liability for those damages become fixed. Therefore, we hold that no prejudgment interest may properly be awarded on the attorney fees. Since we conclude that an award of interest on the attorney fees is not appropriate, the issue of whether the rate of interest was excessive is rendered moot.

VII

Does the evidence support the award of $5,000 for loss of income?

Mr. Stensvad argues that this award is supported by the evidence submitted by his accountant that he lost $4,309.21 because he was unable to invest income from oil royalties and bonds which the Towes had attached. He also presented evidence that he had to borrow money to live on at 7.5% to 8.5% during the period of the attachment. Where there is substantial credible evidence to support the jury’s verdict on damages, it will be upheld. Maykuth v. Eaton (Mont. 1984), [212 Mont. 270,] 687 P.2d 726, 727, 41 St.Rep. 1800, 1802. We conclude that the jury’s award of these damages is supported in the record.

VIII

Does the evidence support the award of damages in spite of Mr. Stensvad’s failure to mitigate by posting an attachment bond or seeking to have the attachment released?

By this argument, the Towes attempt to shift the burden for their wrongful attachment to Mr. Stensvad. The Towes’ attorney argued at trial that an intervening cause of Mr. Stensvad’s damages was his failure to act to have the attachment dissolved. Mr. Stensvad presented expert testimony that he did not have the obligation to do more than he did. The jury was instructed to award Mr. Stensvad those damages “proximately caused” by the wrongful attachment. It was also instructed on Mr. Stensvad’s duty to mitigate damages. The jury, in its verdict, found that the damages were caused by the Towes’ actions. We hold that there is substantial evidence to support the jury’s verdict.

IX

Was it proper to admit evidence of Edward Towe’s statements and opposition to the bank charter?

The testimony to which this objection is made came from Mr. Brower and Mr. Bianchi, participants in the process of seeking to open a new bank in Roundup. They testified that the Towe family gave considerable opposition to the new bank. The Towes argue that this testimony was irrelevant and prejudicial. The District Court overruled that objection at trial.

Mr. Stensvad argues on appeal that this evidence is relevant to the state of mind of Edward Towe toward Mr. Stensvad during the formation of the competing bank in Roundup. Proof of state of mind was required in this case to show the oppression, fraud, or malice required for punitive damages. We agree with the ruling of the District Court. The evidence of Edward Towe’s statements and opposition to the bank charter were relevant, as defined under Rule 401, M.R. Evid. We hold that admission of this evidence is not reversible

error.

X

Did the trial court err in allocating the damages between the defendants?

The jury, in its special verdict, made note of its allocation of each item of damages between the defendants. The jury had been instructed, at instruction No. 22, that:

“If you find one or more of the defendants to be liable, and after careful consideration of the evidence you are unable to determine the separate amount of damage each defendant caused, then you shall not divide the plaintiffs’ total damages between them, but your verdict shall be for the total damages against the one or more defendants whom you find to be liable.”

In its answers to special interrogatories, the jury split the $5,000 awarded for loss of income 50-50 between Edward and Tom Towe, as it did the $5,000 in damages for mental anguish, the $75,000 in punitive damages, the $10 for constitutional violations, and the $10 in punitive damages for constitutional violations. The jury split the $16,115 award of attorney fees 70% to Tom Towe and 30% to Edward Towe. The general verdict form did not require the jury to split damages; but simply to list the total amount of damages awarded under each theory.

Contrary to the jury’s allocation of damages in the special interrogatories, the court, in its judgment, awarded all damages against both defendants jointly and severally. We see no reason for disturbing the allocation made by the jury. A jury is clearly permitted to apportion punitive damages between two defendants. See Edquest v. Tripp & Dragstedt Co. (1933), 93 Mont. 446, 457, 19 P.2d 637, 640. Under the instructions given, all damages were apportionable. We order that the jury’s apportionment be reinstated.

We remand this cause to the District Court for entry of an order deleting the interest on attorney fees as discussed under Issue VI of this opinion and reinstating the jury’s apportionment of damages as discussed under Issue X of this opinion. With these exceptions, the judgment of the District Court is affirmed. In the exercise of our discretion under 42 U.S.C. Section 1983, we order that the parties shall pay their own attorney fees on appeal.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, SHEEHY, GULBRANDSON, HUNT and McDONOUGH concur.