STATE EX REL FLORENCE-CARLTON CONS

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No. 81-40 IN THE SUPREME COURT OF THE STATE OF MONTANA STATE OF MONTANA, upon the relation of FLORENCE-CARLTON CONSOLIDATED SCHOOLS DISTRICT 15 & 6"et al., Petitioners, DISTRICT COURT OF THE FIRST JUDICIAL DISTRICT OF THE STATE OF MONTANA, IN AND FOR THE COUNTY OF LEWIS & CLARK et ax., Respondents. ORIGINAL PROCEEDING: Counsel of Record: For Petitioners: Herron, Meloy & Llewellyn, Helena, Montana Clayton Herron argued, Helena, Montana and Peter Meloy argued, Helena, Montana For Respondents: Bellingham & Christenson, Billings, Montana Cresap McCracken argued, Great Falls, Montana Bruce T. Toole argued, Billings, Montana John North, Helena, Montana Robert Gannon, Butte, Montana Thomas D. Ebzery, Billings, Montana Murphy, Robinson Law Firm, Kalispell, Montana Gregory C. Black, Butte, Xuntana Alan Hux and Carol Dunn, Indianapolis, hdiana Hon. John Henson, District Judge, Missoula, Montana Submitted: Filed: June 12, 1981 Decided : AUG 3 - 1981 * Clerk Mr. J u s t i c e Gene B. D a l y d e l i v e r e d t h e O p i n i o n o f t h e C o u r t . T h i s a c t i o n was commenced the First Judicial District, i n t h e D i s t r i c t C o u r t of i n and f o r t h e County o f Lewis and C l a r k , by c o m p l a i n t f o r d e c l a r a t o r y judgment on A u g u s t 31, 1979. On March 20, 1 9 8 0 , a n amended c o m p l a i n t , adding n e c e s s a r y p a r t i e s and d e l e t i n g p a r t i e s deemed u n n e c e s s a r y t o t h i s a c t i o n , was f i l e d . for leave t o f i l e a to Plaintiffs-relators f i l e d a motion s e c o n d amended c o m p l a i n t on J u n e 1 8 , 1980. Prior any action of the court regarding this motion, r e l a t o r s f i l e d a second motion f o r l e a v e t o f i l e a revised s e c o n d amended c o m p l a i n t . Defendants objected to t h i s m o t i o n and r e q u e s t e d s a n c t i o n b e imposed upon r e l a t o r s as a condition amended to proceeding complaint. with this revised second Respondent D i s t r i c t Court g r a n t e d the motion f o r l e a v e t o f i l e t h e r e v i s e d complaint, but reserved ruling on parties, the requested respondent r e q u e s t by terms. amended c o m p l a i n t . briefing D i s t r i c t Court granted i m p o s i n g a n award o f condition precedent After t o proceeding c o s t s upon with the by all defendants' relators as a revised second From t h i s o r d e r , r e l a t o r s p e t i t i o n f o r a w r i t of s u p e r v i s o r y c o n t r o l . On Edward August 31, Dobson, M. Gale, Robert K. 1979, Daniel Lendis, H. Friends of Henning, the Gary Earth, Inc., Matson, Vicki t h e Montana E d u c a t i o n A s s o c i a t i o n , and t h e Montana S t a t e F e d e r a t i o n o f T e a c h e r s , a s p l a i n t i f f s , filed a Montana complaint for Board Land Resources, basically Inc., that of as the declaratory Commissioners defendants. land Westmoreland R e s o u r c e s , judgment This commissioners Inc., and against Westmoreland complaint were the not alleged requiring t o pay t h e f u l l market v a l u e f o r r o y a l t y r i g h t s f o r t h e e x t r a c t i o n o f c o a l on s t a t e t r u s t lands as required by law. The complaint prayed for d e c l a r a t o r y judgment t h a t c o a l l e a s e s i s s u e d t o W e s t m o r e l a n d by the land commissioners were null and void, for an a d j u d i c a t i o n of t h e l a n d c o m m i s s i o n e r s 1 d u t y t o o b t a i n f u l l m a r k e t v a l u e , and f o r a t t o r n e y f e e s and c o s t s o f s u i t . Westmoreland Resources, Inc., motions f o r s u b s t i t u t i o n of judge, filed successive and t h e H o n o r a b l e J o h n S . Henson assumed j u r i s d i c t i o n on November 1, 1 9 7 9 . t o s t i p u l a t i o n of t h e p