No.
96-357
IN THE SUPREME COURT OF THE STATE OF MONTANA
1997
JOSEPH C. ENGEL,
Plaintiff,
Respondent,
Counterclaim
Defendant,
and Cross-Appellant,
v.
DARLENE WAGNER, a/k/a
DARLENE FRANSSON,
Defendant,
Counterclaimant,
and Appellant.
APPEAL FROM:
District
Court of the Eleventh
Judicial
District,
In and for the County of Flathead,
The Honorable
C. B. McNeil,
Judge presiding.
COUNSEL OF RECORD:
For
Appellant:
Anne Biby and Sean Hinchey;
Bottomly
Law Offices;
Kalispell,
For
Montana
Respondent:
James C. Bartlett;
Hash, O'Brien
& Bartlett;
Kalispell,
Montana
Submitted
on Briefs:
Decided:
Filed:
January
March
16,
25,
1997
1997
Justice
Terry
N. Trieweiler
Pursuant
to
1995 Internal
cited
result
to
I,
Paragraph
3(c),
Rules,
Operating
with
the
the
Section
as precedent
document
delivered
and shall
the
Clerk
State
of
Reporter
the
Court.
Supreme
decision
shall
by its
Supreme
Court
Publishing
of
Montana
following
be published
the
opinion
filing
Court
not
as a public
and by a report
Company
and
be
West
of
its
Publishing
Company.
Joseph
in
the
C. Engel
District
Flathead
Darlene
any
of
against
of
fiduciary
to
trial,
District
Court
attorney-client
his
the
District
Court
fiduciary
Court
awarded
Wagner
Wagner
appeals
and Engel
We affirm
District
Court
ruled
in
for
as
ruled
After
damages
cross-appeals
part,
further
Wagner
raises
of
a matter
reverse
had breached
Engel's
breach
proceedings
the
2
following
law,
it
trial,
in
judgment.
there
dismissed
counterclaims.
Engel
the
and
granted
summary
a non-jury
for
alleged
Court
Accordingly,
that
to
lawsuit
and
judgment
part,
and
consistent
opinion.
On appeal,
entitled
malpractice,
partial
that,
he was
a prior
District
misrepresentation
duties.
Court.
for
relationship.
and
during
in
that
was not
duties,
of
malpractice
District
counterclaimed
the
the
Wagner
Wagner
cross-motions
Wagner's
judgment
to decide
he obtained
parties'
no
Judicial
Court
and that
the
was
and
District
Prior
Engel,
Wagner,
Eleventh
breach
For
a declaratory
Homes.
Log
contract,
of
the
for
proceeds
misrepresentation.
several
the
attorney,
settlement
Glacier
breach
for
He asked
Wagner's
the
a complaint
Court
County.
not
filed
issues:
For
a contract
the
District
of
of
contract.
the
District
remand
to
with
the
this
1.
Did
judgment
the
District
Court
to Engel regarding
2.
Did
the
3.
Did
attorney
recovery
from Glacier
Did
sanctions
the
District
Court
discovery
conversations
On cross-appeal,
Did
the
relationship
to
award
duties?
when it
from
issue?
declined
held
that
Wagner's
err
when
it
Engel
is
of
the
share
held
abuses in a prior
Court
1.
summary
Log Homes?
Did the District
breached
err
entirely
tape-recorded
granted
when it
and costs
Log Homes belong
5.
it
of fiduciary
Court
fees
awarded for
Glacier
err
breach
the District
to
4.
Court
Engel's
entitled
when
the attorney-client
District
Wagner damages for
err
to Engel,
err
Engel raises
lawsuit
excluded
District
of
the parties?
issues:
err
Court
against
evidence
the following
District
the
the attorney?
when it
between
that
held
Court
when it
that
Engel
awarded
Wagner
a contract?
Did
2.
prejudgment
the
Wagner's
when
it
interest?
Did the District
3.
err
claim
of champerty
Court
err
is void because against
when it
declined
public
policy
to hold
that
on the grounds
and maintenance?
FACTUAL BACKGROUND
Darlene
Wagner and William
joint
business
time
in
the
promotion
Inc.
agreed
enterprises
1980s.
in the Flathead
One of
their
joint
and sale of log homes manufactured
Shrewsbury
that
Shrewsbury
Valley
for
ventures
a period
involved
of
the
by Glacier
Log Homes,
the owner of Glacier
and Buck Foster,
Shrewsbury
were engaged in various
Log Homes,
would receive
3
a ten percent
commission
for
the
log
homes which
Wagner's
contributions,
rights
to
to
collect
the
falling
of
through
his
efforts.
assigned
As a result
in writing,
the
with
commissions.
