Montana Fair Housing Inc. v. Barn , 2002 MT 353 ( 2002 )

No, i)2-3%')
IN Ti-it3S!IPli'F;'~l,IE COURT OF THE S'I-?TE OF l.?Ovl'.aN.i\
2002 V T 353
T
MONTANA FAIR HOUSING, INC.,
intervening Plaintiff and Appellal~i,
V. :,?
-n
:
LAVERN A N D DOLORES BARNES, dlbia
TARGET R'ANGE TRAILER COURT, and
DARRELL TRAVER, Agent,
Defendants and Respondents.
APPEAL. FROM: District Court ofthe Fourth Judicial District,
In and For the County of Missoula,
Honorable John W. Lauson, Judge Presiding
COL!YSLI OF RECORD
For Appellallt:
f lnlotby C Kelly, Piltorncy ai Law, E n i ~ g r a ~ ~ t ,
Montana
Mary Gallagher, Attorney at Lam, Missoula, hfoiltana
For Respondents
h21chacl Sol, Sol atid LVolfe. Mrssoula, Montaua
Charles K. Ikiil, Special Assislani Aiiomey Gelieral, hloi~tana
Fiu111an
Rights Commission, Helena, Morrtal~a
Submitted on Br~eis Seprcmhcr 5. 2002
Dcc~dcd. December 31. 2002
LV. Opinion of rh;: Court.
i~isiicc tViiliam Leaphart ciclivcrcd t11~
e: 1 t ,,~-i-cninii
1-1 , , ,aitit,fl'si~dAppellent~
1'1 :- ; appcziis thrcc
Montana f a i r Hiiusing; ine. (i4l'il).
orders oi'the Fourth Juiiicial District: one denying its request tor attorncy fees, onc denying
its motioii to vacate the Rule 08. M.R.Ci\-.P., offer ofjudgment, and one dismissing the case.
We reverse the District Court's denial of MFHis requcst for attorney fees, and remand the
rnatter for a determination of whether an award of discretionary attol-tieyfees is appropriate.
We affirm llie District Court's ruling regarding tile service pl-ovisions of Rule 3 a j .
M.R.Civ.P., as this issue Lvas raised fol- the first time on appeal.
'2 \1FH raises the follo\ving two issues on appeal:
ci3 1. in making a Rule 68 offer ofjjudgnient, must the defendant clearly indicate that
attorney fees are included in tlie offer i n order to effect a waiver of plaintiff's rights to
recover statutory fees under the blontani~Human Rights Act'?
74
1 2. Is an intervening plaintiff or a relator in a discrimination case brought by the State
pursuant to $40-2-5 10. MCA. of the Human Rights Act, entitleci to notice ctnder Rule 5(a),
M.R.Civ.P., of the final terms and conditions of a settlement agreement and stipulated
ciisnrissal bet~veen State and the defendants prior to entry o f a final ordcr dismissing the
the
case?
Background
ii5 M F H is a nonprofit Montana corporation whose primary purpose is to protect and
increase equal housing opportunities for persof~s
thruughcrut the State of 'uiontana. 111 Juac
1996; 'LIFH filed an admi``istrative
complaint with the Montana tluman Rights Commission
7
--
(1-ifZCj, a state agency. 'fhe complaint allegecd that Kcspondcnis; Lavern and Doiorcs iiarircs
anci Urrrreil 'I rcvcir jthc Barr~cscs), arid
owi~eis opcraioc-s oftha: Tiirglir Riir~gc
7'r:iii:r C"c~urt
in "l;lissclii!a. had violared and \%-erevictlating Montana's Ff~i?nan
Kighrs Act by ijenyiiig equal
housirzg opportunities to persons based on familial status, age, and marital status.
76 After an administrative investigatio~iof the conrpiaint, the FIRC issued a final
investigative report, finding: (1) that MFH's allegations were supported by- substantial
evidence, and (2j that thcrc was reasonable cause to believe the Barnescs had violated state
fair housing laws. :1Aer its investigative finding anti an unsuccessful effort at conciliation,
the f-!KC issued notice prirsuant to 8 40-2-5 l ( i ( l ) , blC'A. that a contested case lrcaring would
be held on the MFI-I complaint, uniess any party elected to have thc iliattcr \?card in a civil
action. The Barneses elected to have the matter heard in district c o u ~ t .The HRC' thcn filed
the civil action in [his ease. ,4fontizll(i Huixnn Rights C'oiilnziisiorz, c.r rcl. h l ~ l ~ t uFoir i i
``
Cunipbcll (DV 90-88288). Ils. C'amphcll
ff(~z~.si``g~ndiVic.ole /I Lrriici-n in~iJi~olo~-c.sB``rnc.c
is a former resident of the Target Range Trailer Court who had also fjlcd a housing
ctiscritnination complaint against tlie Barncses. The HRC aiso found hcr discrimination
complaint was suppoi-tcd b j snbstantial evidence. Pursuant to 9 49-2-5 10(4)(a),kfCA, the
~
District Court granted MFFI and Campbell the right to intervene in the case as party-
plaintiffs.
