LeaseAmerica Corp. of Wis. v. State

625 P.2d 68, 191 Mont. 462
CourtMontana Supreme Court
DecidedMarch 15, 1981
Docket80-269
StatusPublished
Cited by11 cases

This text of 625 P.2d 68 (LeaseAmerica Corp. of Wis. v. State) 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
LeaseAmerica Corp. of Wis. v. State, 625 P.2d 68, 191 Mont. 462 (Mo. 1981).

Opinions

MR. JUSTICE MORRISON

delivered the opinion of the Court.

The State appeals a Lewis & Clark County District Court decision awarding plaintiff, Leaseamerica, a summary judgment. Leaseamerica cross-appeals from prejudgment and post-judgment interest.

In 1967 the Legislature authorized the state attorney general to establish a law enforcement teletypewriter communications system (LETS) and to acquire the necessary equipment by lease, purchase or other means. In March 1973, then Attorney General Robert Woodahl entered into a lease arrangement with Action Communications Systems, Leaseamerica’s assignor, whereby the State agreed to lease the necessary equipment for a period of six years, paying $2,388 in 72 monthly payments. Immediately thereafter, Action assigned the lease to Leaseamerica, together with all rights to the lease payments. The State made the lease payments from May 1973 to May 1977, when Attorney General Mike Greely notified Leaseamerica that it was unilaterally terminating the lease. Notice of Action’s sale, assignment, and transfer of all interest in the lease to Leaseamerica was not filed with the state auditor until shortly before this lawsuit was instituted. At the end of the 72-month period, Leaseamerica took possession of the equipment. On February 9, 1978, Leaseamerica commenced an action seeking: (1) specific performance of the State’s obligation to pay under the lease; (2) attorney fees pursuant to an indemnity provision in the lease; (3) prejudgment and post-judgment interest.

The District Court entered judgment in favor of Leaseamerica for the lease payments and attorney fees but denied Leaseamerica’s claim for interest.

[464]*464The following issues are presented in this appeal:

1. Is a six-year lease of a law enforcement communications system entered into by the attorney general of the State of Montana in March 1973 unenforceable as against the State under the provisions of section 82-1918, R.C.M. 1947, which then limited the term of those state contracts covered by the statute to three years?

2. Is an assignee of the lessor of a law enforcement communications system prohibited by section 17-8-211(1), MCA, from filing an action against the State for specific performance of the lease agreement where notice of the assignment of the lessor’s interest to the assignee was not filed with the state auditor until just prior to the filing of the action?

3. Is the State obligated to pay attorney fees where a lease provided for indemnification of lessor, and the lessor’s successors, for failure of the State to perform or comply with any of the terms of the agreement?

4. After adoption of the 1972 Montana Constitution, is the State obligated to pay prejudgment and post-judgment interest on lease payments from the due date of each payment?

The lease here in dispute was executed in March of 1973. At that time, Ch. 19, of Title 82, entitled Purchasing Department and Agent, section 82-1918, R.C.M. 1947, provided:

“contracts limited to three years. No contracts shall be made for a longer period than three (3) years and such contract shall provide for the delivery of such articles at such times and in such quantities as the purchasing agent may determine.” (Emphasis supplied.)

The subject lease was executed by the attorney general pursuant to power derived from sections 44-2-301, MCA, and 44-2-302, MCA. The former authorized establishment of a law enforcement telecommunications system while the latter authorized the attorney general to lease equipment necessary for accomplishing the objective.

In Holtz v. Babcock (1963), 143 Mont. 341, 389 P.2d 869, this Court held that lease — purchase contracts executed by the state [465]*465purchasing agent were subject to competitive bidding requirements of the state purchasing statutes. Here the issues are whether those same statutes and in particular, section 82-1918, R.C.M. 1947, limiting contracts to three years, applied (1) to leases which have no option to purchase and (2) to leases executed by the attorney general. The questions have not previously been decided by this Court.

Applicable rules of construction are: (1) Both the context of a statute and the plain meaning of its terms can be considered in determining legislative intent. In Matter of Adoption of Smigaj (1977), 171 Mont. 537, 540, 560 P.2d 141. (2) The title to an act may be looked to in construing the act. In re Coleman’s Estate (1957), 132 Mont. 339, 343, 317 P.2d 880. (3) In determining legislative intent a court can resort to history of the statute. Dept. of Rev. v. Puget Sound Power & Light (1978), 179 Mont. 255, 587 P.2d 1282, 35 St.Rep. 1368.

When passed in 1923, section 82-1918, R.C.M. 1947, limited contracts to one year. This statute was in effect when, in 1967, statutory authorization empowered the attorney general to lease telecommunications equipment. The one-year limitation was changed to three years by amendment in 1971.

Section 82-1918, R.C.M. 1947, as it existed when the present lease was executed, was silent regarding leases. When the Legislature granted leasing power to the attorney general, a limitation of years was not provided either by reference to the chapter covering purchasing agent or limited in Ch. 2, Title 44, which established the system. The Legislature amended section 82-1918, in 1971, four years after the attorney general was authorized to lease telecommunications equipment; there was no legislative attempt to apply the provisions of section 82-1918 to Title 44.

Prior to the 1971 legislative session, the attorney general had, on July 14, 1969, issued a formal opinion stating the prohibitions of section 82-1918, R.C.M. 1947, did not apply to state leases. The lease issue was being discussed and was a subject of an at[466]*466torney general’s opinion when section 82-1918 was amended in 1971; yet the prohibitions were not applied to leases.

We are persuaded by the following factors: (1) Section 82-1918, R.C.M. 1947, refers specifically to the purchasing agent, but it does not refer to any other agents of state government. (2) Section 82-1918 is a section under Ch. 19, entitled Purchasing Department and Agent. (3) Title 44, giving the attorney general power to lease telecommunications equipment, does not limit that power as to time. (4) Section 82-1918 was amended in 1971, four years after the attorney general was authorized to lease without limitation and two years after the attorney general gave an opinion that section 82-1918 did not apply to leases; yet no attempt was made by the Legislature to apply section 82-1918 to the attorney general’s leasing power.

We find section 82-1918, R.C.M. 1947, not applicable to leases executed by the attorney general pursuant to section 44-2-302, MCA.

The State contends that failure of Leaseamerica or its assignor to record the lease assignment with the state auditor prior to February of 1978 forecloses this action which was not instituted until February 9, 1978.

Section 17-8-211(1), MCA, provides:

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LeaseAmerica Corp. of Wis. v. State
625 P.2d 68 (Montana Supreme Court, 1981)

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Bluebook (online)
625 P.2d 68, 191 Mont. 462, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leaseamerica-corp-of-wis-v-state-mont-1981.