Sullivan v. Cherewick , 386 Mont. 350 ( 2017 )


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  •                                                                                           02/28/2017
    DA 16-0289
    Case Number: DA 16-0289
    IN THE SUPREME COURT OF THE STATE OF MONTANA
    
    2017 MT 38
    MICHAEL SULLIVAN; JOY W. HUNT; DR. HERSCHEL R.
    and MARY BETH HARTER,
    Plaintiffs,
    v.
    THOMAS CHEREWICK and RONALD M. HENRY,
    Defendants.
    RONALD M. HENRY, Counterclaim Plaintiff, and
    WESTERN INVESTMENTS, INC., Third-Party Plaintiff,
    Counterclaim Plaintiffs and Appellants,
    v.
    MICHAEL SULLIVAN; JOY W. HUNT; DR. HERSCHEL R.
    and MARY BETH HARTER,
    Counterclaim Defendants and Appellees.
    APPEAL FROM:        District Court of the Twenty-Second Judicial District,
    In and For the County of Carbon, Cause No. DV 11-122
    Honorable Blair Jones, Presiding Judge
    COUNSEL OF RECORD:
    For Appellants:
    Paula Saye, Saye Law, Absarokee, Montana
    (for Ronald M. Henry and Western Investments, Inc.)
    T. Thomas Singer, Frederick P. Landers, Axilon Law Group, PLLC,
    Billings, Montana (for Thomas Cherewick and Ronald M. Henry)
    For Appellees:
    Michael B. Anderson, Anderson & Liechty, P.C., Billings, Montana
    (for Dr. Herschel R. and Mary Beth Harter)
    Brendon J. Rohan, Poore, Roth & Robinson, P.C., Butte, Montana
    (for Michael Sullivan)
    John F. (Jack) Jenks, J. Wayne Capp, Capp & Jenks, P.C., Missoula,
    Montana (for Michael Sullivan, Joy W. Hunt, Dr. Herschel R. and
    Mary Beth Harter)
    Paul N. Tranel, Katie C. Guffin, Bohyer, Erickson, Beaudette & Tranel,
    P.C., Missoula, Montana (for Joy W. Hunt)
    Submitted on Briefs: January 11, 2017
    Decided: February 28, 2017
    Filed:
    __________________________________________
    Clerk
    2
    Justice Beth Baker delivered the Opinion of the Court.
    ¶1     The parties have been engaged for years in a contentious dispute regarding the
    management of a real estate development in which they all owned property.                The
    Plaintiffs sued to restrain Thomas Cherewick and Ronald Henry from actions that
    Plaintiffs alleged were unauthorized or exceeded their authority as directors and officers
    of the development’s property owners’ association.1 Henry and his company, Western
    Investments, Inc., counterclaimed, alleging that Landowners had conspired to interfere
    with his business. The District Court granted summary judgment against all parties on
    their respective claims. It entered a final judgment, declining to award attorney fees and
    costs to Henry and Cherewick. There are two issues on appeal:
    1. Whether the District Court erred in granting Landowners summary judgment
    on Henry’s and Western Investments’ counterclaims for conspiracy and other
    alleged tortious conduct;
    2. Whether the District Court abused its discretion in denying Henry’s and
    Cherewick’s motion for attorney fees after they prevailed on the Plaintiff’s claims
    against them.
    ¶2     We affirm.
    PROCEDURAL AND FACTUAL BACKGROUND
    ¶3     This case has a contentious history, consuming nearly five years in litigation, with
    almost 600 documents in the District Court record, five separate summary judgment
    orders, and eleven briefs from various arrangements of parties covering two distinct
    claims on appeal. The District Court described it as “a muddled and chaotic case . . . [in
    1
    The Plaintiffs remaining in the action are Appellees Michael Sullivan, Joy Hunt, Dr. Herschel
    Harter, and Mary Beth Harter. We refer to the Appellees collectively as Landowners.
    3
    which] neither Plaintiffs nor Defendants substantially prevailed on any of the asserted
    claims and counterclaims.”