77 MFfi au offer ofjiicigrncrit pursuant to
in Septcrnhcr 2000. the Rarneses serveci i~porl
Rule 68;M.K.('iv.i'. 'I-he offer stipulated thatjucigr??entwouid hc takcr~
agaiasrrl~c
i3atnescs
"pursuant to Rule 08 . . . in the arnount of 'f\tjo 'lhousanci Dollars (S2.OiiO) together with
3
cosrs only that accrued." I..atcr that morrth, CIFH filed an acccprarrcc? trd~isiilgii-iat it
acceprecd "'the offci. of[thi. Barncscs] . . . iorjudgrncnt in i;ic,or.of jMi;iil rtrrd cigrtiiist s.8' I
U '
~ I
dcfcndants on its clairiis in the above entitled case pursuant to defendanis' Offer. of
Judgmci~t."
"8
11 Pursuant to Rule judgment was entered against the Rarneses on the housing
discrimillation claitns. Following the entry of judgment, MFH moved for designation as a
prevailing party a t ~ d an award of attot-i~ey
fhr fees pursuant to the fee shifting pro~risions
of
the Hutnan Rights Act. The District Court denied the motion for fees and directed the
Bat-neses to pay HRC the amount offered to MFit in the of?;crofjudgment. As aresult, MFl-I
moved to vacate the offer ofjudgrnent on grounds that it had rtot accepted any offer whicli
waived the right to recover atlorney fees or. in the ahenlarive, to amend the judgment to
correctly reflect that MFH, not t l ~ e
HRC, was to bc paid the sums offered, with interest. The
District Court denied MFFl's motion to vacate: however, it granted the motion to amend the
judgn~ent reflect that MFti was the correct recipient of the sums offered.
to
9 '['he case proeeedect on the claims filed by the HRC on behalf of btFH and Can~pbell
dismissal between the I-(KCand the
as relators until, pursuant to a settlement and stip~ilated
Harneses, tile District Court entered a final order of dismissal. Neither thc Rxneses nor the
FiKC served notice oftheiv ntotion for stipulated disniissal on VIFH, and tire L3istricl Court's
itself w ,s not sen-ed on \ilFII until two and a half months later, at
fjnal order of disi~lissal -
MFi-1's r c , ttest.
,o
0 '1.1`` ltfter rcceiviilg a copy ofthe final ctrder dismissing thc case: "C1Fi-I iiied
di
iy ti
iiolicc o f appeal oi' the ilrst order dcr~ying t s reqlucst for attorney f - , second order
i e s the
: i e ~ i n g motion to vacate the Rule 68 offer of judgment, iiud rhc third order dismissing
its
thc case.
Discussion
I
-
31 1 in making a Rule 68 offer of judgment, must the defendant clearly indicate that
attorney fees are included in the offer in order to effect a waiver of plaintiffs rights to
izcover ststrrtory fees under the .Montana fluman Rights Act?
71 2 ofattonley fccs, under the Montana I-lurnairRights
We re\ icw a district court's der~irtl
Act, to detcnnine wl~ether cou~z
the abused its discretion. Sile La:iclert v. Nicirlmid C'OIIII~L.
Sket.iff'.s Iicpt.. 2001 MT 287, I' 12.307 Mmt. 403,' 12,38 f3.3d700, 1' 12. A district court
..
cibitses its discrction if its dcnial is based oil a11iinaccurate view of the la;^ or :
i finding offact
is clearly crroiieous. See Ln~iilcrt, 12; Il~lcr ('iri.sl:oiin,2000 M?'7 . 7 221.: 298 8 h n t . 2M4,
'j I,.
1' , 24, 095 P.2d 439. .j 24.