Glacier
to her,
of
Log Homes and Shrewsbury
the
between
arose
the
sold
Shrewsbury
one-half
A dispute
regard
were
commissions.
After
commissions
they
initiated
When Wagner
learned
that
a
Shrewsbury
time,
because
his
original
In January,
met
with
and
fee
contingency
party
to
standing
to
to
adequately
agreement
agreement.
2,
which
against
to
Glacier
and Wagner,
after
Engel
one-third
contingency
fee)
and
states,
in
After
incurred
witness
relevant
attorney
(such
fees),
part,
from
to
She
the
case.
into
a signatory
formally
that
her
did
documented
expenses,
necessary
4
to
made a
not
rights
have
were
of
be split
out
The
his
entered
the
equally
attorney
contract
into
attorney
deposition
expenses
an
underlying
between
fees
expressly
as follows:
fees,
as travel
documented
a
Shrewsbury.
and Wagner
takes
costs.
At
Engel.
entered
she
proceeds
Log Homes are
Shrewsbury
that
but
Engel,
the
Homes.
attorney,
about
was not
her
assignment
that
provides
new
Joseph
and was not
lawsuit,
Shrewsbury,
a
they
Wagner
advised
the
by the
1991,
and
agreement
Engel
a party
locate
information
Shrewsbury
retainer
protected
On July
lawsuit
retainer
Log
Shrewsbury.
attorney
with
had a
problems.
Wagner contacted
lawsuit.
be
to
had health
him
Glacier
she contacted
Wagner
contacted
fee
the
asked
and Shrewsbury
against
lawsuit,
provided
Engel
contingency
the
Wagner
lawsuit
attorney
1990,
him
Ultimately,
the
of
them,
attempted
out.
Shrewsbury
owed to
unsuccessfully
expenses
costs
and
for William
(a
and Darlene
Wagner,
the
balance
of
the
Shrewsbury
At the
recovery
in whatever
form shall
be split
in half.
time Mr. Engel receives
his fees and expenses,
he shall
have authority
to pay Darlene Wagner directly
her portion
(50%) and William
Shrewsbury
his portion
(50%).
Darlene
Wagner will
be paid directly
by Joseph Engel
from the
recovery
without
the recovery
first
going
to William
Shrewsbury
for distribution.
The contract
also
from
$1,500,
Glacier
to
Log
trial,
Homes
that
testify.
in
the
to
date,
settlement
at
order
to
an additional
repay
the
her
for
a
Shrewsbury
of
paid
all
of
discovery
1992.
from
abuses.
However,
shortly
to
travel
to
Montana
to
settled
the
case.
The
$1,300
in
Homes
cash;
also
and
(2)
to
Engel
paid
a log
the
sanctions.
Engel
Shrewsbury's
Shrewsbury
sanctions
Engel
1992,
Glacier
for
for
on May 4,
(1)
settlement,
$8,700
refused
included:
awarded
recovered
of
commence
$27,247.
previously
After
amount
on May 1,
package
valued
Engel
to receive
successfully
Shrewsbury
Therefore,
amount
is
in
share,
Engel
was scheduled
home
Wagner
debt.
Prior
before
that
Shrewsbury's
preexisting
Trial
specifies
received
interest
$5,000.
Wagner
an
in
did
assignment
the
not
case.
receive
from
In return,
any
of
the
and demanded
her
proceeds.
Wagner
share
of
the
negotiate
subsequently
proceeds.
to
any
that
of
judgment
in
settlement
which
his
settlement
Wagner
As a result,
Wagner was not
the
of the
However,
a resolution.
a declaratory
decide
learned
he
client
proceeds.
5
and
Engel
Engel
asked
filed
the
and that
Wagner
were
unable
a complaint
District
she was not
counterclaimed
Court
to
for
to
entitled
and
alleged
breach
malpractice,
parties
District
filed
Court
attorney-client
also
judgment
Wagner's
and breach
of
After
fiduciary
for
duties,
by
duties.
it
is
the
plus
$1,300
as
sum of
cash
that
because
attorney
fees,
the
Court
to
judgment.
there
was
District
Court
her
granted
breach
summary
of
contract
counterclaims.
the
of
District
Court
contract,
but
When the
District
that
the
[the
.'I
log
$8,700
sanctions
it
should
not
be
included
for
the
Court
form
Glacier
at
the
District
Court
made the
$27,247
the
designated
settlement
following
findings:
12.