    ¶4     Henry, Cherewick, and Landowners all owned property in Remington Ranch—a
    real estate development comprising several subdivisions outside of Red Lodge, Montana.
    Henry developed much of Remington Ranch through his company Western Investments.
    Western Investments owned numerous lots in Remington Ranch. Western Investments
    purchased Dr. Herschel and Mary Beth Harters’ interest in a tract of land in one of the
    subdivisions. In exchange, Western Investments gave the Harters a promissory note for
    $750,000. After Western Investments failed to make any payments on the note, the
    Harters filed a UCC-1 Financing Statement and vendor’s lien on certain lots that Western
    Investments was trying to sell.
    ¶5     The Remington Ranch Association (Association) is an “umbrella” property
    owners’ association.    It is responsible for maintenance of the common areas of the
    subdivisions that make up Remington Ranch. While each individual subdivision within
    Remington Ranch has its own declaration of covenants, conditions, and restrictions, the
    Association also has its own declaration of covenants, conditions, and restrictions.
    Landowners are all members of the Association, and Henry and Cherewick were
    directors and officers of the Association.
    ¶6     The breaking point in a longstanding period of discord between the parties came
    when Henry announced that he was going to try to develop part of the property as a
    resort. Landowners reacted to Henry’s announcement by organizing and discussing their
    4
    options for preventing commercial development. Ultimately, Landowners—along with
    about twenty other Remington Ranch property owners—filed a complaint against
    Cherewick, Henry, the Association, and Association director Nancy Gammill.2
    Landowners challenged the Association’s authority over the affairs of Remington
    Ranch’s component subdivisions. Landowners also claimed that Henry and Cherewick
    took actions that were either unauthorized or exceeded their authority as directors.
    ¶7     Henry and Western Investments brought several counterclaims against
    Landowners, including defamation, tortious interference with business relations and
    prospective economic opportunity, negligent or intentional infliction of emotional
    distress, slander of title, abuse of process, and civil conspiracy. The basic premise of the
    counterclaims was that Landowners colluded to drive Henry into bankruptcy, to stop his
    planned commercial development of the site, and to ruin his reputation in the community.
    Henry and Western Investments also sought punitive damages.
    ¶8     Over the course of nearly five years, the parties engaged in extensive discovery
    and litigated their various claims and counterclaims through dozens of motions. In the
    end, the District Court entered summary judgment orders granting judgment to Henry and
    Cherewick on Landowners’ claims.           The court also granted Landowners summary
    judgment on Henry’s and Western Investments’ counterclaims because it concluded that
    Henry and Western Investments failed to produce evidence establishing each of the
    elements of the counterclaims.       Finally, the court denied Henry’s and Cherewick’s
    2
    The Association, Gammill, and all plaintiffs except for Landowners were dismissed for various
    reasons during the course of litigation.
    5
    motion for attorney fees and costs on Landowners’ claims because it determined that they
    were not a prevailing party. Henry and Cherewick appeal the court’s refusal to award
    attorney fees; Henry and Western Investments appeal the dismissal of their
    counterclaims.
    STANDARDS OF REVIEW
    ¶9     We review summary judgment rulings de novo, applying the standards set forth in
    M. R. Civ. P. 56(c)(3). Bird v. Cascade Cnty., 
    2016 MT 345
    , ¶ 9, 
    386 Mont. 69
    ,
    
    386 P.3d 602
    . Summary judgment is appropriate when the moving party demonstrates
    both the absence of any genuine issues of material fact and entitlement to judgment as a
    matter of law. M. R. Civ. P. 56(c)(3); Bird, ¶ 9. Once the moving party has met its
    burden, the opposing party must present material and substantial evidence to raise a
    genuine issue of material fact. Bird, ¶ 9. We will draw all reasonable inferences from the
    offered evidence in favor of the party opposing summary judgment; but conclusory
    statements, speculative assertions, and mere denials are insufficient to defeat a motion for
    summary judgment. Bird, ¶ 9. We review a district court’s conclusions of law to
    determine whether they are correct. Bird, ¶ 9.
