KOSENA v ECK

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No. 80-205 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 BRUCE A. KOSENA, d/b/a THE PUB, Plaintiff and Appellant, NORMAN E. ECK, TRUSTEE OF JOHN A. ECK, TRUST, Defendants and Respondents. Appeal from: District Court of the First Judicial District, In and for the County of Lewis & Clark, The Honorable H. William Coder, Judge presiding, Counsel of Record: For Appellant: Robert T. Cumrnins, Helena, Montana Charles A. Smith, Helena, Montana For Respondent: Jackson, Oitzinger & Pflurdo,Helena, Montana Submitted on Briefs: Decided: Filed: OCT 2 9 1981 April 15, 1981 October 29, 1951 Mr. J u s t i c e D a n i e l J . Court. Shea d e l i v e r e d the Opinion of P l a i n t i f f a p p e a l s , and d e f e n d a n t s c r o s s - a p p e a l , the from a judgment e n t e r e d i n Lewis and C l a r k County D i s t r i c t C o u r t declaring the rights of the plaintiff as tenant and the defendants a s landlords. The t r i a l c o u r t r u l e d i n f a v o r o f t e n a n t t h a t a v a l i d l e a s e agreement e x i s t e d , t h a t t h e r e n t a l due under t h e l e a s e was $650 $5,000 as tenant. tenant per month, their and share of The t r i a l c o u r t did not have a that the landlords must costs repairs ruled i n favor of v a l i d mechanics' w h i c h h e had c o m p l e t e d on t h e p r e m i s e s , l o r d s were e n t i t l e d t o p r e j u d g m e n t payments. of pay tenant made by landlords that lien for repairs and t h a t t h e l a n d - i n t e r e s t on t h e r e n t a l The t r i a l c o u r t f u r t h e r r u l e d t h a t b o t h p a r t i e s m u s t b e a r t h e i r own c o s t s and a t t o r n e y f e e s . W e a f f i r m t h e f i r s t two r u l i n g s a s t o t h e e x i s t e n c e of t h e l e a s e a g r e e m e n t and t h e amount t o be paid--$650 month. to the per W remand t o t h e t r i a l c o u r t f o r f u r t h e r f i n d i n g s a s e amount awarded repairs to premises. ruling that the no to mechanics' tenant W e to reverse lien compensate the existed, him trial the for court's award of p r e j u d g m e n t i n t e r e s t , and t h e o r d e r t h a t e a c h s i d e b e a r i t s own c o s t s a n d a t t o r n e y f e e s . On F e b r u a r y 29, 1 9 6 8 , J. A . E c k and M a r i e A. E c k , t h e p a r e n t s and p r e d e c e s s o r s o f t h e l a n d l o r d s , l e a s e d a p o r t i o n of a Helena b u s i n e s s W i l l i a m 0 . Bahny. building to Reginald L. Brewer and The o t h e r p o r t i o n o f t h i s b u i l d i n g , known a s "Howard's P i z z a , " was e x p r e s s l y e x c e p t e d from t h e l e a s e agreement. The l e a s e a g r e e m e n t had a p r i m a r y t e r m o f f i v e y e a r s w i t h a n o p t i o n t o renew f o r f i v e a d d i t i o n a l y e a r s . It f u r t h e r p r o v i d e d f o r a r e n t a l r a t e o f $275 p e r month, t o b e a d j u s t e d by any i n c r e a s e i n t a x e s on t h e p r e m i s e s a b o v e t h e 1967 t a x e s . The l e a s e d p r e m i s e s , known a s "The P u b , " o p e r a t e d a s a b a r by Brewer and Bahny. was The l e a s e a g r e e m e n t r e q u i r e d t h a t an a s s i g nm e n t o f t h e l e a s e be s u b j e c t t o t h e w r i t t e n consent of t h e l a n d l o r d s . On A p r i l 24, 1 9 6 8 , o n e o f the original tenants, Bahny, "The Pub" t o B r u c e A. Kosena, t h e t e n a n t i n v o l v e d h e r e . part of this agreement s o l d h i s one-half the tenant interest in obtained a As written a s s i g n m e n t o f l e a s e f r o m Bahny, a s w e l l a s a w r i t