Friedel, LLC v. Lindeen

03/21/2017
DA 16-0358
Case Number: DA 16-0358
IN THE SUPREME COURT OF THE STATE OF MONTANA
2017 MT 65
FRIEDEL, LLC,
Petitioner and Appellant,
v.
MONICA LINDEEN, STATE AUDITOR,
Respondent and Appellee.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DV 14-1465
Honorable Michael G. Moses, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
William J. O’Connor, II, O’Connor & O’Connor, P.C., Billings, Montana
For Appellee:
Nicholas Jon Mazanec, Special Assistant Attorney General, Montana State
Auditor, Helena, Montana
Submitted on Briefs: January 25, 2017
Decided: March 21, 2017
Filed:
__________________________________________
Clerk
Justice James Jeremiah Shea delivered the Opinion of the Court.
¶1 Friedel, LLC (Friedel) successfully obtained documents from the Montana State
Auditor’s Office, and requested attorney fees pursuant to § 2-3-221, MCA. The
Thirteenth Judicial District Court, Yellowstone County, denied Friedel’s request and it
appealed the Order of the District Court. We address the following issue:
Whether the District Court abused its discretion by denying Friedel’s request for
attorney fees.
¶2 We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 Friedel is a surety insurance (bail bond) company in the State of Montana. On
February 11, 2014, the Office of the Montana State Auditor, Commissioner of Securities
and Insurance (Auditor) instituted an administrative action against Friedel for the purpose
of ascertaining whether Friedel’s business practices complied with Montana law. On
June 6, 2014, Friedel served two nearly identical requests on the Auditor, asking for the
entire agency file on Friedel. The first was submitted as a discovery request within the
context of the administrative action. The second was made pursuant to the “Right to
Know” provision of the Montana Constitution. Mont. Const. art. II, § 9. On July 3,
2014, the Auditor responded to the two requests by providing Friedel with 276
documents and a privilege log for nine documents that were not released. On October 8,
2014, Friedel filed a motion to compel the Auditor to give it access to the documents
covered by the privilege log. Prior to the filing, Friedel did not express any concerns
regarding the privilege log to the Auditor. On October 23, 2014, the hearing examiner
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denied Friedel’s motion to compel, noting that Friedel failed to object to the privilege log
for over three months.
¶4 On October 14, 2014, Friedel filed another right-to-know request in the District
Court, again asking for the information covered by the privilege log. On April 29, 2015,
before the District Court ruled on Friedel’s request, the Auditor waived privilege and sent
Friedel the requested information. On October 29, 2015, Friedel requested attorney fees
pursuant to § 2-3-221, MCA. The District Court denied Friedel’s request, reasoning that
Friedel “could have avoided the attorney fees incurred in the instant case by timely
addressing the issue before the hearing examiner.”
STANDARD OF REVIEW
¶5 Where legal authority exists to award attorney fees, we review a district court’s
decision to grant or deny the fees for an abuse of discretion. Wohl v. City of Missoula,
2013 MT 46, ¶ 29, 369 Mont. 108, 300 P.3d 1119. Abuse of discretion occurs when a
district court acts “arbitrarily without employment of conscientious judgment or
[exceeds] the bounds of reason resulting in substantial injustice.” Gaustad v. City of
Columbus (In re Investigative Records of the City of Columbus Police Dep’t), 272 Mont.
486, 488, 901 P.2d 565, 567 (1995) (citing Goodman v. Goodman, 222 Mont. 446, 448,
723 P.2d 219, 220 (1986)). We will not substitute our judgment for that of a district court
unless that court “clearly abused its discretion.” Billings High Sch. Dist. No. 2 v. Billings
Gazette, 2006 MT 329, ¶ 23, 335 Mont. 94, 149 P.3d 565.
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DISCUSSION
¶6 Whether the District Court abused its discretion by denying Friedel’s request for
attorney fees.
¶7 Section 2-3-221, MCA, provides that district courts may award attorney fees to
plaintiffs who succeed in actions brought pursuant to Article II, Section 9 of the Montana
Constitution. The plain language of this statute evinces that “an award of attorney’s fees
is discretionary.” Yellowstone Cnty. v. Billings Gazette, 2006 MT 218, ¶ 30, 333 Mont.
390, 143 P.3d 135 (citing Matter of Investigative Records, 265 Mont. 379, 382, 877 P.2d
470, 472 (1994)). We have held that an abuse of that discretion occurs when a district
court denies attorney fees without some rationale in support of its decision. Shockley v.
Cascade Cnty., 2016 MT 34, ¶ 8, 382 Mont. 209, 367 P.3d 336; Yellowstone Cnty., ¶ 30;
Matter of Investigative Records, 265 Mont. at 383, 877 P.2d at 472.
¶8 In this case, the District Court issued a fifteen-page memorandum in support of its
decision denying Friedel’s request for attorney fees. The District Court gave several
reasons for its decision, including that Friedel took an unreasonable approach to resolving
the discovery dispute. We find this reason to be a sufficient basis for our decision, and
thus decline to address the District Court’s other rationales. The District Court noted that
Friedel had ample opportunity to follow up with the hearing examiner after the Auditor
responded to its discovery request with the privilege log in July. Instead, Friedel took no
action with respect to the privileged documents until it filed the motion to compel on
October 8, over three months from the time it received the privilege log. Nor did Friedel
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communicate with the Auditor about its dissatisfaction with the privilege log, missing
another opportunity to resolve the issue without resorting to a right-to-know action.
¶9 We have previously upheld a district court’s denial of attorney fees when the state
or public entity has taken a reasonable approach to resolve a right-to-know matter.
Disability Rights Mont. v. State, 2009 MT 100, ¶ 33, 350 Mont. 101, 207 P.3d 1092;
Billings High Sch., ¶ 28. Given the facts of this case, we cannot conclude that the District
Court abused its discretion by denying Friedel’s request for attorney fees.
CONCLUSION
¶10 We affirm the District Court’s order denying Friedel’s request for attorney fees.
/S/ JAMES JEREMIAH SHEA
We concur:
/S/ MIKE McGRATH
/S/ DIRK M. SANDEFUR
/S/ BETH BAKER
/S/ JIM RICE
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