That pursuant
to [Engel's]
contingent
fee agreement
with Shrewsbury,
[Engell
is entitled
to one-third
of the
amount of Shrewsbury's
recovery
[$28,547.00]
which is the
$9,515.00
and costs
sum of
advanced
in
the
sum of
$1,000.00.
13.
That pursuant
to the July 2, 1991 agreement
between
[Wagner] and Shrewsbury,
[Engel]
is entitled
to
[Engel],
first
deduct
his
attorney
fee
and
costs
owed
by
Shrewsbury
in the total
amount of $10,515.00
from the
total
recovery
of $28,547.00
for Shrewsbury
from Glacier
Log Homes, resulting
in net proceeds
of $18,032.00
to be
divided
and paid according
to the July 2, 1991 agreement.
6
Log
specifically
had been
in
his
calculated
home valued
award
Wagner
in whatever
in
The District
the
damages
Court
"recovery
attorney
$28,547.00
no
awarded
amount.
As a result,
no
misrepresentation
and
regard
Shrewsbury's
payment]
law
basis,
District
with
determined
[Engell
Home case
the
breach
fiduciary
obtained
the
summary
of
malpractice
trial,
Engel's
partial
a matter
On that
duties
a nonjury
damages,
as
behalf
fiduciary
Wagner's
found
of
for
as
Furthermore,
on Wagner's
of
that
relationship.
counterclaims.
damages
breach
cross-motions
held
dismissed
breach
contract,
and misrepresentation.
Both
The
of
14.
is entitled
to 50% of said
sum, or
That
[Wagner]
$9,016.00,
plus the sum of $1,500.00
as provided
in said
agreement,
for a total
of $10,516.00
which
should
have
been paid by [Engel]
to [Wagner] within
a reasonable
time
after
the settlement
of the Glacier
Log Homes lawsuit
May 1, 1992.
Wagner
District
appeals
and
Engel
cross-appeals
the
judgment
of
the
by
56(c),
Court.
STANDARDS OF REVIEW
Rulings
on
M.R.Civ.P.,
summary
which
judgment
provides,
in
are
governed
relevant
Rule
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
purpose
of
economy
through
the
summary
judgment
is
controversy
it
is
896,
is
to
D'Ayostino
well
facts
which
encourage
trial
judicial
trial;
however,
a genuine
if
(1980),
the
190,
offered
the
moving
as a matter
absence
(lPPO),
the
that
Interstate
of
of
factual
189 Mont.
genuine
284,
288,
prove
All
proof
must
reasonable
be resolved
7
must
that
To do this,
it
factual
issues.
442,
party
784
must
factual
Bank of Missoula
191.
law.
435,
nonmoving
a
party
any genuine
240 Mont.
motion,
demonstrate
O'Bagy v. First
the
that
a judgment
Swanson
To defeat
from
for
Reaves v. Reinbold
show a complete
v.
785 P.2d
to
any unnecessary
a substitute
established
to
924.
46,
not
of
is
898
entitled
required
judgment
elimination
exists.
615 P.2d
It
summary
(1990),
inferences
in
issue
favor
that
of
P.2d
set
is
919,
forth
exists.
241 Mont.
44,
may be drawn
the
nonmoving
D'Agostino,
party.
if
Additionally,
240
there
summary
judgment
(1989),
238 Mont.
to
review
the
is
Union
Coal
When we review
standard
of
Dairies
v.
review
is
whether
(1995),
Knight
Did
Engel
the
District
regarding
the
The District
was never
basis,
the
the
judgment
Court
when it
first
a
fact
320,
granted
exists
basis.
as
at
680,
fact,
the
erroneous.
904,
summary
906.
judgment
of
in
law,
motion
that
the
summary
that
of
delineates
On that
for
summary
issue.
there
therefore,
"[Engel]
time."
relationship
for
to
issue?
Engel's
a question
8
898 P.2d
888 P.2d
any point
proposition,
then
v.
clearly
a matter
on appeal
motion
She
County
of
relationship
that,
is
469,
granted
attorney-client
Engel's
as a general
324,
of
1
granted
and
standard
Carbon
459,
not
When we
the
are
that,
contends
relationship
case-by-case
the
law,
findings
when it
[Wagner]
Court
however,
asserts,
client
for
to
material
erred
ruled
attorney
pertaining
of
err
necessary
is
findings
attorney-client
District
Wagner,
issues
Court
were
review.
court's
ISSUE
Clark
it
correct.
271 Mont.
269 Mont.
v.
the
which
of
of
are
those
924.
of
Whitehawk
standards
a district
at
propriety
issues
conclusions
(1995),
the
Therefore,
conclusions
Co.