    ¶10    We review a district court’s conclusion regarding the existence of legal authority
    to award attorney fees for correctness. City of Helena v. Svee, 
    2014 MT 311
    , ¶ 7,
    
    377 Mont. 158
    , 
    339 P.3d 32
    . If legal authority exists, we review a district court’s order
    granting or denying attorney fees for abuse of discretion. Svee, ¶ 7. We review a district
    court’s determination of “prevailing” or “losing” parties for abuse of discretion as well.
    6
    Whipps, L.L.C. v. Kaufman, Vidal, Hileman, & Ramlow, P.C., 
    2007 MT 66
    , ¶ 6, 
    336 Mont. 386
    , 
    156 P.3d 11
    . A district court abuses its discretion when it acts arbitrarily,
    without employment of conscientious judgment, or in excess of the bounds of reason
    resulting in substantial injustice. Whipps, L.L.C., ¶ 6.
    DISCUSSION
    ¶11 1. Whether the District Court erred in granting Landowners summary judgment
    on Henry’s and Western Investments’ counterclaims for conspiracy and other alleged
    tortious conduct.
    ¶12    Henry and Western Investments asserted the following counterclaims against
    Landowners: abuse of process, defamation, negligent or intentional infliction of
    emotional distress, conspiracy, slander of title, and tortious interference; they also sought
    punitive damages. While the court granted Landowners summary judgment on all of the
    counterclaims, Henry and Western Investments address only a few explicitly on appeal.
    We briefly address each claim.
    I.    Abuse of process, defamation, and negligent or intentional infliction of
    emotional distress claims.
    ¶13    The District Court first concluded that Henry and Western Investments abandoned
    their claims of abuse of process and defamation because they did not include any
    argument regarding those claims in their briefing to the court; therefore, the court granted
    Landowners summary judgment on those claims.               With regard to the negligent or
    intentional infliction of emotional distress claim, the District Court noted that Western
    Investments, as an entity, could not sustain such a claim. The court noted further that
    Henry’s arguments contained no discussion of the factual or legal basis for the emotional
    7
    distress claim against Landowners. After determining that the record did not contain any
    evidence that Landowners caused Henry any emotional distress, the District Court
    granted Landowners summary judgment.
    ¶14    On appeal, Henry and Western Investments do not contest the District Court’s
    conclusion that they abandoned their abuse of process and defamation claims. Nor do
    they offer any arguments regarding the court’s conclusion as to their negligent or
    intentional infliction of emotional distress claim. It is not our responsibility “to develop
    legal analysis that might support a party’s position.” State v. Gunderson, 
    2010 MT 166
    ,
    ¶ 12, 
    357 Mont. 142
    , 
    237 P.3d 74
    . Accordingly, we conclude that the District Court
    correctly granted Landowners summary judgment on Henry’s and Western Investments’
    abuse of process, defamation, and negligent or intentional infliction of emotional distress
    counterclaims.
    II.   Conspiracy, slander of title, tortious interference, and punitive damages
    claims.
    ¶15    Henry’s and Western Investments’ conspiracy claim alleged that the Harters
    conspired with the other Remington Ranch property owners to stop Henry’s planned
    development, force him into bankruptcy, and ruin his business relationships in the
    community. In addressing the civil conspiracy claim, the court recognized that Henry’s
    and Western Investments’ “various theories of liability are generally centered on only a
    few overt actions taken by the Harters. They allege that the Harters’ overt acts—and any
    liability tied to these acts—should be imputed to all other remaining counterclaim
    defendants.” In an effort to simplify the analysis of the remaining claims, the court chose
    8
    to “first discuss whether the record contains any evidence of a conspiracy between the
    remaining counterclaim defendants that would allow the Court to impute the actions of
    the counterclaim defendants to one another.”