a r t i e s and o r d e r o f Pursuant the court, an amended c o m p l a i n t was f i l e d on J a n u a r y 1 7 , 1 9 8 0 , which added Florence-Carlton C o n s o l i d a t e d S c h o o l s , D i s t r i c t s 1 5 and 6 , a s a plaintiff to t h i s action. On March 11, 1 9 8 0 , hearings, Earth, the Inc., dismissed District did from additional not the parties following motions, Court have action. were ruled that standing The indispensable Friends and court notices, was, the therefore, also to of and ruled the action that and o r d e r e d p l a i n t i f f s , r e l a t o r s h e r e , t o e f f e c t j o i n d e r of s u c h parties. On March 20, 1 9 8 0 , i n c o m p l i a n c e w i t h t h i s o r d e r , relators f i l e d a n amended c o m p l a i n t j o i n i n g defendants with Resources, Inc.: the Carter Oil the land Arkland Company; commissioners Company; Corporation; Company; United Spring Creek Coal Thermal E n e r g y , I n c . ; Corporation; Westmoreland C o a l Company; Mapco, Inc.; Company; Peter K i e w i t Sons1 Corporation; States Steel following A y r s h i r e C o a l Company; Consolidated C o a l Company; Gulf O i l C o r p o r a t i o n ; and the Western Mobil O i l Peabody R o b e r t W. Energy Decker Coal Adams; Company; and Thermal R e s o u r c e s , I n c . The amended c o m p l a i n t s o u g h t t o r e n d e r v o i d a l l s t a t e s c h o o l l a n d c o a l l e a s e s h e l d by t h e above-named It sought declaratory judgment alleging defendants. solely that the royalty rates in the existing leases did not reflect f u l l mar k e t value. No alternative theories included challenging the leases than t h a t c o m p l a i n t o f August 31, or grounds for in the original 1 9 7 9 , w e r e i n c l u d e d i n t h e amended c o m p l a i n t f i l e d March 20, 1 9 8 0 . On J u n e 1 8 , 1 9 8 0 , r e l a t o r s f i l e d and s e r v e d a m o t i o n for leave to defendants, file a except second the Westmoreland R e s o u r c e s , amended Board Inc., of complaint. Land A l l Commissioners, Thermal R e s o u r c e s , Inc., and Thermal E n e r g y , I n c . , had f i l e d r e s p o n s i v e p l e a d i n g s t o t h e amended March motion added complaint to an of amend. The additional additional 20, 1980, p r i o r proposed count allegations, second i n mandamus reasons and t o t h e second amended complaint and s e t f o r t h f i v e bases for relators' c o n t e n t i o n t h a t t h e c o a l l e a s e s w e r e n u l l and v o i d . Defendant United S t a t e s S t e e l Corporation o b j e c t e d t o the filing of alternative, relators, the second requested such amended complaint the court t o sanctions to be a and, in the impose s a n c t i o n s upon reasonable allowance of a t t o r n e y f e e s n e c e s s a r i l y i n c u r r e d i n p r e p a r i n g a n answer t o t h e s e c o n d amended c o m p l a i n t . T h i s o b j e c t i o n was f i l e d J u n e 24, 1 9 8 0 . Prior to a ruling on either relators' motion for l e a v e t o f i l e a s e c o n d amended c o m p l a i n t o r U n i t e d S t a t e s S t e e l ' s o b j e c t i o n t o such motion, relators filed a motion f o r l e a v e t o f i l e a r e v i s e d s e c o n d amended c o m p l a i n t on J u l y 16, 1980. The p r o p o s e d e f f e c t o f t h i s r e v i s i o n was t o make t e n c h a n g e s t o t h e s e c o n d amended c o m p l a i n t , such changes being matters m a t t e r s of of style substance. and correct usuage, rather than T h i s m o t i o n was n o t i c e d f o r h e a r i n g on A u g u s t 6 , 1 9 8 0 . Prior t o August 6, 1980, f i l e d objections t o relators' a l l defendants motion f o r l e a v e t o f i l e t h e A l l defendants requested s e c o n d amended c o m p l a i n t r e v i s e d . sanctions or conditions be s e r v e d and imposed upon relators in the