1 Whether a Rule 68 offer of juctgment must cxpiicitiy state that attorney fecs arc
inciudeci in order to effect a waiver of plaintifrs rights to recover stat~ttc>r>e s is matter of
k
first impression for this Court. MFI I argues that, as the prevailir!g party, it is entitled to scck
discretionary attorney fecs under three sections of the t-iuman Rights Act, namcly $ $ 49-2-
505j7). 49-2-509(6), and 40-2-5 !O(il), MCA, and that it did not wailvc i1.i right 10 scek t1lcse
fecs by accepting the Kule 68 offer ofjudgtncnt. 7hc District Court. in denying k1F;ii's
5
lriotiiili to seek attorney fees, concluded that the aiccptancc eftbe R~ilc offcr ~[judgrncnt
68
resoi\;cii a \ ) is-;ues [?er\vccrr tile parilcs.
.~ 93 under ihi:
incliiding a claim for riltornc! f i ~ c ' ;
iluman Rights Act.
"14. M F H maictaii~s the District C'orrr! rr-red i n concluding that in accepting the ilule
that
68 offer oofjudgmcnt, \vhich was silent as to the accepting party's uaik~cr the right to seck
of
attorney k e s , %iFH waived its right to seek a separate award of attorney fees. :MFf~I
argues
that such a waiver must be clearly and una~nbiguously out in an offer ofjndg:nent.
set
q 5 'Ihe basic purpose of Rule 68 is to encotsrage settlement and avoid protracted
litigation. See FVe.ston v. Kzlntr !1981)1 194 Mont. 52, 57. 635 F.2d 269. 272. :Is we noted
in li-i,sior~."/t]lre
rule also attempts to alleviate thc burden of subsequciitly accrued costs to
thc de'i'cndant by placing thert-i on a plaintiff who rclirscs to accept a gooci faith offer and
subsequently receives a jndgn-ient which is not greater than the offer." Ifiston, 104 blont.
at 57; 635 1'.2d at 272. In this casc, the y``cstion "What was the offcr?" CZFF~Jurges this
is:
Coiirt to conclude that the offer did not include a waiver of its right to seck attoniey fkes;
while the Barneses, naturally, argue the opposite.
'710 In support of its contention that the offer did not include a waiver, MFi-1 directs us to
thc holding in :Vic.so~i~ C'CII``IH
v. CZi)or/hunr,Inc. (9th C'ir. 1997); !22 F.3ci 830. in !l'li.som,
the Ninth Circuit COLLIX,.Xppeals ruled that "a itule 68 offer forjudgment ill a specific sum
of
together xvlih costs, wkich is silent as to attorney fecs, docs not preclude the plaintiff ti-orn
seeking fees ivlien thc underlying statute docs not iliakc attorney fees a part of the costs.'.
Xlr.~onl,122 F,3d at 835. The JVirsorncourt cortcludcd that, in a Rule 68 cjffer ofjiidgn~ent,
6
"any waikcr or limitation must be clear and unamhiguo``s" rcspccr to attonley kc.;.
wii!i
>.
:\iiSciiii. 7 - ..-aat 833,
' t ~-,
,-
1
" 7 MFH maintains tliat an ambiguous offer of.jud;r.nientmay spawn additional litigation;
thereby defeating the intended purposc ctf Rule 68. The casc at bar is a case in point.
Additionally, MFE-I argues that an anibiguous offer rnay put a corlrt in the unenviable position
of deciphering the intentions of the parties at the time they entered into the offer, again
increasing litigation. 'I'hc Bamcses, on the other hand, contend rhat MFtl's argument
attempts to rewrite Rule 68 and claims that LlFl~l'sacceptance letter was so "broad and all-
cncompassing" that the aeccpvance itself proscribes a request for attoriicy fees. These
assertions are ]lot supported by any casc law.
118 It is in the interests ofbotlr the offeror arid the offercc that a Rule 68 offer ofjudgment
must bc clear and unantbiguous, in order to effect a waiver of attorney fees. Today's ruling
minimizes litigatio~iover the offer of judgment itself. 12'hiic we hold that a waib-er of
must be clear and unambigrroits, tile offer itself
attorney fees in a Rule 68 offer oofj~ldgrnent
need not incluclc the words "attorney fees" to effect a waiver. We look to the decision of the
Seventh Circuit i l l ATorcihj.v. A~rchor
Fior.kiizg fJrrc.kogilzg( ' 0 . (7th Cir. IOO"), 199 F.3d 390,
which offers this trrcasured approach. In Vorn'!)~..Chicf Judge Post~erarfirrncd that
"anibiguities in fZule 68 offers are to be resolved against the offerors;" howevcr, hc rejected
the "magic-lvords approach . . . ill favor of an approach . . . that gives effect to an
t~narnbiguous fees explicitly." r\,'(jt-di?:,': ':(I9 F.3d
offer even if it does not mcr?tion atton~cys
at 303.