    ¶16   The court noted Henry’s and Western Investments’ claim that the evidence
    supported a finding that there was a conspiracy between Landowners to stop the resort’s
    construction at Remington Ranch. The court determined that such an assertion alone,
    however, “does not assert a claim for civil conspiracy even if true” because there is
    “nothing inherently unlawful about protesting a resort planned to be built in a
    complainant’s backyard.” Instead, the court concluded, in order to prevail on their claim
    of civil conspiracy, Henry and Western Investments would have to prove that
    Landowners “had a ‘meeting of the minds’ to use unlawful means in pursuit of their
    otherwise lawful goal of stopping the development of the resort.”
    ¶17   The court recognized Henry’s and Western Investments’ assertion that the
    “unlawful means” Landowners used to stop the resort were the Harters’ filings. The
    court acknowledged that the evidence demonstrated Landowners’ opposition to the
    resort’s construction; it determined, however, that the evidence did “not support an
    inference that [Landowners] agreed to use unlawful means to stop the development of the
    Remington Resort or that the other counterclaim defendants even knew about the Harters’
    filings.” Thus, the court held that Henry’s and Western Investments’ claim of conspiracy
    was nothing more than “mere speculation, insufficient to survive summary judgment.”
    9
    ¶18   The court’s determination regarding the conspiracy claim framed its analysis of
    the remaining claims. Henry’s and Western Investments’ additional claims centered on
    the Harters’ filings. Because the court concluded that there was no conspiracy between
    Landowners, the court determined that the Harters’ conduct was not attributable to Hunt
    or Sullivan. Based in large part on that determination, the court concluded that Henry
    and Western Investments had failed to make a prima facie case for the remaining claims
    against Hunt and Sullivan and therefore granted them summary judgment. Because the
    Harters filed the liens, the District Court analyzed in more depth the remaining claims
    against them.
    ¶19   In addressing Henry’s and Western Investments’ claim that the Harters’ filings
    constituted slander of title, the court first noted that the relevant tracts of land were
    owned solely by Western Investments. Thus, the court concluded that Henry did not
    have a claim for slander of title. The court focused its analysis of Western Investments’
    claim on two elements—whether the Harters acted with malice and whether the Harters’
    actions caused Western Investments any special damages. The court determined that
    there were unresolved fact issues regarding whether the Harters acted with malice, but it
    concluded that Western Investments’ slander of title claim must fail “for lack of provable
    damages.” The court noted that there was no evidence demonstrating that the Harters’
    filings prevented any sale of lots by Western Investments. Because Western Investments
    had not presented a prima facie slander of title claim, the court granted the Harters
    summary judgment on the claim.
    10
    ¶20    Similarly, the District Court determined that Henry and Western Investments had
    failed to present a prima facie claim of tortious interference. Henry’s and Western
    Investments’ tortious interference claim alleged that the Harters interfered with their
    efforts to develop the resort. The court opined:
    Given that Henry did not own . . . the land upon which the Resort was to be
    located[ ], that the owner of [the land] had not taken any steps nor shown
    any affirmative interest in developing [the land] into the Remington Resort,
    and that Henry had no financing in place to develop the Resort, [Henry’s
    and Western Investments’] assertion that it was the Harters who caused the
    Resort’s failure lacks evidentiary foundation and is speculative.
    Thus, the court granted the Harters summary judgment on the tortious interference claim.
    ¶21    Lastly, the court held that Henry’s and Western Investments’ claim for punitive
    damages must fail “[g]iven a lack of any underlying liability against the Harters.” Before
    finishing its order, the court noted that the parties “have a great deal of animosity toward
    one another.” The court reiterated that in order for the alleged claims “to proceed to trial,
    it was incumbent on Henry and Western Investments to provide the Court with at least
    some admissible evidence as to each of the elements of their counterclaims. But after
    more than four years of litigation, this evidence either does not exist or has not been
    produced.” Accordingly, the District Court granted Landowners summary judgment in
    all respects.
    ¶22    Henry and Western Investments argue generally that the District Court’s
    conclusions on their counterclaims simply adopt Landowners’ position instead of
    considering all of the conflicting evidence submitted by Henry and Western Investments.