alternative. Following hearing on August 6, 1980, respondent D i s t r i c t C o u r t r u l e d t h a t l e a v e was g r a n t e d t o r e l a t o r s t o file the second amended complaint r e s e r v e d r u l i n g on t h e q u e s t i o n o f (revised). The imposition of court sanctions u n t i l f u r t h e r b r i e f i n g c o u l d be s u b m i t t e d by a l l p a r t i e s . On September 24, 1980, respondent court granted t h e r e q u e s t f o r t e r m s by a w a r d i n g c o s t s t o d e f e n d a n t s . award was attorney limited fees by and so the court the "expenses, that forth to the The costs, defendants have i n c u r r e d " r e l a t i n g t o t h e r e v i s e d s e c o n d amended c o m p l a i n t . Defendants presented such requested that t o t h e c o u r t by a f f i d a v i t s . a f f i d a v i t s from d e f e n d a n t s court review such then the granted relators affidavits and information The c o u r t r e q u e s t e d 7, by O c t o b e r until decide be 1980. October 13, whether to The 1980, to request a h e a r i n g r e g a r d i n g t h e c o s t s o r t o s i m p l y f i l e s o m e t h i n g on the record. Defendants $209.28 t o $2,520. in opposition to filed af f i d a v i t s of costs ranging from R e l a t o r s f i l e d a n a f f i d a v i t and m o t i o n s claims for attorney fees on O c t o b e r 1 9 8 0 , b u t f a i l e d t o r e q u e s t a h e a r i n g on t h e m a t t e r . 13, Even- t u a l l y r e l a t o r s d i d f i l e a m o t i o n f o r a h e a r i n g on November 28, 1980. The deadline; thus, motion, the however, court took came af t e r imposed the no action regarding the court awarded the request. On November 28, 1980, d e f e n d a n t $150 p a r t i a l proceeding on the costs as a revised second court further ordered t h a t Montana Board Resources of Land because condition t o amended defendants responsive pleadings i n the matter. to make payment within On December 22, j udgment c l e r k of relators1 complaint. The s u c h a n award was n o t d u e t h e Commissioners those each thirty or had Westmoreland not filed any R e l a t o r s were r e q u i r e d days after entry of the with the . 1980, relators deposited t h e c o u r t f i v e c h e c k s i n t h e amount o f $150 e a c h , p a y a b l e t o t h e f i v e s e p a r a t e law f i r m s h a n d l i n g t h e a c t i o n for defendants. The c h e c k s w e r e d e p o s i t e d w i t h t h e e x p r e s s r e s e r v a t i o n t h a t t h e y w e r e t o be d e l i v e r e d o n l y i f t h e c o u r t i n d i c a t e d t h a t t h e amount r e c e i v e d was i n f u l l s a t i s f a c t i o n of its order. T h e s e c h e c k s , however, were never d e l i v e r e d t o d e f e n s e c o u n s e l b e c a u s e on J a n u a r y 9 , 1 9 8 1 , J u d g e Henson wrote r e l a t o r s 1 counsel, i n f o r m i n g him t h a t r e l a t o r s w e r e r e q u i r e d t o p a y e a c h d e f e n d a n t d e s i g n a t e d by t h e o r d e r $ 1 5 0 , n o t e a c h l a w f i r m i n v o l v e d ( a t o t a l award o f $ 2 , 4 0 0 ) . Subsequently, various defendants f i l e d motions for d i s m i s s a l because of r e l a t o r s 1 noncompliance w i t h t h e o r d e r o f November 2 8 , 1980. On J a n u a r y 3 0 , 1 9 8 1 , r e l a t o r s f i l e d t h i s p e t i t i o n f o r w r i t of s u p e r v i s o r y c o n t r o l r e g a r d i n g t h e order awarding c o s t s a s a condition t o p r o c e e d i n g on t h e r e v i s e d s e c o n d amended c o m p l a i n t . T h e r e have been two i s s u e s submitted t o t h i s Court f o r review: 1. Is a w r i t o f s u p e r v i s o r y c o n t r o l a n a p p r o p r i a t e form o f j u d i c i a l r e v i e w i n t h i s i n s t a n c e ? 