P.2d
486-87.
involves
applicable
those
484,
rulings.
court's
whether
Reserve
686.
776 P.2d
judgment
a district
review
be denied.
should
appeal
other
784
regarding
18,
this
delineate
442,
it
14,
by summary
at
any doubt
motion,
Additionally,
resolved
is
Mont.
are
genuine
District
Court
judgment.
Wagner
whether
fact
to
the
an attorneybe decided
following
on
six
factors
which
she maintains
determination
as to whether
(1) the consulting
(2) the fact
existence
party
of
to the attorney;
relationship
the
in a particular
six-factor
provides
effective
After
test
aforementioned
erred
of
is
of confidential
reasonable
of the
belief
of
the
that
fact
when it
granted
Court's
misrepresentation,
we conclude
with
regard
relationship
dismissal
and punitive
to
on Engel's
that
it
there
each
are
of
the
the District
behalf
with
issue.
as a result
of
that
we hold that
summary judgment
that
we conclude
while
case.
Accordingly,
we conclude
depend on
Furthermore,
case.
record,
factors.
necessarily
exhaustive,
in this
to the attorney-client
District
by the
Whether an attorney-client
that
not
material
six
Furthermore,
(3) the
the existence
case will
of
guidance
a review
issues
or services;
(4) payment
who asserts
party's
exists:
advice;
or disbursal
assertions.
and circumstances
Wagner's
legal
parties;
(5) the receipt
Wagner's
exists
facts
gives
advice
a
by the attorney.
We agree with
regard
between
and (6) the consulting
she was represented
Court
actually
when making
relationship
to seek legal
to or from the person
relationship;
genuine
intent
the attorney
a contract
be considered
an attorney-client
party's
that
information
the
should
of our holding
Wagner's
damages counterclaims
the
malpractice,
must also
be
reversed.
ISSUE 2
Did the District
damages for
Engel's
Court
breach
err
when it
of fiduciary
9
declined
duties?
to award Wagner
Prior
to trial,
Wagner's
behalf
fiduciary
the
the District
with
duties
District
regard
to her
but
granted
breach
of
After
counterclaims.
Court
contract,
Court
awarded
summary
a non-jury
her
for
her
dismissed
damages
breach
of
on
and breach
contract
judgment
of
trial,
however,
Engel's
breach
fiduciary
of
duties
counterclaim.
Wagner
On appeal,
it
dismissed
Engel's
the
her
breach
summary
Court
judgment
had,
in
fact,
Court's
law
Wagner
breach,
she
well
of
had
there
liability
causing
446
52,
At
prove
District
Engel's
to
P.2d
the
a
"law
damages
for
that
its
prior
of
harm
legal
that,
not
of
v.
Negaard
not
of
the
damages.
that
but
Feda
It
for
only
defendant
he
did
as a result
require
by
that
and that
however,
damages,
duty
is
every
imposes
proximately
152 Mont.
(1968),
439-40.
the
opportunity
close
of
that
she
contract,
but
as
duties
compensable
does
concluded
of
At
established
The ruling,
recovery
Wagner had the
Court
compensable
her
reversed
fiduciary
legally
plaintiff."
damages.
breach
when
she asserts
ruling
to prove
any
be
436,
judgment
duties.
obligation
a breach
trial,
her
those
that
injury
47,
erred
award
and improperly
owed Wagner
suffered
must
for
to
Court
Specifically,
summary
Engel
her
established
injury
duties.
arbitrarily
breached
relieve
District
ruling.
of
a matter
the
and failed
fiduciary
The District
as
that
counterclaim
of
District
contends
the
result
that
of
10
to
all
was
the
submit
evidence,
entitled
she did
Engel's
evidence
not
however,
to
the
damages
for
suffer
breach
and to
any legally
of
fiduciary
duties.
It
was,
dismiss
therefore,
Wagner's
breach
Accordingly,
it
declined
duties
of
and instead
that
the
her
for
the
District
to attorney
Glacier
fees
Court
Court
Engel's
Court
to
did
not
breach
err
of
when
fiduciary
counterclaim.
3
err
when it
from
and costs
District
counterclaim.
District
Wagner damages
dismissed
the
duties
ISSUE
Did
for
fiduciary
we hold
to award
proper
held
Wagner's
that
share
Engel
of
the
is
entitled
recovery
from
Log Homes?
When
damages,
the
it
District
held
Court
calculated
and
awarded
Wagner's
that:
[Engel]
is entitled
to first
deduct his attorney
fee and
owed by
Shrewsbury
in
the
total
amount
of
costs
$10,515.00
from the total
recovery
of $28,547.00
for
Shrewsbury
from
Glacier
Log Homes,
resulting
in net
proceeds
of $18,032.00
to be divided
and paid according
to the July
2, 1991 agreement.