    They assert that they presented substantial evidence that the Harters’ purpose in making
    11
    the filings was to interfere with Henry’s business by stopping the sale of the lots. They
    stress that a jury also could reasonably infer malice from the Harters’ filing the liens
    because they allege that the Harters had knowledge that the liens would interfere with
    pending sales of the encumbered lots. And selling those lots was Henry’s only means of
    generating income to meet his financial obligations.
    ¶23    Henry and Western Investments assert further that the court erred by concluding
    that the other claims were tied to their theory of conspiracy. They claim that they
    asserted “multiple stand-alone counts.” As to their civil conspiracy claim, Henry and
    Western Investments contend that the object of the conspiracy was to tortiously interfere
    with Henry’s business and that the unlawful objective was the slander of title. Henry and
    Western Investments contend that the District Court erred because it is the function of the
    jury to determine whether there was a meeting of the minds, whether Landowners
    engaged in an unlawful overt act, and whether damages resulted because of Landowners’
    conduct.
    ¶24    A valid civil conspiracy claim requires that each of the following elements be
    established: “(1) two or more persons . . .; (2) an object to be accomplished; (3) a
    meeting of the minds on the object or course of action; (4) one or more unlawful overt
    acts; and (5) damages as the proximate result thereof.” Schumacker v. Meridian Oil Co.,
    
    1998 MT 79
    , ¶ 18, 
    288 Mont. 217
    , 
    956 P.2d 1370
     (citing Simmons Oil Corp. v. Holly
    Corp., 
    258 Mont. 79
    , 91, 
    852 P.2d 523
    , 530 (1993)).
    12
    ¶25    Here, the first two elements are clearly met. Landowners are a group of two or
    more persons and the object they sought to accomplish was preventing the construction
    of a resort at Remington Ranch. Contrary to the District Court’s conclusion, the third
    element does not require “a ‘meeting of the minds’ to use unlawful means”; rather, the
    third element requires either a meeting of the minds on the object to be accomplished or a
    meeting of the minds on the course of action. Schumacker, ¶ 18. As the District Court
    recognized, the “evidence certainly indicates that the Harters, Sullivan, Hunt, and others
    did not want the Remington Resort to come to fruition . . . and that they agreed action
    should be taken to stop the development of the Resort.” Accordingly, there was a
    meeting of the minds as to the object to be accomplished and element three is therefore
    met as well.
    ¶26    The fourth civil conspiracy element requires “one or more unlawful overt acts.”
    Schumacker, ¶ 18. It is the unlawful act—and not the conspiracy itself—that gives rise to
    a civil conspiracy cause of action. Schumacker, ¶ 18. Henry and Western Investments
    assert that the Harters’ filing of the allegedly false UCC-1 and vendor’s lien is the
    “unlawful act” because the filings constitute slander of title.
    ¶27    Slander of title occurs when “one maliciously publishes false matter which brings
    in question or disparages the title to property, thereby causing special damage to the
    owner.” Pryor v. Babcock Bldg. Corp., 
    2002 MT 68
    , ¶ 10, 
    309 Mont. 222
    , 
    45 P.3d 35
    (citations and internal quotations omitted). Although the District Court acknowledged
    that there may be a genuine issue of material fact regarding whether the Harters acted
    13
    with malice in filing the liens, it concluded that Henry and Western Investments failed to
    establish that they suffered any damages as a result of the liens.
    ¶28    Henry asserts that he suffered “damages in the hundreds of thousands of dollars”
    due to the Harters’ filing of the allegedly false liens. He contends that the damages
    resulted when he was unable to sell the lots with the liens attached. Henry further alleges
    that he suffered damages because he incurred attorney fees and other costs in removing
    the liens.
    ¶29    The District Court determined, and we agree, that Henry and Western Investments
    failed to establish a triable factual issue that the Harters’ filing of the liens caused them
    damages. As the District Court noted, the affidavits of the potential buyers of the lots—
    on which Henry and Western Investments relied to show damages—“contradict the
    notion that the Harters’ filings prevented any lot sales.” The affidavits of both potential
    buyers demonstrate that neither buyer had reached an agreement with Henry or Western
    Investments regarding the purchase of the lots. Further, neither of the potential buyers
    referenced the liens as the reason they did not buy the properties; rather, they both stated
    that, if anything, their decisions were affected by the animosity between Remington
    Ranch property owners and Henry.