2. Did t h e D i s t r i c t C o u r t a b u s e i t s d i s c r e t i o n in awarding " c o s t s " t o defendants a s a c o n d i t i o n t o r e l a t o r s ' p r o c e e d i n g on t h e s e c o n d amended c o m p l a i n t ( r e v i s e d ) ? Relators appeal or instance. contend g e n e r a l l y t h a t t h e r e other remedial Moreover, if procedure review i s no d i r e c t available is n o t granted in this under the p e t i t i o n o r t h e award n o t p a i d , r e l a t o r s w i l l be d e n i e d t h e r i g h t t o have t h e i r c o m p l a i n t d e t e r m i n e d i n a c c o r d a n c e w i t h due p r o c e s s of law, thereby resulting in gross injustice, o p p r e s s i o n and i r r e p a r a b l e i n j u r y . Regarding t h e second i s s u e r e l a t o r s contend t h a t t h e D i s t r i c t C o u r t h a s no a u t h o r i t y t o impose s a n c t i o n s a g a i n s t a p a r t y a s a c o n d i t i o n t o a l l o w i n g p r o p o s e d amendments t o its pleadings. Even i f t e r m s c a n be i m p o s e d , t h e D i s t r i c t C o u r t ' s a w a r d i n g o f " a t t o r n e y f e e s , " a s o p p o s e d t o t h e award o f " i n c i d e n t a l c o s t s , " was i m p r o p e r . Furthermore, s i n c e t h e d e f e n d a n t s have n o t b e e n p r e j u d i c e d by t h e amendments and since relators have not engaged i n g r o s s misconduct, the i m p o s i t i o n o f s a n c t i o n s c a n n o t be j u s t i f i e d . Respondent contends f i r s t t h a t t h e r e l i e f asked f o r by r e l a t o r s i s n o t a p r o p e r a r e a f o r a w r i t o f s u p e r v i s o r y control. nature The o r d e r and does not awarding present "costs" is interlocutory extraordinary or in compelling c i r c u m s t a n c e s beyond s i m p l y r e q u i r i n g r e l a t o r s t o p r o c e e d t o trial. The i s s u e r a i s e d by r e l a t o r s c a n e a s i l y be r a i s e d on appeal after a trial has judgment r e n d e r e d t h e r e o n . been had on the merits and a R e s p o n d e n t f u r t h e r c o n t e n d s t h a t a u t h o r i t y t o impose r e q u e s t t o amend t h e i r c o m p l a i n t i s c o n d i t i o n s on r e l a t o r s ' drawn f r o m t h e language ". . . provides t h a t i n Rule 1 5 ( a ) , M.R.Civ.P., which a p a r t y may amend h i s p l e a d i n g s o n l y by l e a v e o f c o u r t o r by w r i t t e n c o n s e n t o f t h e a d v e r s e p a r t y ; and l e a v e s h a l l b e f r e e l y g i v e n when j u s t i c e s o r e q u i r e s . " Thus, the District requires, to i s empowered to the from Court safeguard parties imposing such t e r m s a s a r e j u s t t h e amendment. extent of as justice prejudice by upon t h e p a r t y r e q u e s t i n g Here, d e f e n d a n t s have been p r e j u d i c e d t o t h e incurring relators' act desire substantial to expand costs their as a complaint result to of include a d d i t i o n a l l e g a l t h e o r i e s and r e l i e f , t h e r e b y j u s t i f y i n g t h e imposition of terms. R e s p o n d e n t r a i s e s a t h i r d i s s u e on a p p e a l : Did t h e r e l a t o r s w a i v e any r i g h t t o an e v i d e n t i a r y h e a r i n g on t h e award to be given, either by failing to make a timely r e q u e s t f o r s u c h a h e a r i n g o r by a t t e m p t i n g t o comply w i t h the D i s t r i c t Court's order? The i s s u e , however, need n o t b e discussed relators further in that have stated in their r e p l y b r i e f t h a t t h e y do n o t s e e k a h e a r i n g on t h e amount o f the award relators' to be granted under the court's order. The s o l e c o n t e n t i o n i s t h a t no amount c a n be p r o p e r l y awarded u n d e r t h e c i r c u m s t a n c e s , a n d , t h u s , a h e a r i n g i s n o t required. Proper action by judicial the administration District Court requires prior to freedom trial of and n o n i n t e r f e r e n