Montana Supreme Court rules in Swapinski appeal

The Supreme Court of the State of Montana issued a ruling Sept. 15 upholding, in part, District Court Judge James Wheelis’ award of legal costs and fees as the result of a lawsuit filed by Lincoln County resident Dale Swapinski.

Swapinski filed suite against Lincoln County, Commissioner Mike Cole, former commissioners Ron Downey and Anthony Berget and former executive assistant Bill Bischoff July 7, 2014, alleged the county committed procedural errors in what he characterized as the “orchestrated succession” of Commissioner Greg Larson to replace Downey upon his resignation.

Downey submitted a letter to the other county commissioners June 4, 2014, in which he stated his intent to resign from office effective Aug. 1, 2014. Because the resignation was not effective until Aug. 1, an election to replace Downey was not scheduled for the November 2014 ballot. Instead, Larson was appointed by the commissioners to complete the remaining two years of Downey’s term, pursuant to Montana law.

“Whenever a vacancy occurs prior to Aug. 1 before the general election held during the second and fourth year of the term, an individual must be elected to complete the term in the general election,” Montana Code Annotated 7-4-2106(3).

Swapinski argued Downey’s resignation should have been effective 72 hours after the June 4 submission to the commissioners, not on Aug. 1, as he specified in the letter. A June resignation would have triggered the requirement for an elected, as opposed to appointed, replacement for Downey.

Lincoln County disagreed, arguing Downey’s letter indicated an intent to resign as of Aug. 1, not an actual resignation effective upon receipt.

“It is with great regret that I must inform you that I will resign my position as county commissioner, District 2, Troy, effective Aug. 1, 2014,” Downey wrote in the letter.

Lincoln County retained attorney Jinnifer Mariman to handle the case, as County Attorney Bernard Cassidy felt his previous involvement in the case could create a possible conflict of interest, should he be called to testify.

Wheelis agreed with the county, citing Downey’s use of the phrase “will resign” as an indication of intent, not an action. In his ruling, Wheelis declared the suit “frivolous” and ordered Swapinski to pay the county’s legal fees of $6,271. 

Swapinksi challenged the amount of the fee award and a hearing was held in October 2014 to determine reasonable costs and fees. Wheelis sided with the county, upholding the $6,271 award and allowing the county to add an unspecified amount for work performed in preparation for and including the fee hearing, an award known as fees-for-fees in the legal system.

The county’s attorneys prepared the order for Wheelis’ signature, adding $4,560 in fees-for-fees to the original $6,271 judgment for a total award of $11,281.

Swapinski appealed the order with three claims.

First, he argued the district court erred in its judgment because it allowed the county’s attorneys to draft the order and signed it with little to no editing. The county argued it is common practice for attorneys to be asked by the courts to draft and submit written orders pursuant to judges’ rulings.

The court rejected Swapinski’s claim.

“Despite this rule, Swapinski argues that the district court’s decision to adopt the county’s proposed order was erroneous per se,” the justices wrote. “He does not provide any argument or reason why the order was insufficiently comprehensive or impertinent to the issues to provide a basis for the district court’s decision. Nor can we identify any such reason upon reviewing the order. We will not reverse the district court’s order merely because it was prepared by the county’s attorneys.”

Swapinski’s second claim was that the county’s use of Kalispell attorneys to justify the charged rate was improper, as rates for attorneys in Lincoln County are lower than those in Kalispell.

The county argued they only considered the fees of attorneys who perform work in Lincoln County, although there was no legal requirement to limit the scope of comparison to only those attorneys. Based upon that comparison, the county argued, the fees were reasonable and comparable.

The court rejected Swapinski’s appeal on this claim as well.

“In reaching its decision, the district court relied upon the expert testimony presented by the county,” the justices ruled. “It considered the rates charged by that expert, who was from and primarily worked in Lincoln County. She charged up to $225 per hour for her services as an attorney. It also considered that the expert believed the rates charged to the county were reasonable. While it acknowledged that in rendering her opinion the expert considered rates charged by attorneys from the Kalispell area, the district court decided that is was reasonable to do so since ‘attorneys from the Kalispell area routinely appear’ before courts in Lincoln County. The district court weighed this against the evidence presented by Swapinski, which indicated that an attorney with limited experience had charged Swapinski $90 per hour in a 2011 landlord-tenant dispute.

“Despite Swapinski’s contention otherwise, the district court based its conclusion that the county’s attorney fees were reasonable on comparison with the prevailing rate charged by attorneys for work in Lincoln County. Whether or not it would have been an error to fail to do so, the district court decided that, in light of the prevailing rate, the county’s attorney fees were reasonable. As Swapinski’s argument to the contrary is incorrect, we affirm the district court’s decision that the rate charged by the county’s attorneys was reasonable.”

Swapinski’s third claim was that the district court abused its discretion by awarding the fees-for-fees in addition to the original fee award.

The county argued it was entitled to the additional fees based upon a previous Montana Supreme Court case, Bugger v. McGough, a landlord-tenant dispute regarding the language of a lease agreement that controlled the assessment of fees in the case.

The court agreed with Swapinski.

“Here, no statute allowed attorney fees or fees-for-fees, and the district court awarded attorney fees based upon its equitable authority,” the justices wrote. “When attorney fees are awarded in equity, we allow fees-for-fees in the rare case that exceptional circumstances warrant it. Fees-for-fees awards are so rare in such cases that even where a vexatious litigant has brought a meritless and frivolous action, we have rejected the district court’s award of fees-for-fees. The county incorrectly argues that we held otherwise in Bugger.”

Justice Jim Rice dissented in part with the decision of the court. In particular, he disagreed with the district court’s decision to award any attorney fees to the county, although that issue was not at bar in the appeal. 

“I believe Swapinski’s observations about the merits of a fee award raise reasonable concerns,” Rice wrote. “While Swapinski’s lawsuit regarding the statutory mechanism for resignation and appointment of a new county commissioner may have been based on an incorrect interpretation of the governing statute, he offered a viable argument that was worthy of review. I have certainly seen much worse. I disagree with the district court’s statements that the matter was a ‘frivolous lawsuit,’ that Swapinski’s disagreement with the appointment process was ‘a legislative issue,’ and that the lawsuit ‘wasn’t the avenue to do it.’ Statutory interpretation is the duty of the courts, and Swapinski was entitled to litigate his concerns that the process had failed to follow the statute. That he lost the argument should not, by itself, justify a fee award.”