On appeal,
it
held
share
that
of
expressly
Engel
was not
the
rendered
an
subsequently
relationship,
deduct
his
if
District
fees
Specifically,
Engel
to
Wagner's
"first
its
fee
when
his
from
her
that
when
the
attorney
deduct
it
that
summary
is
Wagner's
established
relationship.
we conclude
and costs
fee
and
asserts
prior
erred
judgment
ruling
attorney.
on remand
determined
Court
she
we recognize
attorney-client
attorney
the
attorney
to
contradicted
outset,
moot
that
entitled
allowed
it
At
fact,
is
contends
recovery.
Court
costs,"
that
Engel
the
District
Wagner
that
that
and
there
Engel
costs."
11
argument
that
However,
was
is
The
not
still
an
be
was,
in
it
is
there
even
if
attorney-client
entitled
parties'
could
to
July
2,
"first
1991,
contract
expressly
attornev
fees,
balance
of
in
documented
the
(Emphasis
states,
recovery
added.)
relevant
attornev
form
pursuant
Therefore,
share
of
fees
first
we hold
Accordingly,
it
determined
from
recovery
that
of
to
that
the
is
Engel
share
Wagner's
is
.
incurred
shall
to
"After
follows:
the
be split
parties'
the
in
contract,
be calculated
half."
deducted.
are
the
as
exoenses
whatever
in
Wagner's
part,
entitled
the
District
Court
to
after
attorney
recovery
from
Glacier
did
Engel's
not
err
fees
when
and
costs
Log Homes.
ISSUE 4
Did
the
awarded
Court
discovery
for
District
abuses
Homes belong
entirely
When the
that
the
to
District
in
$28,547.00
[the
payment]."
The District
the
sanctions
$8,700
designated
amount
of
as
log
award
Glacier
sanctions
Glacier
damages,
obtained
by
Log Home case
at
it
against
Wagner's
$27,247
plus
specifically
fees,
the
Log
attorney?
form
against
that
lawsuit
calculated
Court
held
concluded
Glacier
should
the
as
sum of
$1,300
that
Log
Homes
be
cash
because
included
not
held
[Engel]
is
the
it
had
been
in
the
"recovery."
determined
Wagner
that
amount
of
award
is
a part
contends
the
"recovery."
therefore,
the
home valued
attorney
On appeal,
it
Engel,
the
it
a prior
whatever
in
attorney
when
in
Court
"recovery
Shrewsbury's
err
it
that
sanctions
the
should
Specifically,
of
should
the
District
not
Court
be
she asserts
"recovery
be distributed
in
whatever
accordingly.
12
erred
included
that
form"
when
in
the
and
the
$8,700
that,
We recognize
against
Glacier
fact,
that
that,
Log Homes in
designate
fact
when the District
designation,
the underlying
them as "attorney
is not dispositive
the
fees."
of this
sanctions
Court
awarded
lawsuit,
However,
issue
sanctions
it
did,
we conclude
and that,
award does not belong
despite
entirely
in
that
that
to the
attorney.
We agree
Hamilton
v.
with
Ford Motor
that
case,
that
an attorney
addition
the court
of
provided
the
the court
the
(D. C. Cir.
D. C. Circuit
1980),
recognized
seek
that
compensation
in the contract
contract."
1959),
Comm'n (Iowa
Court
745.
636 F.2d
"[ilt
In
is elementary
from
the
client
. . . [is]
in
and
to be covered
636 F.2d
at
748
265 F.2d 377; Carmichael
1974),
in
between the attorney
Hamilton,
(Il. C. Cir.
Highway
of
[A]11 compensation
In re Laughlin
State
Co.
initially
. .
terms
reasoning
may not
to that
the client
the
the
by
(citing
v. Iowa
Ultimately,
219 N.W. 2d 658).
held:
[Albsent
a provision
in the [attorney-client]
contract
allocating
Rule 37(b) [discovery
abuse sanctions]
awards
of attorney's
fees,
the plain
terms of the Retainer
Agreement
in this
case provide
that
the one-third
contingency
fee is the sole source of compensation
for
the attorneys.
