                                 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:   June 12, 1981
                                 Decided :
Filed:   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                   i n t h e D i s t r i c t C o u r t of
the First Judicial District,                             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 .            Plaintiffs-relators               f i l e d a motion

for     leave t o f i l e a                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        to     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              to      proceeding           with     this       revised     second
amended          complaint.               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     the        requested        terms.         After        briefing       by    all
parties,             respondent            D i s t r i c t Court granted              defendants'
r e q u e s t by       i m p o s i n g a n award o f            c o s t s upon      relators as a
condition precedent                      t o proceeding          with the          revised     second
amended c o m p l a i n t .            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        August        31,        1979,     Friends       of    the     Earth,     Inc.,
Edward          M.    Dobson,          Daniel       H.     Henning,         Gary    Matson,     Vicki
Gale, Robert K.                   Lendis,       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        complaint           for     declaratory           judgment       against      the
Montana              Board     of        Land     Commissioners              and    Westmoreland
Resources,             Inc.,        as    defendants.             This       complaint        alleged
basically             that     the       land     commissioners             were    not   requiring
Westmoreland R e s o u r c e s ,                Inc.,     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.,       filed        successive
motions f o r s u b s t i t u t i o n of judge,             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 .                            Pursuant
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          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 ,             following motions,                 notices,         and
hearings,         the     District         Court      ruled       that      Friends         of     the
Earth,       Inc.,      did      not      have    standing          and    was,       therefore,
dismissed          from     the      action.          The     court       also      ruled         that
additional          parties       were      indispensable            to     the     action         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          the     following
defendants          with       the     land      commissioners            and     Westmoreland
Resources,          Inc.:        Arkland       Company;        A y r s h i r e C o a l Company;
the Carter          Oil     Company;       Consolidated           C o a l Company;           Decker

C o a l Company; Gulf O i l C o r p o r a t i o n ;            Mapco,       Inc.;     Mobil O i l
Corporation;              Spring       Creek      Coal       Company;           Peabody          Coal
Company;         Peter K i e w i t Sons1 Corporation;                     R o b e r t W.     Adams;
United       States Steel            Corporation;           Western        Energy          Company;
Thermal E n e r g y , I n c . ;      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                    defendants.
It    sought        declaratory            judgment        alleging        solely         that   the
royalty rates in the existing leases did not reflect f u l l

mar k e t    value.          No        alternative            theories       or     grounds      for
challenging the leases than t h a t                           included       in the original
c o m p l a i n t o f August 31,             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     file        a     second       amended        complaint.              A l l

defendants,           except           the      Board         of    Land     Commissioners,
Westmoreland R e s o u r c e s ,           Inc.,      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          complaint       of    March        20,   1980, p r i o r         t o t h e second
motion       to    amend.         The       proposed          second     amended          complaint
added       an    additional          count      i n mandamus          and s e t f o r t h f i v e

additional          allegations,             reasons          and    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     the        second        amended        complaint       and,     in   the
alternative,          requested            the court t o            impose s a n c t i o n s upon
relators,          such    sanctions           to    be   a    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         of     style       and      correct           usuage,           rather       than

m a t t e r s of     substance.          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,       a l l defendants                s e r v e d and

f i l e d objections t o relators'                     motion 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 r e v i s e d .             A l l defendants requested

sanctions          or    conditions           be     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           (revised).                The     court

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           imposition of              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 .               The

award     was       limited       by     the       court     to     the         "expenses,          costs,

attorney           fees     and     so       forth       that       the         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             requested             that        such          information             be

presented          t o t h e c o u r t by a f f i d a v i t s .              The c o u r t r e q u e s t e d

such     a f f i d a v i t s from d e f e n d a n t s       by O c t o b e r         7,    1980.         The

court      then         granted     relators           until        October           13,     1980,       to

review       the        affidavits        and       decide         whether            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           filed        af f i d a v i t s    of        costs        ranging       from

$209.28      t o $2,520.           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

in opposition             to    claims for           attorney fees                  on O c t o b e r     13,

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 .                 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     motion,       however,       came      af t e r     the    imposed

deadline;           thus,     the     court       took    no     action       regarding          the
request.
           On       November         28,     1980,        the     court       awarded           each
d e f e n d a n t $150 p a r t i a l       costs as a           condition t o        relators1
proceeding           on    the     revised       second    amended        complaint.             The
court further ordered t h a t                    s u c h a n award was n o t d u e t h e
Montana            Board     of     Land     Commissioners              or       Westmoreland
Resources            because        those        defendants         had      not    filed        any
responsive pleadings i n the matter.                            R e l a t o r s were r e q u i r e d
to    make         payment        within     thirty       days     after         entry    of     the
j udgment      .
           On December             22,     1980,     relators        deposited           with    the
c l e r k of       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         contend g e n e r a l l y t h a t t h e r e          i s no d i r e c t
appeal        or    other        remedial          procedure             available      in    this
instance.            Moreover,          if    review          is n o t granted        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.           The o r d e r      awarding         "costs"        is       interlocutory       in
nature       and     does      not     present         extraordinary             or   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     been         had   on     the merits        and    a

judgment r e n d e r e d t h e r e o n .
            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
c o n d i t i o n s on r e l a t o r s '    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
drawn f r o m t h e           language        i n Rule      1 5 ( a ) , M.R.Civ.P.,                which
provides t h a t          ". . .     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             Court         i s empowered        to    act        as       justice
requires,            to    safeguard           the       parties      from        prejudice            by