    ¶30    Additionally, there were three other encumbrances totaling nearly two million
    dollars on the properties at issue. As the District Court observed, Henry and Western
    Investments presented “no argument or evidence” that they sought a release or removal
    of all of those encumbrances.       Henry and Western Investments therefore failed to
    14
    demonstrate how title to the property was marketable. Finally, as the District Court
    emphasized, Henry “admitted he was not selling property in Remington Ranch during the
    time period the Harters filed their liens.” In an October 2012 letter to a real estate
    company, Henry stated:
    Here are some facts. I closed my RE/MAX office in Red Lodge, Montana
    December 31, 2010. I have not had any “real estate services” nor have I
    provided any since that date. I do own property in the area but my
    properties have not been listed for sale nor have I tried to market any of my
    properties since the closing of my RE/MAX offices.
    In the face of all of this evidence, Henry and Western Investments did not come forward
    with specific evidence, as opposed to speculation and argument, that the liens caused
    them damage.
    ¶31    Because Henry and Western Investments failed to present material and substantial
    evidence sufficient to raise an issue of material fact regarding whether they suffered
    damages, the District Court correctly concluded that their slander of title claim failed as a
    matter of law. Henry and Western Investments’ civil conspiracy claim consequently fails
    as well because they have not established both that Landowners committed an unlawful
    act and that they suffered damages as the proximate result thereof. Accordingly, albeit
    for slightly different reasons, the District Court correctly granted Landowners summary
    judgment on Henry’s and Western Investments’ civil conspiracy claim.
    ¶32    We also are unpersuaded by Henry’s and Western Investments’ contentions
    regarding their tortious interference claim. Similar to civil conspiracy and slander of
    title, in order to assert a prima facie claim of tortious interference, Henry and Western
    15
    Investments must prove that “actual damages and loss resulted” as a consequence of the
    alleged conduct. Hughes v. Lynch, 
    2007 MT 177
    , ¶ 25, 
    338 Mont. 214
    , 
    164 P.3d 913
    .
    Though Henry and Western Investments contend that whether Landowners’ “agreement
    to stop the development of the resort constitutes a tortious interference with their business
    is a question of fact for the jury,” they have again offered only conclusory statements and
    speculative assertions that they suffered damages as a result thereof. Accordingly, we
    conclude that the District Court correctly granted Landowners summary judgment on
    Henry’s and Western Investments’ tortious interference claim.
    ¶33    Finally, given our conclusions on Henry’s and Western Investments’ underlying
    counterclaims, we affirm the District Court’s grant of summary judgment to Landowners
    on the punitive damages claim. See Finstad v. W. R. Grace & Co.-Conn., 
    2000 MT 228
    ,
    ¶ 20, 
    301 Mont. 240
    , 
    8 P.3d 778
     (“[P]unitive damages are merely a component of
    recovery of the underlying civil cause of action.”).        Although Henry and Western
    Investments make additional arguments, we conclude that the contentions discussed
    above are dispositive. Based on the foregoing analysis, we hold that the District Court
    correctly granted Landowners summary judgment on each of Henry’s and Western
    Investments’ counterclaims.
    ¶34 2. Whether the District Court abused its discretion in denying Henry’s and
    Cherewick’s motion for attorney fees after they prevailed on the Plaintiff’s claims against
    them.
    ¶35    In a concise order, the District Court concluded that Henry and Cherewick were
    not prevailing parties on the claims Landowners brought in their initial complaint. The
    16
    court therefore determined that Henry and Cherewick were not entitled to an award of
    attorney fees and costs. In addition, the District Court concluded, “having presided over
    this case for four years and understanding well the circumstances of this case and the
    respective positions of the parties, in an exercise of its inherent equitable powers, the
    Court concludes that equity does not support an award of attorney fees and costs to any
    party.”
