Dreyer v. BOARD OF TRUSTEES, ETC.

630 P.2d 226, 193 Mont. 95, 1981 Mont. LEXIS 750
CourtMontana Supreme Court
DecidedJune 22, 1981
Docket80-486
StatusPublished
Cited by15 cases

This text of 630 P.2d 226 (Dreyer v. BOARD OF TRUSTEES, ETC.) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dreyer v. BOARD OF TRUSTEES, ETC., 630 P.2d 226, 193 Mont. 95, 1981 Mont. LEXIS 750 (Mo. 1981).

Opinions

MR. CHIEF JUSTICE HASWELL

delivered the opinion of the Court.

This is an appeal from a judgment against defendant for $9,806.25 attorney fees and $30.12 costs in an action wherein plaintiff members of Mid-Rivers Telephone Cooperative, Inc. were granted an injunction pendente lite in a suit to prevent the officers and Board of Trustees of Mid-Rivers Telephone Co-op from conducting a special meeting and election on proposed amendments to the by-laws of the Co-op.

On May 14, 1979, certain members of the Mid-Rivers Telephone Co-op filed an application against the Board of Trustees of the Coop seeking injunction, mandamus, and other appropriate relief to prevent the Board of Trustees from holding a special meeting and election on May 16, 1979 and to compel them to hold the 1978 annual meeting of the Co-op. The District Court issued a temporary restraining order without notice preventing the Board of Trustees from conducting the election and set a show cause hearing on (11 whether a preliminary injunction should issue; (2) whether a writ of mandate should issue to compel the holding of the 1978 annual meeting; (3) whether attorney fees should be awarded applicants from the funds of the Co-op; and (4) why at the trial of the cause the temporary restraining orders, preliminary injunction, and writ of mandate should not be made permanent.

The Board of Trustees moved to quash the temporary restraining order, the hearing was held, and the District Court issued an injunction pendente lite on August 14, 1979, pending a hearing on the merits of the underlying litigation.

No further developments occurred until April 15, 1980, when plaintiff’s attorneys wrote a letter to the judge requesting a hearing on attorney fees. The Board of Trustees moved to quash the request for attorney fees, a hearing was held and on August 25, 1980, the [97]*97District Court held that plaintiffs were entitled to attorney fees and costs. On September 5, 1980, judgment was entered against the Board of Trustees for $9,806.25 attorney fees and $30.12 costs, with interest at 10% from date of judgment.

The District Court filed a memorandum opinion on August 29, 1980, indicating the court was treating the injunction as a writ of prohibition, which the court considered the proper relief. The District Court held that substance controls over the form of relief and that although attorney fees are not allowed by statute in an injunction action, plaintiffs sought and obtained a court order preventing the Board of Trustees from conducting the special meeting and election, the same relief they would have been entitled to in an action for a writ of prohibition. The amount of attorney fees awarded was computed by multiplying the reasonable time consumed in furnishing the attorney’s services (130.75 hours) times the reasonable fee per hour ($75.00) for a total of $9,806.25. There is no issue on the costs of $30.12.

Additionally the District Court found that the trustees had not acted in good faith and had interfered with plaintiff’s voting rights. The District Court found that the award of attorney fees was proper under either the “substantial benefit” doctrine or the “private attorney general” principle.

The case was never carried to its ultimate conclusion, i. e. to a hearing and award of final judgment on the merits of the litigation including a permanent injunction or a writ of mandate. According to the defendants this issue has become moot by the passage of time.

The sole issue on appeal is whether the Board of Trustees is liable for attorney fees from the funds of the Co-op. No issue concerning the reasonableness of the fee awarded was raised in either brief.

The Board of Trustees advances four arguments why they are not liable for attorney fees: (1) an award of attorney fees is not allowable where the underlying action has not proceeded to final judgment on the merits, (2) attorney fees are not allowable in an injunction action, (3) an injunction action should not be treated as an [98]*98application for writ of prohibition in order to permit an award of attorney fees, and (4) the record is barren of any facts that would support any recognized equitable doctrine of fee shifting.

Respondents advance a number of contentions as to why the award of attorney fees was proper: (1) The Court has inherent equitable power to compel the trustees of the Co-op to follow proper procedures in calling special meetings and holding elections, (2) the gist of the action is not only to stop the improper meeting and election but to compel the trustees to continue the meetings according to law; accordingly the remedy of mandamus is part and parcel of the relief sought and by statute attorney fees are award-able in mandamus, (3) the facts contained in the affidavit of the plaintiffs, coupled with the finding that the trustees had not acted in good faith and had interfered with plaintiffs’ voting rights, demonstrate that plaintiffs won the case and were entitled to attorney fees, (4) this was a class action and the benefits secured by plaintiffs enured to the benefit of all members of the Co-op entitling plaintiffs to attorney fees under the “substantial benefit” concept of fee shifting, (5) the presumption is that the decision of the District Court is correct absent a showing that its decision is clearly erroneous which was not done here.

Respondents draw an analogy between this case and cases involving actions by union members against the union and its oficers to compel the use of proper procedures in union affairs where attorney fees have been awarded. See Gilbert v. Hoisting & Portable Engineers (1964), 237 Or. 130, 390 P.2d 320; Weber v. Marine Cooks & Stewards Assn. of Pacific Coast (1949), 93 Cal.App.2d 327, 208 P.2d 327, 208 P.2d 1009; Anno: 9 A.L.R.3d 1045, Prevailing Union Member’s Right to Recover Attorney’s Fees in Action Against Union or Union Officers.

Respondents also cite Foy v. Anderson (1978), 176 Mont. 507, 580 P.2d 114, for the proposition that this Court has sometimes awarded attorney fees in the absence of statute or contract. Respondents further point out that attorney fees have been awarded to the prevailing party who has secured a restraining order, citing [99]*99State ex rel. Butte Teamsters v. Dist. Ct. (1962), 140 Mont. 581, 374 P.2d 336.

Respondents also contend that a writ of prohibition is clearly applicable to this situation, that its function is preventive rather than remedial, and the court was correct in allowing attorney fees on this basis.

We need not discuss all the contentions of the parties in this opinion in order to arrive at a determination of the issue on appeal. One contention is controlling. The award of attorney fees in this case is premature on the merits of the underlying controversy in favor of respondents. No permanent injunction was awarded. No writ of mandate was issued. All other considerations aside, respondents are not entitled to a judgment for attorney fees without a final determination of the underlying controversy in their favor.

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Bluebook (online)
630 P.2d 226, 193 Mont. 95, 1981 Mont. LEXIS 750, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dreyer-v-board-of-trustees-etc-mont-1981.