t e n c o n s e n t t o a s s i g n m e n t of l e a s e from t h e l a n d l o r d s . The "The tenant Pub" interest until in and Brewer January "The Pub" continued 15, to 1971, the when tenant, became t h e s o l e p r o p r i e t o r and l e s s e e . of the landlords However, the was tenant to jointly Brewer and so operate sold the his tenant The w r i t t e n c o n s e n t not o b t a i n e d f o r t h i s t r a n s a c t i o n . made the rent payments, and l a n d l o r d s a c c e p t e d t h e payments w i t h o u t o b j e c t i o n . the Sometime i n 1 9 7 2 , t h a t p a r t o f t h e b u i l d i n g known a s " H o w a r d ' s P i z z a " was t a k e n o v e r by t h e t e n a n t and made a p a r t of "The P u b . " The tenant additional and area landlords a part verbally of the agreed leased i n c r e a s e t h e r e n t a l t o $500 p e r month. to make premises and this to The t e n a n t c o n t i n u e d t o o p e r a t e "The Pub" w i t h o u t f u r t h e r p r o b l e m s u n t i l J a n u a r y 1 9 7 4 , when t h e b u i l d i n g was s u b s t a n t i a l l y d e s t r o y e d by f i r e . The l e a s e a g r e e m e n t c o n t a i n e d a f i r e c l a u s e , which s t a t e d i n part: "AND PROVIDED, ALSO t h a t i n c a s e t h e b u i l d i n g on s a i d demised p r e m i s e s , o r any p a r t t h e r e o f , s h a l l d u r i n g s a i d t e r m be d e s t r o y e d o r d a m a g e d by f i r e o r o t h e r u n a v o i d a b l e c a s u a l t y , s o t h a t t h e same s h a l l be u n f i t f o r use, then s a i d r e n t or proportionate p a r t t h e r e o f s h a l l be a b a t e d u n t i l s a i d p r e m i s e s s h a l l h a v e b e e n p u t i n p r o p e r r e p a i r by t h e L e s s o r s , o r t h i s l e a s e s h a l l have been determined, a t t h e i r election." After and the considered fire, the tenant relocating found o t h e r h i s business. 1 9 7 4 , a p p r o x i m a t e l y s i x months a f t e r found a place t o relocate, employment, I n June or the fire, n o t having the tenant discussed with possibility of restoring July the the landlords the original building. The l a n d l o r d s e l e c t e d t o r e s t o r e t h e b u i l d i n g , and t h e t e n a n t v e r b a l l y a g r e e d t o r e s t o r e o r r e i n s t a l l t h e things necessary t o operate h i s business. completed, 1974. and the tenant reopened The r e p a i r s w e r e "The Pub" i n November The p a r t i e s had a l s o v e r b a l l y a g r e e d t h a t t h e r e n t r e m a i n a t $500 p e r month i n November and December 1 9 7 4 , b u t t o be i n c r e a s e d t o $650 i n J a n u a r y 1 9 7 5 . The t e n a n t p a i d t h e s e amounts and t h e l a n d l o r d s a c c e p t e d them a s t h e y became due. However, tenant that, i n e a r l y January 1975, t h e l a n d l o r d s advised commencing i n F e b r u a r y 1 9 7 5 , t h e m o n t h l y r e n t would i n c r e a s e t o $ 1 , 1 7 5 . The mechanics' tenant lien This s t a r t e d the dispute. refused against to the pay the $1,175 premises in and the filed amount a of $ 7 4 , 0 0 0 , a l l e g e d l y t o r e c o v e r t h e l a b o r and m a t e r i a l s h e had expended in restoring the premises after the fire. In F e b r u a r y 1 9 7 5 , t h e t e n a n t t e n d e r e d a c h e c k f o r $650 w h i c h was r e f u s e d by t h e l a n d l o r d s , who s t i l l demanded $ 1 , 1 7 5 p e r month. The t e n a n t then f i l e d a lawsuit e x i s t e n c e and t e r m s of t h e mechanics' month lien. into court and t o determine t h e t h e l e a s e and t o a l s o f o r e c l o s e o n The t e n a n t c o n t i