    ¶36       Henry and Cherewick assert that they are entitled to attorney fees and costs
    because they prevailed on all of Landowners’ claims against them—evidenced by the
    District Court’s grant of summary judgment in their favor on those claims. Henry and
    Cherewick invoke the Association’s declarations, as well as the declarations of each of
    Remington Ranch’s component subdivisions, arguing that Landowners’ claims asserted
    violations of the various declarations. Henry and Cherewick point out that Landowners’
    claims are the only claims in the case subject to the various declarations’ fee provisions.
    Thus, they contend that as prevailing parties on these claims, they should have been
    awarded attorney fees and costs, and that the District Court erroneously took into account
    Henry’s lack of success on his counterclaims.
    ¶37       Henry and Cherewick argue alternatively that the District Court erred by not
    considering whether they should be awarded attorney fees and costs under § 35-2-1306,
    MCA. They assert that Landowners’ claims were derivative claims and that the District
    Court concluded that Landowners failed to meet the standing and procedural
    requirements of § 35-2-1301, MCA. Henry and Cherewick thus assert that Landowners
    17
    commenced and maintained their derivative claims without reasonable cause and they
    were accordingly entitled to attorney fees pursuant to the statute.
    ¶38    The general rule is that “attorney fees will not be awarded to the prevailing party
    in a lawsuit” absent statutory or contractual authority.      Svee, ¶ 18.   As Henry and
    Cherewick correctly point out, Landowners asserted claims under the various
    declarations and those declarations provide contractual authority for awarding the
    prevailing party attorney fees and costs. There is no “prevailing party,” however, where
    both sides “gain a victory but also suffer a loss.” Whipps, ¶ 9 (citing H-D Irrigating, Inc.
    v. Kimble Props., Inc., 
    2000 MT 212
    , ¶ 60, 
    301 Mont. 34
    , 
    8 P.3d 95
    ).
    ¶39    Focusing exclusively on Landowners’ claims against Henry and Cherewick, we
    find no abuse of discretion in the District Court’s conclusion that both sides gained a
    victory but also suffered a loss.      During the course of the litigation, Landowners
    succeeded on several claims, mainly: securing a court-supervised election of new
    directors for the Association; persuading the court to appoint a receiver to manage the
    transition from the old board of directors to the new board; and obtaining an inspection of
    the Association’s books and records. Henry and Cherewick obviously prevailed as well
    because at the end of the litigation they were granted summary judgment on Landowners’
    claims. The District Court therefore did not act arbitrarily in concluding that neither side
    could claim prevailing party status.
    ¶40    Finally, Henry’s and Cherewick’s arguments under § 35-2-1306, MCA, are
    misplaced. Even if Landowners’ action constituted a derivative action, § 35-2-1306,
    18
    MCA, simply gives the court the option of awarding attorney fees and costs; the statute
    does not require the court to award attorney fees.        Section 35-2-1306, MCA (“On
    termination of the derivative proceeding, the court may order . . . the complainant to pay
    any defendant’s reasonable expenses, including attorney fees . . . .”).
    ¶41    The District Court presided over this contentious, complicated case for nearly five
    years. The court understood the circumstances and the parties’ positions well. We
    conclude that the District Court did not commit legal error or abuse its discretion in
    denying Henry’s and Cherewick’s motion for attorney fees.
    CONCLUSION
    ¶42    The District Court’s judgment is affirmed in all respects.
    /S/ BETH BAKER
    We concur:
    /S/ MIKE McGRATH
    /S/ LAURIE McKINNON
    /S/ MICHAEL E WHEAT
    /S/ JAMES JEREMIAH SHEA
    19
    

Document Info

Docket Number: DA 16-0289

Citation Numbers: 2017 MT 38, 386 Mont. 350, 391 P.3d 62, 2017 WL 772731, 2017 Mont. LEXIS 186

Judges: Baker, McGrath, McKinnon, Wheat, Shea

Filed Date: 2/28/2017

Precedential Status: Precedential

Modified Date: 11/11/2024