c e on o u r p a r t a t t h i s s t a g e o f t h e p r o c e e d i n g . S t a t e e x r e l . Kosena v . D i s t r i c t C o u r t ( 1 9 7 7 ) , 1 7 2 Mont. 2 1 , 560 P.2d 522. The i n s t i t u t i o n o f a n o r i g i n a l p r o c e e d i n g i n t h i s Court seeking a writ of supervisory control can be however, when t h e r e is no d i r e c t a p p e a l o r o t h e r justified, remedial procedure District Court's compelling available action circumstances to provide and are when relief from the extraordinary and presented. See Rule 17 ( a ) , M.R.App.Civ.P. I n t h i s i n s t a n c e , no d i r e c t a p p e a l is a v a i l a b l e f r o m t h e o r d e r r e q u i r i n g r e l a t o r s t o p a y t h e award t o d e f e n d a n t s a s a c o n d i t i o n t o a l l o w i n g t h e amendment o f t h e i r c o m p l a i n t . we Furthermore, find that extraordinary circumstances a r e p r e s e n t which r e q u i r e a n i n q u i r y i n t o t h e D i s t r i c t C o u r t ' s proceedings prior to trial and final judgment. If we d e c l i n e d t o review t h e matter a t t h i s s t a g e , r e l a t o r s could be precluded necessary from proceeding for appropriate on relief, all counts resulting they in a deem possible improper d e n i a l of t h e i r r i g h t of a c c e s s t o t h e c o u r t s . The major issue in this proceeding is whether the D i s t r i c t C o u r t was w i t h i n i t s j u r i s d i c t i o n i n i m p o s i n g t e r m s upon the allowance of 1 5 ( a ) , M.R.Civ.P., relators' amended complaint. Rule provides i n part: ". . . O t h e r w i s e a p a r t y may amend p l e a d i n g o n l y by l e a v e o f t h e c o u r t o r w r i t t e n consent of t h e adverse p a r t y ; l e a v e s h a l l b e f r e e l y g i v e n when j u s t i c e requires." R u l e 1 5 ( a ) , M.R.Civ.P., a s c i t e d above, his by and so is i d e n t i c a l t o R u l e 1 5 ( a ) o f t h e f e d e r a l r u l e s u n d e r which it i s w i d e l y h e l d t h a t i t is w i t h i n a c o u r t ' s d i s c r e t i o n t o impose t e r m s or c o n d i t i o n s upon g r a n t i n g a m o t i o n f o r S e e Key P h a r m a c e u t i c a l s , F.R.D. I n c . v . Lowey (S.D. N . Y . 447; S h e r r e l l v . M i t c h e l l Aero, I n c . 3 4 0 F.Supp. l e a v e t o amend. 1 9 7 2 ) , 54 ( D . Wisc. 1971), 219; Thermodynamics C o r p . v . Union C a r b i d e C o r p . (D. 1 9 6 7 ) , 42 F . R . D . N.H. (E.D. Pa. 1 9 6 6 ) , 40 F.R.D. 607; Jacobs v. 486. McCloskey & Co. Comments and r e a s o n s f o r u p h o l d i n g s u c h an e x e r c i s e o f d i s c r e t i o n i s f u l l y d i s c u s s e d i n 6 Wright & M i l l e r , F e d e r a l P r a c t i c e and P r o c e d u r e , C i v i l "Rule 1 5 ( a ) g i v e s t h e c o u r t e x t e n s i v e d i s c r e t i o n t o d e c i d e whether t o g r a n t l e a v e t o amend a f t e r t h e t i m e f o r amendment a s o f course has passed. I n a d d i t i o n , a number o f c o u r t s h a v e c o n c l u d e d t h a t i t g i v e s them authority to impose conditions when p e r m i s s i o n t o amend i s a l l o w e d The s t a t e m e n t i n R u l e 1 5 ( a ) t h a t ' l e a v e s h a l l be f r e e l y g i v e n when j u s t i c e s o r e q u i r e s ' p r e s u p p o s e s t h a t t h e c o u r t may u s e i t s d i s c r e t i o n t o impose c o n d i t i o n s on t h e a l l o w a n c e o f a p r o p o s e d amendment a s a n a p p r o p r i a t e means o f b a l a n c i n g t h e i n t e r e s t s o f t h e p a r t y s e e k i n g t h e amendment and t h o s e o f t h e p a r t y o b j e c t i n g t o i t . The i m p o s i t i o n of terms o f t e n w i l l f u r t h e r t h e r u l e ' s l i b e r a l amendment p o l i c y . If the party o p p o s i n g t h e amendment c a n b e p r o t e c t e d by t h e use of c o n d i t i o n s from any