n u e d t o p a y $650 p e r he o b t a i n e d a temporary restraining order t o prevent h i s eviction. T r i a l was h e l d on F e b r u a r y 1 6 and 1 7 , 1 9 7 8 , and o n A p r i l 26, 1 9 7 8 , t h e t r i a l c o u r t i s s u e d a n o r d e r f r o m which t h i s appeal is taken. B e c a u s e o n e r u l i n g d e p e n d s on t h e o t h e r , we d i s c u s s the issues i n the following order. First, t h e v a l i d i t y of t h e l e a s e agreement; second, t h e l e g a l i t y of t h e l a n d l o r d s ' demand i n c r e a s i n g r e n t t o $ 1 , 1 7 5 p e r month f r o m $650; t h i r d , t h e award o f i n t e r e s t t o t h e l a n d l o r d s o n e a c h $650 payment t h e t e n a n t h a s been v o l u n t a r i l y d e p o s i t i n g i n c o u r t s i n c e he filed the lawsuit; fourth, l i e n f i l e d by t h e t e n a n t ; the validity of t h e mechanics' f i f t h , t h e award o f $ 5 , 0 0 0 t o t h e t e n a n t a s compensation f o r r e p a i r s ; s i x t h and f i n a l l y , the t r i a l c o u r t ' s r u l i n g s on a t t o r n e y f e e s . VALIDITY OF LEASE AGREEMENT The l a n d l o r d s c o n t e n d t h a t t h e t r i a l c o u r t e r r e d i n not holding law. This 70-1-607(4), terminates. that the l e a s e was contention MCA, is which terminated based states in in a s a matter part part: on of section "When h i r i n g The h i r i n g o f a t h i n g t e r m i n a t e s : . . . ( 4 ) by t h e d e s t r u c t i o n of t h e t h i n g h i r e d . " T h i s s t a t u t e p r o v i d e s , d i s j u n c t i v e l y , s e v e r a l ways by which hiring can terminate. However, the landlords urge t h a t s u b s e c t i o n ( 4 ) be a p p l i e d e x c l u s i v e l y t o t e r m i n a t e t h e l e a s e agreement. I n S o l i c h v. H a l e ( 1 9 6 7 ) , 1 5 0 Mont. 358, 435 P . 2d 8 8 3 , i n t e r p r e t i n g t h e p r e d e c e s s o r o f s e c t i o n 70-16 0 7 , MCA, t h i s C o u r t s t a t e d : it is found t h a t t h e b u i l d i n g i s "If d e s t r o y e d , by o p e r a t i o n o f law t h e l e a s e would -be t e r m i n a t e d . Only an agreement t o t h e c o n t r a r y b e t w e e n t h e two p a r t i e s c o u l d prevent t h e a c t i o n of t h i s s t a t u t e [section 70-1-607, MCA] 1 5 0 Mont. a t 361-362. (Emphasis added.) ." Here, the lease agreement does contain an express a g r e e m e n t t o t h e c o n t r a r y which p r e c l u d e s t h e o p e r a t i o n o f s e c t i o n 70-1-607, The had been landlords "so i t was that MCA. long void a l s o contend abandoned, and that the disregarded, ineffective before original and the lease repudiated" time of the T h i s c o n t e n t i o n i s a p p a r e n t l y b a s e d on t h e f o l l o w i n g fire. allegations: (1) T h a t t h e t e n a n t f a i l e d t o o b t a i n t h e w r i t t e n consent t o t h e assignment of l e a s e f r o m t h e l a n d l o r d s when t h e t e n a n t b o u g h t o u t Brewer's one-half i n t e r e s t i n "The Pub" o n J a n u a r y 15, 1971. ( 2 ) T h a t t h e p a r t i e s , by v e r b a l l y m o d i f y i n g t h e l e a s e agreement, i n v a l i d a t e d t h e e n t i r e lease. ( 3 ) Finally, t h a t the tenant did not properly e x e r c i s e h i s option t o extend t h e l e a s e term when t h e p r i m a r y t e r m e x p i r e d i n 1 9 7 3 . These contentions a r e supported n o r by t h e f a c t s . neither by the law I n t h e i r b r i e f , counsel for the landlords f a i l s t o c i t e any l e g a l a u t h o r i t y t o s u p p o r t t h e t h e o r y t h a t the is an absolute t o a v a l i d a s s i g n m e n t of t h e l e a s e . written In fact, consent prerequisite of the landlords t h e g r e a t weight of a u t h o r i t y is t o t h e c o n t r a r y . restriction imposed assignment of and is n o t lessor. aff 'd, are Gazlay v . 