Hamilton,
636 F.2d at 748.
With
Homes,
With
regard
Shrewsbury
regard
to
to
the
underlying
and Engel
Engel's
entered
compensation,
lawsuit
into
their
against
Glacier
a retainer
agreement.
agreement
stated
follows:
is
One-third
(33%) of the amount recovered
settled
without
the necessity
of trial;
13
if
Log
the case
as
Forty
percent
(40%) of the amount recovered
upon
of this
case;
Fifty
percent
(50%) of the amount recovered
after
a
successful
trial
verdict
and the case is appealed
and
upheld
on appeal.
trial
Their
agreement
percentage
of
exception
court
limited
by
of
this
deduction
of
of
2,
Engel
the
the
a part
settlement
1991,
expressly
settlement
the
District
Court
calculates
required
of
Accordingly,
the
be distributed
enforces
the
we hold
sanctions
pursuant
terms
award
to
that
the
from
the
the
terms
contract.
14
on the
Engel
(the
sanctions
award
of
award
between
Homes.
the
paid
of
a
Engel--on
the
Shrewsbury,
recovery,
and
whether
Concomitantly,
July
Wagner
by
Furthermore,
Wagner,
sanctions
whatever
based
is
and therefore,
into
by
which
by the
principles
not
sanctions
dispersement
to
in
and
recovery
into
$8,700
recovery
and,
compensation."
the
amount
include
the
"the
or other
the
to
"balance
entered
an
and fees.
$8,700
Log
a
compensation
$8,700
entered
Glacier
requires
suit,
excluded
package
contract
the
Shrewsbury's
behalf--and
from
and
of
the
to
provide
the
Engel's
costs
that
to
client),
of
appropriate
not
agreement
recipient
follows
Homes is
Shrewsbury's
July
proper
that
(the
attorney
and designated
pursuant
retainer
Shrewsbury
necessarily
Glacier
part
the
the
the
does
as sanctions
Therefore,
of
case,
It
we conclude
terms
is
it
recovered
Hamilton,
to
recovered.
fees.
the
attorney),
after
amounts
in
compensation
amount
attorney
delineated
facts
any
for
as
limits
2,
is
1991,
when
contract
entitled,
award
as
it
is
of
the
when
it
part
form."
District
Court
settlement
of
the
erred
amount
parties'
which
July
2,
is
to
1991,
ISSUE
Did
the
District
tape-recorded
Court
standard
of
388,
is
The test
for
abuse
injustice."
Tanner
913
P.2d
relating
to
the
v.
641,
the
of
of
the
707,
Prior
conversations
showing
Wagner
The
material
of
are
substantial
that
"left
review
trial
275 Mont.
we note
to
862 P.2d
the
in
(1996),
evidence
its
conscientious
resulting
Inc.
subject
Wagner
Engel
only
recorded
the
in
255 Mont.
414,
questions
to
(1992),
several
and herself
conversations
tapes
sound
the
364,
case
370-71,
were
on her
without
transcribed
telephone
answering
Engel's
and copies
machine.
knowledge
or
provided
to
were
discovery.
trial,
the
a quote
that
read
court,
trial,
the
during
record
of
247,
"whether
employment
the
abused
243,
is
reason
ruling,
court
261 Mont.
Additionally,
Mason v. Ditzel
between
recorded
At
trial
evidentiary
Island,
of
parties?
discretion
of
evidence
712.
to
consent.
Dream
651.
abuse."
842 P.2d
bounds
admissibility
discretion
manifest
(19931,
of
excluded
district
without
arbitrarily
or exceeded
Engel
whether
Cady
judgment
She
the
it
court's
v.
acted
430,
the
Hislop
390.
court
when
a district
review
discretion.
err
between
conversations
When we review
5
District
taken
[Engel]
the
and
quote,
stated
Court
directly
has
from
allowed
the
not
told
the
counsel
for
Engel
the
following
15
Wagner
tapes
read
"for
truth."
the
After
moved to
grounds
to
for
strike
his
into
purpose
counsel
the
the
of
for
quoted
objection:
"Objection.
exactly
Move to
granted
that
Wagner contends
Engel's
motion
the evidence
was illegally
several
court
purposes.
On that
this
"that
time,
be used for
the Right
After
District
Court's
agreed with
counsel
fact,
fact,
constitute
offered
valid
Accordingly,
discretion
evidence
for
law context,
for
we issue
that
however,
impeachment
a ruling,
at
may
MCA, and
Constitution
preclude
we conclude
that
Wagner's
Court
proffered
purposes,
the
was not based on
the District
merely
evidence
and did
was
not,
in
evidence.
the District
Engel's
§ l-3-208,
the evidence
impeachment
of the tape-recorded
she cites
evidence.