p o s s i b l e prejudice t h a t might result from t h e u n t i m e l i n e s s o f t h e amendment, t h e r e i s no j u s t i f i a b l e reason for not allowing i t . " . . . S e e a l s o 3 M o o r e ' s F e d e r a l P r a c t i c e tl15.08 [ 6 ] . As a result of the District Court's discretion to impose t e r m s , t h e q u e s t i o n now becomes w h e t h e r t h e c o u r t i n t h i s i n s t a n c e abused its d i s c r e t i o n . In t h i s regard, the m o s t i m p o r t a n t f a c t o r , and p e r h a p s t h e m o s t f r e q u e n t r e a s o n g i v e n f o r d e n y i n g l e a v e t o amend, is t h a t t h e o p p o s i n g p a r t y w i l l be p r e j u d i c e d i f t h e movant i s p e r m i t t e d t o a l t e r h i s pleading. Mitchell v. P.2d 6 5 7 . O t h e r f a c t o r s t o be c o n s i d e r e d a r e t h e good f a i t h of the party seeking movant's delay, Mitchell, supra; Mitchell the ( 1 9 7 6 ) , 1 6 9 Mont. amendment, and t h e l e n g t h o f 6 Wright & the reasons the delay. Miller, 1 3 4 , 545 for the M i t c h e l l v. F e d e r a l P r a c t i c e and Procedure, C i v i l 55 1487, 1488. H e r e , t h e o r i g i n a l c o m p l a i n t was f i l e d on A u g u s t 3 1 , 1979. The complaint alleged that certain coal leases e n t e r e d i n t o by d e f e n d a n t S t a t e Board o f Land C o m m i s s i o n e r s and t h e remaining d e f e n d a n t s were v o i d a b l e o r c o m p l a i n t was grounded on the theory that void. The t h e Board, by e n t e r i n g i n t o l e a s e s which p r o v i d e d f o r a r o y a l t y r a t e b e l o w f u l l market value, MCA, was i n v i o l a t i o n of s e c t i o n 77-3-315, a n d , t h u s , was i n b r e a c h o f t r u s t r e s p o n s i b i l i t i e s owed to relators. R e l a t o r s prayed t h a t t h e D i s t r i c t Court i s s u e a d e c l a r a t o r y judgment a d j u d i c a t i n g t h e d u t y o f t h e Board o f Land C o m m i s s i o n e r s t o o b t a i n t h e f u l l m a r k e t v a l u e o f the l a n d and d e c l a r i n g t h e l e a s e s n u l l and v o i d f o r t h e B o a r d ' s f a i l u r e t o a b i d e by t h i s d u t y . Certain proceedings plaintiffs and additional were dismissed plaintiffs from the and d e f e n d a n t s w e r e j o i n e d by o r d e r o f t h e c o u r t and s t i p u l a t i o n o f t h e p a r t i e s i n amended c o m p l a i n t s f i l e d on J a n u a r y 1 7 , 1980 and March 20, 1 9 8 0 . the No a d d i t i o n a l a l l e g a t i o n s o r t h e o r i e s c h a l l e n g i n g validity complaints. of the leases were included in On J u n e 1 8 , 1 9 8 0 , r e l a t o r s f i l e d t h e i r m o t i o n f o r l e a v e t o f i l e t h e s e c o n d amended c o m p l a i n t . was made after responsive these all but pleadings to four the of T h i s motion the defendants allegations and had filed grounds for r e l i e f s e t f o r t h i n t h e o r i g i n a l and amended c o m p l a i n t . The s e c o n d amended c o m p l a i n t a g a i n a l l e g e d t h a t t h e c o a l l e a s e s were v o i d o r v o i d a b l e . Relators, however, in s u p p o r t i n g t h e a l l e g a t i o n expanded t h e t h e o r y o f t h e i r case to include the following contentions not previously presented t o t h e court: (1) The B o a r d , by e n t e r i n g i n t o t h e l e a s e s , had a c t e d i n v i o l a t i o n of Art. X, S e c t i o n 11, 1 9 7 2 M o n t . C o n s t . ; of section 81-501 77-3-301 1947 through through 81-551, 77-3-321, ( s e c t i o n s 77-1-202 77-1-102, United MCA) ; 1947 R.C.M. section and 77-1-203(1), (sections 81-103, R.C .M. MCA); section and t h e l a w s o f t h e S t a t e o f Montana and t h e MCA; States relating to the powers and obligations of trustees. ( 2 ) The Board h a s v i o l a t e d i t s t r u s t r e s p o n s i b i