imposing such t e r m s a s a r e j u s t                  upon t h e p a r t y r e q u e s t i n g
t h e amendment.            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
extent        of      incurring            substantial        costs         as    a     result         of
relators'            desire       to       expand     their      complaint            to         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            further      in       that    relators       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        to    be    granted          under    the     court's         order.             The
relators'          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        judicial          administration          requires            freedom        of
action          by      the     District            Court        prior       to         trial         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

justified,         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
remedial        procedure          available           to    provide      relief      from       the
District          Court's          action           and     when        extraordinary           and
compelling          circumstances             are      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 .
Furthermore,           we    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          from      proceeding              on    all    counts     they      deem
necessary         for appropriate                relief,         resulting    in a      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               relators'        amended      complaint.            Rule
1 5 ( a ) , M.R.Civ.P.,          provides i n part:

            ". . .          O t h e r w i s e a p a r t y may amend               his
            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           by
            w r i t t e n consent of t h e adverse 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       so
            requires."

            R u l e 1 5 ( a ) , M.R.Civ.P.,            a s c i t e d above,     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         l e a v e t o amend.
S e e Key P h a r m a c e u t i c a l s ,    I n c . v . Lowey (S.D. N . Y .         1 9 7 2 ) , 54
F.R.D.      447; S h e r r e l l v . M i t c h e l l Aero, I n c .         ( D . Wisc.     1971),
3 4 0 F.Supp.        219; Thermodynamics C o r p . v . Union C a r b i d e C o r p .
(D.     N.H.     1 9 6 7 ) , 42 F . R . D .        607;     Jacobs v.        McCloskey         &   Co.

(E.D.     Pa.     1 9 6 6 ) , 40 F.R.D.              486.       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.            Mitchell        ( 1 9 7 6 ) , 1 6 9 Mont.    1 3 4 , 545
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          the    amendment,         the    reasons       for     the
movant's delay,               and t h e l e n g t h o f          the delay.         M i t c h e l l v.
Mitchell,         supra;         6 Wright            &   Miller,      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              void.         The
c o m p l a i n t was     grounded         on   the       theory      that     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,              was     i n v i o l a t i o n of      s e c t i o n 77-3-315,
MCA,    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           plaintiffs             were         dismissed            from        the
proceedings           and    additional         plaintiffs           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 .     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
the     validity            of     the      leases        were       included          in      these
complaints.            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 .           T h i s motion
was made         after       all    but     four     of    the defendants              had     filed
responsive            pleadings       to     the     allegations           and     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          through          81-551,      R.C.M.        1947          (sections

77-3-301        through          77-3-321,         MCA) ;     section       81-103,         R.C .M.

1947      ( s e c t i o n s 77-1-202            and 77-1-203(1),             MCA);        section
77-1-102,        MCA;      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
United      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 .     The l e a s e s h a v e t h u s r e d u c e d
t h e f u l l market value of                   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'         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
for    relief        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        the       motion      for      leave      to    file        this

amended c o m p l a i n t ,       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 ,       if

leave       was        granted,         it        should        be      made      conditional.
Defendants'               request     was     based        on     a    contention            that     by
allowing         the       amendment,        t h e y would        be     prejudiced           to     the
e x t e n t of      incurring substantial costs.                        The D i s t r i c t C o u r t
agreed      with defendants'                  position           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           c a u s e d by    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 .
The     only        retracing         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       find     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               the
power     to      impose       terms or           c o n d i t i o n s on l e a v e     to    file     an
amended          complaint.            Relators           argue,        however,            that    the
D i s t r i c t Court        erred     i n considering                "attorney        fees"       as a

component o f             the partial         costs granted a s 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     the     general        rule       adopted       by     t h i s Court t h a t         in     the
absence        of     a    contractual            agreement       or     specific           statutory
authority, attorney fees are not recoverable.                                        S e e Winer v .
Jonal     Corporation             (1976),         1 6 9 Mont.         247,     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        fees       in     spite     of     the     absence        of     any     specific
statute       or      contractual           agreement,           solely        upon    equitable
grounds.           S e e Means v .          Montana Power            Company         (1981),     -
Mont.             ,   625 P.2d        32,    38 S t . R e p .    351.       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.             See M a t l a c k ,     Inc.    v.    Hupp C o r p o r a t i o n ( E . D .
Pa.    1 9 7 2 ) , 57 F . R . 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),        34 A p p . D i v . 2 d     630,      309
N.Y.S.2d       400; W i l l i a m v .        Myer     ( 1 9 0 7 ) , 150 Cal.          714,   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.                      T h i s d i s c r e t i o n by t h e
c o u r t , however,        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          i s t h a t t h e $150 award t o
each defendant is unsupported,                       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    based      is contained             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
parties         listing       the     costs        incurred         as    a    result         of    the
amendment.              The      total       costs       listed          in   the     affidavits
(including attorney                 fees)       ranged       from        $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      in    some       instances          represent         more      than       one
defendant.              It    would       appear        that       the    claims        have       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 .

           As     indicated herein,               we affirm the District Court's
authority          to     impose        conditions           on     a    request         to    amend
pleadings,         a s o r when j u s t i c e r e q u i r e s .           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.          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

here     to     support        this      degree        of     prejudice;          nor      did      all
parties         suffer        the     same       kind       or    amount       of     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       that    the matter           c a n be
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 .
We concur:




 4
D'strict Judge, sitting in
p ace of Mr. Chief Justice
Frank I. Haswell