-.he offer ofjudgment in ,'L'or.cihl,provided "one total sum as to ali cotints of the
I
7
i:mcndcd inrnplaint." iVcirdi,i, 109 F.3d at 392. Rccat:se the oFkr was clear illat it inciuded
ail courrrs, including I couiir specifying attorney fees as part of the rciicTsoug,ri~l, cotirf
: tile
affiimed the Fedcral Ilistriet Court's denial ofthe accepting party's rig111in request attorney
fecs.
"1
19 In this case, thc Rarneses offcred MFI1 "T\vo Thousand Dollars jS2,000) together
with costs only aec~xed." The offer on its face includes costs. but it is not clear whether
attorney fecs are included. Attorney fees are not included as "costs geilcrally allewable."
See 5 25-1 0-201. MLZCA. 'The offer does not state that the sum to be paid is consideration for
'rhei-eforc, it is ambiguous \vhcthei-Mi'f-i. by acccpting thc offer,
the resolutioft ofall cour~ts.
waived its right to recover attorney fecs. Accordiilgly, we conclude that thc Barnescs' offer
ofjudgment did not include a waiver of attorney fees.
'20 Because the Rule 08 offer ofjudgment was not clear and unambiguous that h FH \\.as
f
wriaivi``g right to seek attorney fees, we hold that the District Court abused its discretion
its
in denying k1FF-l'~
request to seck attorney fees undcr the Human Rigl~ts
Act. 7-hcrcfore: we
reverse and remand the matter to the District Court for a determination of whether to award
MFH ciiscrctionary attorney fees undcr the Human Rights Act.
II
-
7\21 is an intcrvc~ling
plaintiff or a relator in a discrimination case brunglit by the State
pursuant to 5 4'4-2-51 0; 'L1C.X ofthe fluman Rights Act, entitled to ~loticc
under Rtllc 5(a),
M.R.C3iv.P,, of the final tenizs and co~lditiollsof a settlement agrccincnt and stipularccl
dismissal bcrwccn the Slarc arid the defcncianis prior to ciiery ctf a tiiitll order dismissing the
'$22 k t some point after MFH acccpted the Rule 68 offer of judgmenti the Rarxescs
er~tcred a settlement agreement wit11 FIRC, which stipulated to the dismissal ofthe case.
into
The final order of ciismissal was entered into on January 30,2002; however. MFtl was not
notificd of the settlement betlveen the HRC and the Bameses and the subsequent dismissal
of the case until two and a half months later. Therefore, MFH argues that it did not have an
agreement between FfRC and the
opportunity to review or oppose tlie executed settlcl~lerit
Bameses or the stipulated dismissal. MFH coritcrids that this lack of notice denied it its
fundanrental riglit to due process. Couseyucntly, hIFH asks this Court to vacate the final
order of dismissal and remand it to District Court for the purpose ofproviding notice to MFI-I
in accordance with the service provisions of Rule 5(a), bf.R.Civ.P. In turn, b1FH requests
that it be afforded the opportunity to object to the entry of a final order of dismissal.
7\23 MF1-1 received notice of the final order of dismissal on April 14, 2002. Rather than
MFk-1sliould have filed amotio~t
filing the subsequent notice ofappeal with this Co~lrt, with
the District Court so tliat the court could address the issue of lack of notice. As it stands,
though, MFH raisecl this issue for the first timc on appcal.
'21
1. I'hc gcncral l-ulc is tliat this Court will not address arr issue raised fi>rthe tirst timc on
appeal. Sce L'rrificd I/ztlusr~-ics,
Inc. 1.
. E(~siq,,
1908 M'f 1.15:' 15, 280 Viont. 255,'j !5,061
P.2d 100, fj 15; Diij: 1 Prrytlr (l996j, 28ii blont. 273,276,92WP.2d 864, SO!,.
:
. "The basis for
the general rule is that 'it is fundamentally unfair to fault ihe trial cour? h .
i failing to r-tlie
correctly on an issue ir was ncver given the opporiu~lit:;to consider."' Ctrijieil Irm'u.s1rit!.~*
[:ti.., 7 15 (cjuoting i l i r ~280 'tioi~i. 270-77: 029 PP.Zri K6Gi.