Rather,
impeachment
granted
that
in Montana's
Engel that
for
evidence
maintains
to exclude
we hold that
when it
in the criminal
it
purposes."
of the record,
arguments.
position,
of the taped conversations
obtained
decision
policy
in
contained
her
obtained
hand,
a review
of
which,
on the other
such public
not,
support
she requests
of illegally
when
even if
or other
the admission
erred
impeachment purposes
the transcriptions
of Privacy
Court
motion.
for
impeachment
Engel,
the District
Engel's
she asserts
of illegally
basis,
granted
That's
Specifically,
decisions
the admission
impeachment.
strike.
is admissible
In
not
Court
that
to
obtained.
federal
uphold
That's
The District
what he said."
On appeal,
it
Strike.
Court did not abuse its
to strike
motion
telephone
and excluded
conversations.
CROSS-APPEALISSUE 1
Did the District
Court
err
when it
contract?
16
held that
Engel breached
a
Engel,
July
2,
which
Shrewsbury,
Engel
was
lawsuit
against
Court
to
determined
contract
Wagner
described
which
1991,
and
with
distribute
Glacier
that
as
After
Engel's
breach
the
of
Engel
determined
essence,
in
respective
fully
that
he asserts
judgment
rights
The
binding.
It
of
the
its
damages
for
is
Court
1991,
contract.
2,
that
for
until
July
2,
Wagner
was
valid
entitled
to
to
form"
fifty
against
that
Engel
1992;
and,
cash
the
rights
1991,
legally
unambiguous
Glacier
of
terms
the
the
case
and a log
net
Homes.
Log
as we previously
payment
were
contract
and
percent
settled
the
contract.
the
pursuant
In
determine
those
of
erred
a declaratory
Court
be a breach
that,
a $10,000
rights
Court
Engel
she
with
against
held,
that
home valued
at
$27,000.
District
contract,
that
District
District
and
undisputed
The respective
and the
breached
Wagner
complaint
and that
found
found
included
approximately
District
accordance
the
July
his
not
Log Homes on May 1,
settlement
which
could
whatever
is
the
parties,
Wagner
it
in
in
underlying
the
Engel
on
manner
the
trial,
awarded
that
the
Shrewsbury,
in
Glacier
the
further
Furthermore,
have
Court
contract,
"recovery
to
Wagner
contends
he filed
there
Engel,
of
law
Court
to
of
District
between
of
he breached
that
order
determined
Prior
contract
the
proceeds
a matter
District
a
contract.
On cross-appeal,
when it
the
to compensate
trial,
into
particularity
Log Homes.
when he failed
terms.
entered
is
is
entitled.
of
the parties
correctly
obligated
have now been established
concluded
to
that,
disperse
to
Therefore,
17
whether
pursuant
Wagner
Engel
the
to
their
money
breached
to
the
contract
is
is,
at
entitled,
share
this
pursuant
of
the
net
Although,
it
point
in
to the
recovery
contract,
against
as previously
calculated
the
irrelevant;
time,
amount
Glacier
the
the
amount
of
District
did
not
when it
his
contract
and that
the
judgment
of
err
the
Wagner
the
District
entitled
CROSS-APPEAL
Did
the
District
Court
err
in
percent
erred
when
form"
whatever
damages,
and,
we hold
that
Engel
to damages.
is
Wagner
fifty
Court
determined
Court
her
District
Wagner's
is
way,
Log Homes.
"recovery
concomitantly,
Court
to receive
stated,
of
either
that
the
breached
Accordingly,
affirmed.
ISSUE
when it
2
awarded
Wagner prejudgment
interest?
When
damages,
ten
the
it
percent
settled
the
District
also
Court
per
annum
case
against
it
awarded
asserts
that,
be awarded
Court
its
In Montana,
5 27-l-211,
May 1,
Glacier
is
21,
breach
interest
of
at
date
contract
the
rate
of
on which
Engel
Court
erred
Log Homes.
prejudgment
interest
Wagner
1992--the
contends
February
from
entered
from
Wagner
if
prejudgment
Engel
On cross-appeal,
when
her
awarded
awarded
to
that
the
interest
be awarded
1996--the
date
District
from
at
May 1,
all,
it
on which
1992.
should
the
He
only
District
order.
the
MCA, which
right
to
provides
prejudgment
interest
is
governed
as follows:
Right
to Interest.
Every
person
who is entitled
to
recover
damages certain
or capable
of being made certain
by calculation
and the right
to recover
which is vested
in him upon a particular
day is entitled
also to recover
interest
thereon
from that day except during
such time as
the debtor
is prevented
by law or by the act of the
creditor
from paying
the debt.
