Association of Unit Owners of Deer Lodge Condominium, Inc. v. Big Sky of Montana, Inc.

Decision Date08 May 1990
Docket NumberNo. 89-502,89-502
Citation790 P.2d 967,242 Mont. 358
PartiesThe ASSOCIATION OF UNIT OWNERS OF DEER LODGE CONDOMINIUM, INC., a Montana corporation, Plaintiffs, Appellants and Respondents, and the Board of Directors of the Association of Unit Owners of Deer Lodge Condominium, Inc., Plaintiff and Respondent, v. BIG SKY OF MONTANA, INC., et al., Defendants. Appeal of PAGE WELLCOME, P.S.C., a nonparty affected by the determination in the District Court.
CourtMontana Supreme Court

Page Wellcome, Wellcome, Frost & Bartlett, Bozeman, pro se.

Max Hansen, Dillon, for appellant.

J. Robert Planalp, Landoe, Brown, Planalp & Kommers, Bozeman, Michael J. Lilly, Bozeman, Patrick G. Frank, Missoula, for respondents.

WEBER, Justice.

This class action was the subject of an approved settlement on July 18, 1988, by the District Court for the Fifth Judicial District, Madison County. After a hearing on August 5, 1988, the District Court made its Order fixing attorney fees. Upon motion by the Association of Unit Owners of Deer Lodge Condominium (Association) on June 1, 1989, the District Court reduced the original award of attorney fees. Page Wellcome appeals such reduction in his fees. We affirm.

The sole issue for our consideration is whether the District Court erred in reducing Mr. Wellcome's attorney fees.

This case was previously before this Court when it was ordered to proceed as a class action with the Association and its Board of Directors acting as representatives. See State ex rel. Boyne USA, Inc. v. District Court (1987), 228 Mont. 314, 742 P.2d 464. After an adjustment by the District Court, the plaintiffs' Class received, by way of cash and other property, in excess of six million dollars. A series of settlement hearings were held on the Boyne case culminating in an August 5, 1988 hearing on the issue of attorney fees to be paid to Mr. Wellcome. Mr. Wellcome was represented by associates of his firm at the hearing.

On August 5, 1988, the District Court ordered attorney fees to be paid as follows:

[T]he attorneys will receive TWO HUNDRED THOUSAND [242 Mont. 360] AND 00/100 DOLLARS ($200,000.00) of the cash settlement proceeds from the initial cash payment. An additional sum of TWO HUNDRED THOUSAND AND 00/100 DOLLARS ($200,000.00) shall be paid from the first sale proceeds when the real property owned by the members of the class and the Deer Lodge Condominium Association or any part thereof is sold by the association. In addition to the foregoing the attorneys shall have an interest equal to TWENTY-FIVE PERCENT (25%) (one-fourth) of the sale price of the real property which percentage shall be applied to the sale price of all real property less the TWO HUNDRED (sic) AND 00/100 DOLLARS ($200,000.00) previously paid from the land sale proceeds. Such percentage amount shall then be reduced by any real estate commission paid on behalf of the association to a Montana licensed real estate agent in connection with such sale, the amount or percentage of which commission shall be agreed to (by the attorneys) prior to the real estate listing. If no licensed real estate agent is paid by the association then the TWENTY-FIVE PERCENT (25%) (one-fourth) of the land sale proceeds shall not be reduced and shall be paid in full to the attorneys.

In addition to the foregoing, the attorneys shall also receive the automobile credit attributable to the two (2) bedroom unit owned by the association.

The initial TWO HUNDRED THOUSAND AND 00/100 DOLLARS ($200,000.00) payment as hereinabove specified shall be paid to the attorneys for the class on August 12, 1988.

The balance of the attorneys' fees in the additional amount of TWO HUNDRED THOUSAND AND 00/100 DOLLARS ($200,000.00) together with the TWENTY-FIVE PERCENT (25%) (one-fourth) interest in the real property shall be paid to the attorneys when the land is sold and pending such sale the attorneys shall have a lien and charge against the real property owned by the Deer Lodge Condominium Association, and each and every condominium unit in the Deer Lodge Condominiums, in order to insure payment of such attorneys' fees as hereinabove specified....

In September 1988, Mr. Wellcome left the country for an extended world tour. Subsequently the Association obtained new counsel. On June 1, 1989, the Association, through the Board of Directors, filed a motion with the District Court asking it to reconsider its Order granting Page Wellcome in excess of $794,748.58 in attorney fees. The motion argued that the award violated Montana law and did not take into account a substantial amount of attorney fees and costs previously paid to Mr. Wellcome; that the award was based on the court's presumption that Mr. Wellcome would continue to represent the plaintiffs, when in fact, his representation was terminated; that notwithstanding the court's award, Mr. Wellcome's firm continued to charge on an hourly basis; and that the attorney fees were extreme in comparison to the benefits received by the Class members.

On June 30, 1989, after discovering that the record disclosed matters of which the Court was not previously aware, the Court entered its Order striking the contingent fee portion of the fee and reducing the cash balance still owing from $200,000 to $100,000. When Mr. Wellcome returned from his vacation, he pursued this non-party claim for his attorney fees. In its opinion and order on the Motion to Reassess, the District Court noted in its findings that the record before it disclosed matters of which it was not aware on August 5, 1988, including: (1) Mr. Wellcome had previously been paid $373,748.58 as fees and reimbursement of costs; (2) a previous attorney had been paid $135,000; (3) the value of the property received by the Class was not $1,000,000 as contemplated; but actually one-half of that sum; and (4) the court had not been advised of the existing law as to contingent fees in a class action. The court further noted that there was no evidence that these matters were misrepresented or withheld from the court. The court listed in its findings the attorney fees that had been paid to Mr. Wellcome as of June 13, 1989 as follows:

                Payment fees & costs through August 5, 1988  $226,948.11
                Payment of August 5, 1988                     200,000.00
                Payment by Safeco Insurance Company           146,800.47
                Credit for
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