l i t i e s i n w a s t i n g t h e a s s e t s o f t h e t r u s t by removing t h e s u b j e c t of the trust ( c o a l d e p o s i t s ) from t h e c o m p e t i t i v e m a r k e t , wherein a g r e a t e r royalty r a t e could be o b t a i n e d , for an unconscionable p e r i o d of t i m e . (3) The Board has further violated its trust r e s p o n s i b i l i t i e s by f a i l i n g t o e f f e c t a f o r f e i t u r e o f the l e a s e s on t h e b a s i s t h a t t h e d e f e n d a n t l e s s e e s h a v e b r e a c h e d a n i m p l i e d c o v e n a n t t o d e v e l o p , p r o d u c e and m a r k e t t h e c o a l . (Defendant l e s s e e s a l l e g e d l y have y e t t o develop t h e land for coal production.) ( 4 ) The B o a r d , by g r a n t i n g a u n i l a t e r a l , preemptory r i g h t of t e r m i n a t i o n t o defendant l e s s e e s without r e c e i v i n g a similar right, has unreasonably relinquished control of t r u s t a s s e t s without mutuality or consideration. ( 5 ) The r o y a l t y r a t e s i n t h e l e a s e d o n o t r e p r e s e n t f u l l and f a i r m a r k e t v a l u e a s compared w i t h o t h e r r o y a l t i e s on c o n t i g u o u s o r s i m i l a r l a n d . t h e f u l l market value of The l e a s e s h a v e t h u s r e d u c e d the estate constituting a direct v i o l a t i o n o f t h e p u r p o s e o f t h e t r u s t t o o b t a i n t h e maximum benefit for its beneficiaries. I n a d d i t i o n t o expanding t h e t h e o r y of t h e i r a c t i o n , relators' for relief s e c o n d amended c o m p l a i n t a l s o e x p a n d e d t h e p r a y e r to include a request for a writ of mandamus c o m p e l l i n g t h e Board t o v o i d t h e l e a s e s and t o make t h e l a n d a v a i l a b l e f o r new and r e n e g o t i a t e d l e a s e s . Upon receiving amended c o m p l a i n t , leave was e x t e n t of agreed request the motion for leave to file this d e f e n d a n t s o b j e c t e d and a r g u e d t h a t , granted, Defendants' allowing the should it was amendment, based be on made a t h e y would incurring substantial costs. with defendants' position conditional. contention be if that by to the prejudiced The D i s t r i c t C o u r t and imposed terms in g r a n t i n g r e l a t o r s ' motion. I n t h e i r p e t i t i o n f o r a w r i t of supervisory control r e l a t o r s a r g u e t h a t s i n c e f o r m a l d i s c o v e r y p r o c e e d i n g s had not been instituted e . , interrogatories served or d e p o s i t i o n s t a k e n ) and s i n c e t h e c a s e had n o t b e e n s e t f o r t r i a l o r b r i e f i n g on t h e m e r i t s , t h e r e was no p r e j u d i c e t o defendants The c a u s e d by only retracing f i l i n g t h e s e c o n d amended c o m p l a i n t . of effort required of defendants, m a i n t a i n s r e l a t o r s , would b e t o f i l e amended a n s w e r s . We power find to impose amended t h a t g e n e r a l l y t h e D i s t r i c t Court has terms or complaint. D i s t r i c t Court component o f c o n d i t i o n s on l e a v e Relators erred argue, i n considering the partial to however, "attorney costs granted a s a the file that an the fees" as a condition to t h e i r amendment. I n s u p p o r t of t h e argument, r e l a t o r s r e l y upon rule the absence general of a adopted contractual by t h i s Court t h a t agreement or specific authority, attorney fees are not recoverable. Jonal Corporation (1976), 1 6 9 Mont. 247, in the statutory S e e Winer v . 