210 U.S. a lease t h e l e a s e is a looked restrictions in upon to be favor the by 687, against 1 9 0 6 ) , 1 4 7 F. 52 L.Ed. 950. a an alienation courts. strictly (6th Cir. must be g i v e n a l i m i t e d e f f e c t . d a t e d F e b r u a r y 29, against construed 41, 28 S . C t . against restraint with Williams agreement First, Such the 678, Such t e r m s Here, t h e l e a s e agreement, 1 9 6 8 , and s i g n e d by t h e p r e d e c e s s o r s o f b o t h t h e t e n a n t and l a n d l o r d s , s t a t e s a s f o l l o w s : "The L e s s e e s a g r e e n o t t o s u b l e a s e o r a s s i g n a l l o r any p a r t o f t h e d e m i s e d p r e m i s e s d u r i n g t h e term of t h i s l e a s e without f i r s t o b t a i n i n g t h e w r i t t e n c o n s e n t of t h e L e s s o r s thereto." ( S e e page 5 of l e a s e a g r e e m e n t . ) In April 1968, the predecessors of the consented i n w r i t i n g t o Bahny's assignment of in the lease however, to centers co-lessee, the on tenant. the later The landlords his interest landlords' departure of argument, the tenant's B r e w e r , on J a n u a r y 1 5 , 1 9 7 1 , when t h e t e n a n t t o o k over t h e s o l e o p e r a t i o n of t h e leased premises. The t e n a n t had no l e g a l d u t y t o o b t a i n t h e l a n d l o r d s ' w r i t t e n c o n s e n t t o h i s agreement w i t h Brewer. i n t e r p r e t a t i o n demanded o f application Lipsker P.2d of v. the provision In Lipsker, this landlord's consent t o the the ments." such r e s t r i c t i o n s p r o h i b i t s t h e to a subsequent assignment. B i l l i n g s Boot Shop ( 1 9 5 5 ) , 1 2 9 Mont. 660. obviates The n a r r o w necessity of Court declared 420, that, 288 "The [ o r i g i n a l ] a s s i g n m e n t of a l e a s e consent to subsequent assign- 1 2 9 Mont. a t 427. The r e c o r d a l s o r e v e a l s t h a t t h e l a n d l o r d s knew t h a t t h e t e n a n t had become t h e s o l e p r o p r i e t o r before t h i s dispute arose. and l e s s e e l o n g And, t h e l a n d l o r d s c o n t i n u e d t o r e c e i v e r e n t a l payments from t h e t e n a n t f o r a t l e a s t f o u r y e a r s and n e v e r o b j e c t e d t o t h e a s s i g n m e n t . have long waived restriction. any right to assert The l a n d l o r d s breach of the Crossman v . F o n t a i n b l e a u H o t e l C o r p . ( 5 t h C i r . 1 9 5 9 ) , 273 F.2d 720. The 28-2-1602, landlords' counsel has also ignored section MCA, which e x p r e s s l y s a n c t i o n s v e r b a l m o d i f i c a - t i o n of w r i t t e n c o n t r a c t s , i n c l u d i n g , of course, lease. R o d g e r s v . S a u n d e r s ( 1 9 6 4 ) , 1 4 4 Mont. a written 424, 396 P.2d 817. Here, t h e executed v e r b a l agreements t o i n c r e a s e t h e r e n t a l p a y m e n t s and t o expand t h e l e a s e d p r e m i s e s , m o d i f i e d t h e l e a s e agreement. w e hold t h a t Finally, the tenant validly exercised h i s o p t i o n t o renew t h e l e a s e when t h e o r i g i n a l t e r m e x p i r e d i n 1973. The a g r e e m e n t d o e s n o t r e q u i r e t h a t s u c h a n o p t i o n m u s t be e x e r c i s e d by w r i t t e n n o t i c e t o t h e l a n d l o r d s . The o p t i o n may be e x e r c i s e d v e r b a l l y o r e v e n by c o n d u c t o f t h e parties which option, F l i n t v. Mincoff ( 1 9 6 0 ) , 1 3 7 Mont. 340, question of to a exhibits a fact clear be intent to (Alaska 559 correctly ruled option to P.2d that renew. 1054. the tenant Considering Here, by all v. the trial of substantial the Martens court effectively exercised the the 353 P.2d Inc. Fun P r o d u c t s D i s t r i b u t o r s , 1977), 549, determined circumstances. exercise his amount o f l a b o r and m a t e r i a l s p r o v i d e d by t h e t e n a n t a f t e r t h e f i r e , all with the knowledge and consent of the landlords, it would be l u d i c r o u s t o i n f e r t h a t t h e p a r t i e s b e l i e v e d t h a t the primary become lease term had expired o n l y a month-to-month tenant. and that The tenant tenant had clearly demonstrated h i s i n t e n t t o e x e r c i s e t h e option. W hold, t h e r e f o r e , t h a t t h e o r i g i n a l l e a s e agreement e o f F e b r u a r y 1 9 6 8 was s t i l l v a l i d and i n e f f e c t a t a l l times relevant t o t h i s case, until t h e e x p i r a t i o n of the option t e r m i n 1 9 7 8 , s u b j e c t t o t h e v e r b a l m o d i f i c a t i o n s made by the parties. THE LANDLORDS' DEMAND FOR $ 1 , 1 7 5 P E R MONTH RENTAL Our d e c i s i o n d e c l a r i n g t h a t t h e l e a s e a g r e e m e n t was v a l i d a n d e f f e c t i v e d i s p o s e s a l s o t h e l a n d l o r d s ' demand t h a t t h e r e n t be i n c r e a s e d t o $ 1 , 1 7 5 p e r month. The t e n a n t a t no t i m e c o n s e n t e d t o r a i s e t h e m o n t h l y r e n t a l beyond $650, and t h e r e f o r e t h e l a n d l o r d s had no r i g h t t o i n c r e a s e t h e r e n t t o $ 1 , 1 7 5 p e r month. The t e r m s of t h e l e a s e , a s m o d i f i e d by t h e p a r t i e s , had s e t t h e r e n t a l p a y m e n t s a t $650 p e r month. T R I A L COURT'S AWARD OF INTEREST The t r i a l c o u r t awarded t h e l a n d l o r d s i n t e r e s t on t h e r e n t a l p a y m e n t s " a t t h e r a t e o f 6 p e r c e n t p e r annum f r o m t h e d u e d a t e o f e a c h payment a s r e n t on t h e p r e m i s e s . " Essen- tially, should the trial court determined that interest a c c r u e a s of t h e t i m e t h a t e a c h r e n t a l payment became d u e . The record clearly shows that in February 1975, the l a n d l o r d s r e f u s e d t o a c c e p t t h e $650 m o n t h l y r e n t payment t e n d e r e d by t h e t e n a n t . The t e n a n t t h e n f i l e d a l a w s u i t and t e n d e r e d t h e $650 m o n t h l y p a y m e n t s into court. He had no o t h e r c h o i c e , a s t h e l a n d l o r d s p r e v e n t e d him f r o m p a y i n g h i s debt as it came due. Section 27-1-211, clearly MCA, r e l e a s e s t h e t e n a n t from any o b l i g a t i o n t o pay i n t e r e s t : "27-1-211. Right t o i n t e r e s t . Every person who i s e n t i t l e d t o r e c o v e r damages c e r t a i n o r c a p a b l e o f b e i n g made c e r t a i n by c a l c u l a t i o n and t h e r i g h t t o r e c o v e r w h i c h i s v e s t e d i n him upon a p a r t i c u l a r d a y i s e n t i t l e d a l s o t o r e c o v e r i n t e r e s t t h e r e o n from t h a t day e x c e p t d u r i n g such time a s prevented b y ------ r by t h e a c t o f t h e c r e d i t o r f r o m law o paying t h e debt." (Emphasis added.) B e c a u s e t h e l a n d l o r d s were e n t i t l e d t o no more t h a n $650 p e r month, tendered payment, it was which their own resulted refusal in the to accept tenant the filing a l a w s u i t and p r e v e n t e d them f r o m r e c e i v i n g e a c h payment a s i t became d u e . By any s t a n d a r d s , t h e c o n d u c t of t h e l a n d l o r d s p r e v e n t e d t h e t e n a n t from making t h e r e q u i r e d p a y m e n t s . The t e n a n t s h o u l d n o t be p e n a l i z e d f o r a t t e m p t i n g t o comply w i t h t h e terms of t h e l e a s e agreement, be for rewarded payments. unjustifiably nor should t h e l a n d l o r d s refusing to accept the The o r d e r a l l o w i n g i n t e r e s t i s r e v e r s e d . THE V A L I D I T Y OF PLAINTIFF'S MECHANICS' L I E N Upon t h e i r bound under election to repair, the lease necessary t o provide operate his agreement to t h e l a n d l o r d s became make such repairs as the tenant with s u i t a b l e premises t o business. The landlords willfully abrogated t h e i r d u t y u n d e r t h i s c o n t r a c t when t h e y r e f u s e d t o c o m p l e t e the repairs. T h i s r e f u s a l compelled t h e t e n a n t t o complete the r e p a i r s himself, and h e d i d s o w i t h t h e knowledge and consent of t h e l a n d l o r d s . contract between the These f a c t s e s t a b l i s h an i m p l i e d parties. An implied s u f f i c i e n t t o support a v a l i d mechanics' l i e n . - Mont . Co. v . S h e a ( 1 9 7 9 ) , 37. , a mechanics' remedial in nature, natural justice, , Mont. ". . . lien its with 589 P.2d 1 4 1 , 1 4 4 . M & R Const. T h i s Court has noted is a c r e a t u r e of foundation not contract." is 589 P.2d 1 3 8 , 36 S t . R e p . (See a l s o cases c i t e d t h e r e i n . ) that contract in statute, equity Beck v . Hanson ( 1 9 7 8 ) , and - The e q u i t i e s w e r e c l e a r l y i n favor of t h e t e n a n t . The repair, landlords willfully breached their promise to and t h e y w e r e f u l l y a w a r e t h a t t h e t e n a n t was t h e n compelled completed to the complete the repairs, work. the After landlords the then tenant had attempted, contrary t o t h e terms of the l e a s e , t o d r a s t i c a l l y increase t h e r e n t a l payments. dealing. T h a t c a n h a r d l y be c l a s s i f i e d a s f a i r I n denying court relied t h e mechanics' on a clause in lien, the however, l e a s e which the trial required the tenant t o "pay and d i s c h a r g e " a n y l i e n s f i l e d a g a i n s t t h e premises. That clause required t h e tenant: "1. To p a y a n d d i s c h a r g e p r o m p t l y , a l l l i e n s and o b l i g a t i o n s o f any n a t u r e and kind w h a t s o e v e r which may a t t a c h t o o r be imposed upon s a i d p r e m i s e s , o r t o s a i d l e a s e h o l d , c r e a t e d o r i n c u r r e d by s a i d Lessees, t o p a y a l l r e a s o n a b l e c o s t s , a t t o r n e y ' s f e e and e x p e n s e s t h a t s h a l l be made a n d - o c c u r r e d by t h e L e s s o r s i n e n f o r c i n g t h e c o v e n a n t s of t h e agreements i n t h i s l e a s e . " (Emphasis added.) The c l e a r t h i s c l a u s e is t o p r o h i b i t i n t e n t of t e n a n t from h a v i n g work d o n e which would filed But against the premises, i t was here the or result in a lien t o pay t h e l i e n s i f l a n d l o r d s who initiated the the filed. repairs. The l a n d l o r d s , by e l e c t i n g t o r e p a i r t h e p r e m i s e s a f t e r t h e fire, " c r e a t e d o r incurred" t h e o b l i g a t i o n t o complete such repairs. The t e n a n t was c o m p e l l e d t o do t h e work when t h e l a n d l o r d s f a i l e d t o complete it a f t e r e l e c t i n g t o r e p a i r t h e p r e m i s e s under t h e f i r e c l a u s e i n t h e l e a s e . The t r i a l c o u r t a l s o n o t e d s e v e r a l a l l e g e d t e c h n i c a l defects in t h e mechanics' lien. Specifically, the