18
by
We have
the
terms
already
of
the
concluded
parties'
July
breach
of
damages
for
that
settled
the
underlying
therefore,
that
and
Furthermore,
and
proceeds
at
certain.
it
awarded
1991,
agreement
that
Furthermore,
was
Accordingly,
when
that
failure
therefore,
breach.
Wagner
Engel's
2,
lawsuit
1992,
contract
that
the
to
was
in
we hold
that
the
share
District
Wagner's
of
the
claim
champerty
The
as
is
void
err
because
court
or maintenance
that
when
against
that
Engel
of
that
date.
the
settlement
of
being
Court
from
did
May 1,
made
not
err
1992.
3
it
declined
public
neither
to
policy
addressed
issues.
However,
Wagner's
entire
claim
public
Specifically,
policy
for
he alleges
underlying
lawsuit
to
the
witness;
ISSUE
to
hold
on the
that
grounds
and maintenance?
against
support
interest
Court
District
champerty
contends
District
prejudgment
a
entitled
on
sum capable
CROSS-APPEAL
Did
Wagner
with
Log Homes on May 1,
occurred
her
which
is
undisputed
Glacier
breach
entitled
time,
is
comply
constituted
Wagner
it
against
to
and
against
lawsuit;
(3)
The definition
that
is
a stranger
of
is
fail
to
maintenance
because
and
who was not
Log Homes:
being
(1)
compensated
the
is
analyzed
the
on cross-appeal,
champerty
Wagner,
Glacier
(2)
should
nor
Engel
it
is
maintenance.
a party
to
contributed
for
her
the
money
role
lawsuit.
as follows:
[Mlaintenance
involves
the act of improperly,
for
the
purpose of stirring
up litigation
and strife,
encouraging
others
either
to bring
actions
or to make defenses
that
they have no right
to make.
In any event,
maintenance
is
an officious
intermeddling
in a suit
which
in no way
belongs
to the intermeddler
by maintaining
or assisting
either
party
to the action,
with money or otherwise,
to
19
void
as a
prosecute
or defend
it.
In other
words
it
is
intermeddling
in a suit
by a stranger,
one having
privity
or concern
in the subject
matter
and standing
no relation
of duty to the suitor.
14 Am. Jur.
2d Champerty
The definition
Champerty
bargain
by
a portion
successful
champertor
expense.
14 Am. Jur
In
the
of
2d Champerty
v.
2d 819,
825,
doctrine
in
modern
as
now
of
interest."
Taft
the
which
with
persuasive.
Missouri
"has
takes
or
this
assigned
have,
or
rule
Court
record,
honestly
believed
that
to
Wagner
the
rights
Homes;
and
the
of
Shrewsbury's
Wagner
Furthermore,
and
that
we hold
testified
that
to
lawsuit
that
lawsuit
the
was
District
20
"[tlhe
who
doctrine
interfere
they
to
its
in
have,
reasoning
we conclude
she had,
the
one-half
right
underlying
the
prior
to
and mellowed
believe
and find
the
example,
that
an
825.
of
For
that
those
1975),
concluded
tempered
honestly
at
Schnabel
Log
Accordingly,
the
(MO. App.
Appeals
hold
a review
litigation.
attorney
of
on to
least
at
Inc.
of
After
had,
Glacier
Co.,
been narrowed,
525 S.W.Zd
the
§ 3 (1964).
Court
went
out
they
Schnabel,
We agree
as follows:
Broadcasting
The court
practiced
in
is
and Maintenance
champerty
times."
litigation
basis
champerty
5 2 (1964).
is a species
of maintenance.
It is . . . a
a champertor
with a plaintiff
or defendant
for
of the matter
involved
in a suit
in case of a
termination
of
the
action,
which
the
undertakes
to maintain
or carry
on at his own
Schnabel
525 S.W.
and Maintenance
the
no
in
those
the
from
formed
not
the
Log Homes.
Engel
her
did
in
Shrewsbury
Glacier
protecting
Court
Wagner
commissions
believed
be
an interest
commissions
against
she
that
litigation
of
to
was
her
interests.
err
when
it
failed
to
declare
Wagner's
claim
void
for
champerty
and
maintenance.
The judgment
and
of the District
affirmed
part,
proceedings
in
consistent
and
with
Court
the
this
opinion.
We Concur:
Justices
case
/
21
is hereby
is
reversed
remanded
for
in part
further
March 25, 1997
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mail, prepaid, to the
following named:
Sean Hinchey, Esq.
Bottomly Law Offices
P.O. Box 1976
Kalispell, MT 59903-1976
James C. Bartlett, Esq.
Hash, O’Brien & Bartlett
P.O. Box 1178
Kalispell, MT 59903-1178
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA
