SCHMIDT v COLONIAL TERRACE ASSOC
Annotate this Case
Download PDF
No. 81-396 IN THE SUPREFU COURT OF THE STATE OF MONTANA 1982 F. W. SCHMIDT, et al., Plaintiff and Appellant, VS. COLONIAL TERRACE ASSOCIATES, et al., Defendants and Respondents. Appeal from: District Court of the First Judicial District, In and for the County of Lewis and Clark Honorable Peter G. Meloy, Judge presidins. Counsel of Record: For Appellant: James A. Currming argued, Columbia Falls, Montana For Respondents: Worden, Thane & Haines, Missoula, Montana Ronald Bender argued., Missoula, Montana - Submitted: Decided: Filed: ;-ILL2 A i98L September 16, 1982 December 29, 1982 . Justice Daniel J . Shea delivered the Opinion of the Court. F. W. Schmidt, e t a l . (Schmidt) brought t h i s s u i t in Lewis and Clark County District Court seeking a forfeiture of property by defendants, Colonial Terrace Associates e t a l . for breach of contract. (Colonial Terrace) Colonial Terrace filed a general denial and counterclaimed for breach of contract, negligence, fraud, and unljust enrichment. The jury returned a verdict in favor of Colonial Terrace and against Schmidt and awarded $128,278 damages t o Colonial Terrace; subject t o the t r i a l court determining the offsets claimed by Schmidt. Judgment was entered on that verdict. amend the judgment. Schmidt moved t o The t r i a l court entered an order denying Schmidt's motion t o m n d judgment and an order awarding attorney fees of $27,002.50 and costs of $9,346.90 t o Colonial Terrace. Schmidt apw-als froan both orders. Schmidt claims that the t r i a l court erred in entering j u d p n t on the verdict without f i r s t holding a hearing t o determine offset. Schmidt bases t h i s claim on the response t o a question from the j q during delikerations, where the parties agreed t o l i m i t the j q ' s verdict t o the amount of damages and allow the t r i a l court t o determine the amount of offset in a l a t e r proceeding. A provision of the contract allows the prevailing party t o recover a reasonable attorney fee plus costs of suit. the amount awarded for Schmidt does not claim error i n attorney fees, but argues that the determination should have been made by the jury instead of by the trial judge. Schmidt f a i l s t o M e anv argument to support his claim that the awarded costs are in error. W affirm the order awarding attorney's fees and costs t o e Colonial Terrace. W vacate the judgment and w remand the case for e e a hearing t o determine whether the evidence establishes that an offset should be applied t o the jury verdict; and the amount of the offset if applicable. The hearing shall be confined to the existing record, without admission of any new evidence. The dispute involves a contract for the exchange of real esete. In 1977, Schmidt started construction of an apartment house complex i Helena consisting of 18 separate four unit buildings. n When construction was well. under way, Schmidt entered into negotiations for the sale of the entire project to Colonial Terrace. On August 10, 1977, Schmidt agreed to transfer the entire apartment complex to Colonial Terrace in exchange for real estate and paymnt of b t money. $1,450,000. The total. sale price of the a a - s prt was Colonial Terrace paid $20,000 earnest mney down and agreed to transfer real estate worth $150,000 and additional cash of $55,000 when Schmidt cqleted construction of the complex. Thirty days after construction was complete, Colonial Terrace was to begin making mnthly paymnts on the remaining balance of $1,225,000. On December 16, 1977, the construction lenders accepted the apartment project as complete for their purposes. At that time Schmidt was required to begin making mnthly payments on his construction loans. However, at about the same time, disputes arose between Schmidt and Colonial Terrace. Colonial Terrace notified Schmidt of construction deficiencies. After November 1979, Colonial Terrace made no further paynents into escrow, but began making mnthly paymnts directly to Schmidt's construction lenders. Colonial Terrace continued to demand construction repairs and corrections. In the meantime, Schmidt was cqlaining about the actions of Colonial Terrace. Schmidt claimed that Colonial Terrace did not pay the full amount of the first instalhnt of 1978 proprty taxes. In Decerrber 1978, Schmidt gave Colonial Terrace notice of default. In February 1979, Schmidt filed this action seeking a forfeiture of Colonial Terrace's interest in the contract. Colonial Terrace filed a general negligent denial and construction, counterclaimed fraudulent for breach of representations, contract, and unjust enrichment. The t r i a l was long and cmplicated and both sides presented a amo~mt of considerable deliberations, detailed evidence. In the course of t h e -jury s e n t a note t o the t r i a l judge asking whether they could confine t h e v e r d i c t t o a determination of damages and leave it t o the judge and. counsel t o determine t h e m u n t of o f f s e t t o be subtxacted from the damages. The exact question was : "Play the jury decide on a dmage m u n t w i t h the Court t o hear from counsel a s t o t h e amount - o f f s e t of t o be substracted from the damages awarded? W e have trouble defining the m u n t of o f f s e t paid by added. ) Colonial Terrace. " (-hasis Although the matter of t h e o f f s e t a p p a r s i n the record and is a t issue, t h e jury was not given any i n s t r u c t i o n regarding an off set. After consulting with the attorneys and with their approval, the t r i a l judge s e n t t h e following reply t o t h e jury: "The jury s h a l l decide the damage m u n t i f any sjnce t h e court without reference t o o f f s e t - - - - w i l l decide the -- o f f s e t i f any." (Enphasis added.) -- The . . deliberated a short while longer and returned t h e jury . following verdict: " e the jury in the above e n t i t l e d matter find i n W favor of Defendants on t h e i r counterclaim and against the P l a i n t i f f s on t h e i r complaint and a.ward damages t o Defendants i n the m u n t of $128,278." The verdict was a general verdict, and t h e jury needed only t o fill i n the amount of damages i n t h e hlanlc space. a l t e r n a t i v e verdict form i n t h e record states: "We the jury find i n favor of P l a i n t i f f s and w find e f o r the Defendants by way of r e s t i t u t i o n i n t h a t Defendants are e n t i t l e d t o judgment i n t h e sum of $ II The only Neither form provided the jury w i t h a method for dealing w i t h offset. Colonial Terrace did not, however, wait for a hearing on o f f s e t Sefore obtaining a judgmnt. Rather, Colonial Terrace immediately obtained a judgment and Schmidt was served w i t h notice that a iudgment of $128,278 had been entered against him. A t about the same time Colonial Terrace obtained the judgment, it filed a motion and notice of hearing t o have the t r i a l court determine attorney fees and costs, both of which were provided for i n the contract. Schmidt was then compelled t o f i l e a motion t o amend the judgment on the grounds t h a t it was premature because it had been entered before the t r i a l court had mad.e any determination on the issue of offsets. Both sides briefed the motion t o mend judgment. The t r i a l court held a hearing on Schmidt's m t i o n t o amend judgment and Colonial Terrace's motion t o assess attorney fees. After argument the t r i a l court denied Schmidt's motion t o amend judgment and awarded Colonial Terrace attorney fees of $27,002.50 and costs of $9,346.90. Concerning the question of o f f s e t , w ha.ve no doubt t h a t both e parties intended the t r i a l court t o determine o f f s e t j-n a separate proceeding a f t e r the jury had rendered the verdict. Both p a r t i e s were represented by counsel when the t r i a l judge responded t o the $.xy' s query; and both sides agreed t o allow the jury t o decide the damage amunt without reference t o o f f s e t and t o allow the t r i a l judge t o determine applicability of o f f s e t in a latex proceeding. Yet, a f t e r the verdict was returned and before the t r i a l court had such a hearing, counsel f o r Colonial Terrace acting ex parte prepared and submitted the judgment based solely on the verdict and without reference t o offset. Colonial Terrace would have us affirm the judgmnt on the p r e s q t i o n t h a t the jury's verdict i s correct. The correctness of the jury's verdict is not the question. Neither party contends that the verdict was either too large or too small. Rather, Schmidt argues, and we agree that the parties intended the trial court to determine the amount of offset after the jury returned its verdict. And it is abundantly clear by the jury's question and the response to that question that the jury was led to believe the trial court, with the aid of counsel would determine the proper m u n t of the offset in a later proceeding. Colonial Terrace can not now camplain that offset was a matter for the jury to decide after having agreed to let the trial court make that determination. Colonial Terrace also argues that no offset is permitted because the jury may have returned a verdict on either a fraud theory or a negligence theory, neither of which permits an offset. n In fact, the trial court adopted this approach i denying Schmidt's motion to amend the judgment. We are not aware, hwver, of any law n which would forbid a offset if a party prevails on either a fraud or negligence theory. No authority was cited to the District Court and none has been cited here. To argue that the jury's verdict was based on only fraud or negligence and that the jury did not intend an offset, Colonial. Terrace has some duty to show that the verdict was in fact based on fraud or negligence. The jury's verdict was general and no instruction was offered or given regardinq offset. The record does not reveal which theory the jury actually relied upon, and the evidence is sufficient to support an award of damages to Colonial Terrace on fraud, negligence or on their other counterclaims of breach of contract or unjust enrichment. Colonial Terrace's contentions on this point are not supported by the record. We therefore vacate the judgment on the verdict and remand the case to the trial court for further proceedings to determine offset, if any. Such proceeding s h a l l be confined t o evidence on khe record. W e turn t o Schmidt's claim of e r r o r iin the award of attorney fees of $27,002.50 Terrace. and c o s t s of s u i t of $9,346.90 t o Colonial The contract between the p a r t i e s allows t h e prevailing party t o recover a reasonable attorney fee, plus c o s t s of s u i t . Schmidt does not dispute the hourly r a t e , o r t h e amount of t h e attorney f e e awarded by the t r i a l judge. because the case was t r i e d t o a jury, Rather, he argues t h a t evidence of attorney fees should have been presented t o the jury, and the jury instead of the t r i a l judge should have detemined the m u n t . Schmidt d i d not t h e matter of attorney f e e s t o the jury during the t r i a l . H e therefore waived the r i g h t t o claim e r r o r in t h e procedure on appeal. The t r i a l judge held a post t r i a l hearing t o determine attornev fees. Both sides were represented by counsel and evidence was introduced. Following t h a t hearing the t r i a l judge made findings based on t h e standards we set out in Crncevich v. Georgetown Recreation Corp. (1975) , 168 Mont. 113, 541 P.2d 56. W therefore affirm the award e of attorney fees. W e are bewildered by Schmidt's claim of e r r o r i n t h e award of $9,346.90 f o r c o s t s of s u i t . Costs of s u i t were expresslv provided f o r i n t h e contract between Schmidt and Colonial Terrace. appeal b r i e f , Schmidt states, " ... In h i s [Colonial Terrace ' s] claim was accepted and approved by the t r i a l judge without e x d a n a t i o n , and [we] await the answer of t h e respondents on this so [we] w i l l have s o m d e f i n i t e position t o attack." Although Schmidt claims e r r o r in the taxing of c o s t s he has f a i l e d t o present us with any s p e c i f i c objections. W therefore affirm the award of costs. e The judgment on the v e r d i c t is vacated and the case i s remanded t o t h e t r i a l court f o r f u r t h e r proceedings t o determine o f f s e t , i f any. Such proceeding shall be limited t o t h e e x i s t i n g record. We affirm the award of $27,002.50 f o r a t t o r n e y f e e s and $9,346.90 costs t o C o l o n i a l Terrace. W e Concur: for
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