trial c o u r t r e f e r r e d t o t h e f a c t t h a t t h e l i e n was f i l e d by " B r u c e A. Kosena" Kosena, whereas d/b/a technical The this action This Pub." discrepancy, otherwise valid l i e n . was and is it filed w i l l an v. St.Rep. P.2d Selsco "Bruce not invalidate an The l i e n s t a t u t e m u s t be i n t e r p r e t e d (1980), - Mont. , Morrison-Maierle 606 P.2d 299; F a u s e t t v . B l a n c h a r d ( 1 9 6 9 ) , 1 5 4 Mont. 319. A. inconsequential l i b e r a l l y t o p r o t e c t t h e r i g h t of t h e l i e n . Inc. by Furthermore, the fact that some of 1085, 37 301, 463 the items c l a i m e d i n t h e l i e n may n o t be l i e n a b l e d o e s n o t i n v a l i d a t e the entire lien. 144 P.2d 186; Smith v. Caird Gunniss Engineering ( 1 9 4 4 ) , 1 1 5 Mont. Works v. 362, Seven-Up Gold ( 1 9 4 0 ) , 111 Mont. 471, 111 P.2d 267. Mining Co. The l a n d l o r d s ' c o n d u c t t h r o u g h o u t t h i s t r a n s a c t i o n i s inexcusable. repair Their the willful premises, significant repairs and breach their made by of an obligation ratification the is tenant, of their increased totally rental unjustified payments after demand the alone s u f f i c i e n t l e g a l b a s i s f o r t h e f i l i n g of a mechanics' Further, to a lien. drastically completion the for of the r e p a i r s p r e s e n t s an even s t r o n g e r e q u i t a b l e b a s i s t o uphold The t e n a n t i s e n t i t l e d t o a m e c h a n i c s ' the lien. t h e f u l l amount o f t h e v a l u e of lien in any permanent r e p a i r s t h a t were t h e d u t y of t h e l a n d l o r d s t o p r o v i d e . TRIAL COURT AWARD OF $ 5 , 0 0 0 TO TENANT AS COMPENSATION FOR REPAIRS The t r i a l c o u r t o r d e r e d t h e l a n d l o r d s t o pay a sum o f $ 5 , 0 0 0 t o c o m p e n s a t e t h e t e n a n t f o r r e p a i r s t h a t h e made t o restore the premises af t e r the fire. The a r r i v e d a t t h i s f i g u r e i n a m y s t e r i o u s way. court The t r i a l c o u r t items which were i n s t a l l e d by t h e t e n a n t and w h i c h listed were of court trial b e n e f i t b o t h t o t h e t e n a n t and t h e l a n d l o r d s . valued these that the parties items at $10,000, and should "share equally" items. B u t no b a s i s e x i s t s court's valuation of the in the items at then determined t h e c o s t of record for $10,000, The or the these trial for the d e t e r m i n a t i o n t h a t t h i s c o s t s h o u l d be s h a r e d e q u a l l y by t h e parties. remand for We reverse further t h i s p a r t of findings a s t o t h e c o u r t ' s judgment a n d t h e exact value of r e p a i r s f o r which t h e t e n a n t may r e c o v e r . the A b s e n t an a g r e e m e n t t o t h e c o n t r a r y , is rule the lessor h a s no d u t y t o repair. Here t h e r e i s an agreement t o r e p a i r supra. the that t h e common l a w lease agreement, and when the Solich, contained in elected to landlords r e p a i r and r e s t o r e t h e p r e m i s e s , t h e y became bound by t h i s agreement necessary to make the repairs premises t o a tenantable condition. do t h i s , to restore the The l a n d l o r d s f a i l e d t o and t h e t e n a n t was c o m p e l l e d t o c o m p l e t e t h e work. Under t h e a g r e e m e n t , t h e l a n d l o r d s a r e l i a b l e f o r t h e c o s t s i n c u r r e d by t h e t e n a n t i n c o m p l e t i n g t h e r e p a i r s t h a t w e r e the landlords' duty t o provide. THE TENANT I S ENTITLED TO ATTORNEY FEES INCURRED I N ENFORCING THE LEASF AGEEE?IZ1JT AiJD ATTORNEYS FZES ' FORECLOSING THE MECHANICS L