1 .~ at sir
"25
!I In conclusion. we reverse the District Court's denial of b4FH's right to seek :itto.r~cy
fces and remand t h i s issue to the District C'ourt for a. cictcrn~ii.iation whether- an award of'
of
attorney fees is appropriate. A s the second issue was not brought before the District C'ourt.
we decline to address it on appeal.
bVc concur:
Justices
Justlce Ferry l . speci a11,\ concurs
i Irreue~lcr
E2h 1 c o n c ~tvirh thc restilt of rhc majority Opinion. I-Ioi\:cvcr. 1 do not agrcc will1 ail that
~r
is said in that Opinion.
yj27 Finding virtue in certainty and nothing inherently beneficial about a "measured
approach" that provides no future guidance to litigants, I would follow the precedent of the
9th Circuit Got~rt Appeals in ~Vusonl C:O/Mt-I Ct.i,oc/l``(rtl, (9th Cir. 1997), 122 F.3d
of 1). Irlc.
830, rathcr than the 7th Circuit's approach in ?lor+ Co.
v. .-lrzclzor Hocking l'rrck~zgi~lg (7th
q,28 In ;Vzr~or,r.the 9th Ctrcu~t
held that:
[A] Rule 68 offer for judgment in a specific sum together with costs, which is
silent as to attorney fees, does not preclude the plaintiff from seeking fees
when the underlying statute does not make attorney fees a part of costs.
2 That 1s a rule that anyone can understand
7130 1 the
01 other hand, the 7th Circu~t
held in .2hr-* that:
['S/he appropriate adjustment is to insist that the Rule 68 offer be completely
unambiguous. not that it use the magic words "attorneys' fees."
T3 1 Insisting that Rule 68 offers be completely unambiguous and then deciding on a ease-
by-case basis whether an offer is or is not unambiguous does not serve anyone's interest. No
one would ever make a Rule 08 offer that he or she thought was ambiguous in the first place.
ignores the prior admonition in thc
Furthernlore, the anlbiguous rule established in ~Vorcihy
samc case scgardirzg the importance of certainty in Rule 0 8 offers. Tlrat court corrcctiy statcd
rim:
\L'e arid that an ambiguous offer places the plaintiff in a11 uncomfortable
position. Not knowing thc actual value of the offer: he can't make an
ii~telligentchoicc whether to accept it--and there are consequences either way.
For unlike the case of an ordinary contract offer, the offeree cannot reject it
without legal consequences, since if he rejects it atid then doesn't do bcttcr at
trial he has to pay the dcfcndant's post-offer costs. [Citation omitted.]
1,32 Bccausc the Defendant's offer mas s~lent
regard~ng
wan er of attorney fecs M h ~ c h ere
v
statutorily authorized to a prevailing claimant and because I concur that it is in the interests
of the offeror and offcrec that a Rule 08 offer ofjudgment be clcar and unan~biguous order
in
to effect a waiver of attorney fees, 1 concur with the majority's conclusion that MFtf did not
waive its claim for attorney fecs which was independent of statutory costs a ~ i d decision
its
to reverse the Distrtct Court. I-loueher. I disagree that a Rule (18 offer of ludgment can be
clear and unanib~guous
regard~ng tndepcndent statutory cla~m attorney fees ulthout
an for
refening to "attorney fees" in the offer.
Justice .iim Rice concurring in part and dissefiting i n part.
"133 holding or1 ISSUC 1. I agree with the
Coricurring on lsslie 2. 1 cfiisscrrt from thc Co~1rt.s
holding ill /Vii.~-tiii~ attonicy fees niust be addrcsscd unambiguously within Rrrlc 68
that
judgrncnls in order to rcsolve the issue. However, I do not bciicvc arnbigiiity cxisted hcrc.
MFfi's acceptance indicated that all of its claims were resolved by thc Rancses' offcr of
judgment; which necessarily included its express claim for attorney fees.
7/34 Like the Crourt, I find the reasoning in !Voviihy persu:isive. but, contrary to the Court,
I would reach thc same rcsult as the Arordby court did. In K'ordhy, languagc similar to that
uscd 'here was found to have encompassed the plairttiffs claim for attorney fces. 1 do not
find it necessary. for ~ L I I - p o s e m f case, to distinguish iVo'or.i&r on ihc g r o u ~ ~ that ihc
this ds
language there was uscd by the party making the offcr, while the similitr language hcrc tvas
used by the party accepting the offer. l'o the extent that the attorney fee issue was ambiguous
within the Barneses' offer, the issue was clarified by MFtl's acceptance, and confirmed by
tltc parties' subsequent actions in accordance thcrcwith.
'135 1 firtil no fault with thc District Court's ruling, and would aftirnm.