545 P.2d 1094; K i n t n e r v . H a r r ( 1 9 6 5 ) , 1 4 6 Mont. 461, 408 P.2d 487. R e l a t o r s have p r o p e r l y set f o r t h t h e g e n e r a l r u l e i n r e g a r d t o a n award o f a t t o r n e y f e e s . It s h o u l d be n o t e d , however, t h a t t h e r u l e h a s b e e n e x p a n d e d t o i n c l u d e a l l o w i n g attorney statute fees or in spite of contractual grounds. , 625 P.2d absence agreement, S e e Means v . Mont. the solely Montana Power 32, of 38 S t . R e p . any upon Company 351. specific equitable (1981), - I t is upon t h i s same i n h e r e n t e q u i t a b l e power t h a t o t h e r c o u r t s h a v e a l l o w e d t h e i m p o s i t i o n o f a n award o f a t t o r n e y f e e s a s a c o n d i t i o n t o amendment. Pa. See M a t l a c k , 1 9 7 2 ) , 57 F . R . D . Inc. v. Hupp C o r p o r a t i o n ( E . D . 1 5 1 ; M i r a b e l l a v . Banco I n d u s t r i a l d e l a Republics A r g e n t i n a (1970), N.Y.S.2d Myer 400; W i l l i a m v . 34 A p p . D i v . 2 d ( 1 9 0 7 ) , 150 Cal. 630, 714, 309 89 P . 972. I f , under a l l of t h e c i r c u m s t a n c e s o f a c a s e , j u s t i c e would require the imposition of costs as a condition t o a l l o w i n g an amendment, e q u i t y c a n f u r t h e r , i n e x t r e m e c a s e s , allow, as an element of those costs, attorney fees. P r e j u d i c e t o a p a r t y i n t h i s k i n d o f c a s e r e s u l t i n g from a n amended complaint is n o t limited solely t o general costs expended i n u n d e r t a k i n g a d d i t i o n a l p r e p a r a t i o n b u t o b v i o u s l y c a n i n c l u d e a t t o r n e y f e e s expended i n r e s p o n d i n g t o i s s u e s or t h e o r i e s not previously asserted. c o u r t , however, T h i s d i s c r e t i o n by t h e s h o u l d b e c a r e f u l l y and s p a r i n g l y u s e d and t h e c o u r t s h o u l d be c a r e f u l t h a t a s p i n - o f f does not develop which would o r c o u l d d e n y t h e a d v e r s e p a r t y a c c e s s t o t h e c o u r t and a f a i r t r i a l on t h e m e r i t s . Relators' final argument each defendant is unsupported, i s t h a t t h e $150 award t o unreasonable, and amounts t o a c l e a r a b u s e o f d i s c r e t i o n by t h e D i s t r i c t C o u r t . Due t o r e l a t o r s ' f a i l u r e t o timely request a hearing o n t h e m a t t e r , t h e o n l y e v i d e n c e upon which t h e award c o u l d be is contained based parties listing amendment. the The i n t h e a f f i d a v i t s s u b m i t t e d by t h e costs total (including attorney incurred costs fees) as listed ranged from a in result the of the affidavits $209.28 to $2,520. T h e s e c l a i m s r e p r e s e n t e x p e n d i t u r e s made by t h e v a r i o u s l a w firms, which defendant. in It some would instances appear represent that the more claims than have one been i n f l a t e d w i t h i n a p p r o p r i a t e e x p e n d i t u r e s ( i . e . , e x p e n s e s and fees for a l l services a s t o a l l pleadings t o date, not j u s t t h o s e e x p e n s e s and f e e s r e l a t e d t o t h e f i l i n g o f t h e s e c o n d amended c o m p l a i n t ) . T h i s , however, d o e s n o t i n v a l i d a t e t h e $150 a s s e s s m e n t , a t l e a s t m a t h e m a t i c a l l y . indicated herein, As impose we affirm the District Court's authority to conditions on a pleadings, a s o r when j u s t i c e r e q u i r e s . request to amend The i m p o s i t i o n o f s u c h s a n c t i o n s , h o w e v e r , r e q u i r e s a showing o f e x t r a o r d i n a r y prejudice. here to parties W do n o t f i n d s u f f i c i e n t s t r e n g t h i n t h e r e c o r d e support suffer this the degree same of kind prejudice; or amount nor of did all prejudice. T h e r e f o r e , t h e o r d e r i m p o s i n g c a s h s a n c t i o n s i s v a c a t e d and set aside, without prejudice, so r a i s e d on a n a p p e a l , i f a p p r o p r i a t e . that the matter c a n be We concur: 4 D'strict Judge, sitting in p ace of Mr. Chief Justice Frank I. Haswell

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