I E N I n i t s o r i g i n a l f i n d i n g s o f f a c t and c o n c l u s i o n s o f law, t h e t r i a l c o u r t h e l d t h a t (1) t h e t e n a n t was e n t i t l e d 43 t o a t t o r n e y f e e s p u r s u a n t t o s e c t i o n .83-8601.1, 1947, R.C.M. f o r e n f o r c i n g t h e c o v e n a n t s o f t h e l e a s e , and ( 2 ) t h a t t h e l a n d l o r d s w e r e e n t i t l e d , u n d e r s e c t i o n 93-8614, (now s e c t i o n 71-3-124, defending 93-8614, against R.C.M. MCA), t h a t each p a r t y bear 1947 t o recover reasonable c o s t s of t h e mechanics' 1947. R.C.M. l i e n pursuant But l a t e r , the to section t r i a l court ordered i t s own c o s t s and a t t o r n e y f e e s . W e reverse t h i s order. The tenant is e n t i t l e d t o the reasonable c o s t s of a t t o r n e y f e e s i n c u r r e d i n e s t a b l i s h i n g t h e v a l i d i t y of lease. his By d e m a n d i n g , u n j u s t i f i a b l y , a d r a s t i c a l l y i n c r e a s e d r e n t a l payment f r o m t h e t e n a n t and by t a k i n g l e q a l a c t i o n t o f o r c e t h e tenant t o q u i t the premises, the landlords refused t o recognize t h e e x i s t e n c e of the lease. The t e n a n t was forced t o sue to determine s e c t i o n 28-3-704, MCA, t h e v a l i d i t y of the lease, and p r o v i d e s t h a t t h e t e n a n t is e n t i t l e d t o attorney fees so incurred. B e c a u s e t h e o r i g i n a l l e a s e a g r e e m e n t was e n t e r e d i n t o before the 28-3-704, "effective date" (July s t a t u t e does not apply here. Bank v. Swainson (1978), See Belgrade 176 Mont. 444, 578 P.2d S w a i n s o n ( 1 9 7 7 ) , 1 7 2 Mont. the agreement at is t h e issue date l e a s e a g r e e m e n t was r e n e w e d , March 3 , 1 9 7 3 . then State 1166; 350, B u t w e need n o t r e c o n s i d e r t h a t i s s u e h e r e . 174. d a t e of section Undoubtedly c o n f u s i o n e x i s t s "effective date" provision. B e l g r a d e S t a t e Bank v . P.2d of counsel for the landlords contends t h a t t h i s MCA, a s t o the 1971) 1, in effect. Because t h e on which 564 The the The s t a t u t e was l a n d l o r d s have asserted that t h e t e n a n t d i d n o t p r o p e r l y e x e r c i s e h i s o p t i o n t o renew t h e lease, the tenant was v a l i d i t y of h i s o p t i o n . have p r e v i o u s l y r e j e c t e d forced to sue to S e c t i o n 28-3-704, the landlords' establish MCA, applies. the We argument t h a t t h i s s t a t u t e d o e s n o t a p p l y t o a p a r t y who s t a r t e d t h e l a w s u i t . Compton v . A l c o r n ( 1 9 7 6 ) , 1 7 1 Mont. 230, 235, 557 P.2d 2 9 2 . Because mechanics' we have ruled that the t e n a n t had a valid lien, the landlords are not entitled t o attorney Rather, the tenant is f e e s f o r d e f e a t i n g a mechanics' l i e n . entitled to establishing attorney the s e c t i o n 71-3-124, The record fees validity for of the costs incurred the mechanics' establish the lien. in See MCA. does not exact amount of a t t o r n e y f e e s i n c u r r e d by t h e t e n a n t and t h e r e f o r e we m u s t remand amount. for further The t e n a n t proceedings to establish is e n t i t l e d t o recover the proper the reasonable attorney fees incurred in establishing the validity of the lease and in foreclosing on his mechanics' lien. This includes also the attorney fees incurred in presenting this appeal. The District Court judgment is af firmed in reversed in part, and remanded for further proceedings. We concur: ?a h& ,. % ) - Chief '3ustice part,

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