                               No. 86-571
               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1987


STATE OF MONTANA, ex rel., LOREN S.
VRANISH, H. LEE TOWER, GALLATIN-MADISON
RANCH CO., a Montana corp., C. DALE and
LORETTA COLLINS, AL DYKSTERHOUSE, HENRY
DYKSTERHOUSE, et al.,
                                Relators,
              -vs-
THE DISTRICT COURT OF THE FIRST JUDICIAL
DISTRICT OF THE STATE OF MONTANA, IN AND
FOR THE COUNTY OF LEWIS & CLARK and THE
HONORABLE HENRY LOBLE, Presiding Judge, and
D.A. DAVIDSON & CO., INC.,
                                Respondents.


ORIGINAL PROCEEDING:

COUNSEL OF RECORD:
         For Relator:
                 Luxan & Murfitt; Michael J. Mulroney argued, Helena,
                 Montana
         For Respondent:
                 Hooks & Budewitz; Patrick F. Hooks, argued, Townsend,
                 Montana
                 Dorsey & Whitney; Edward J. Pluimer, Minneapolis,
                 Minnesota
         Hon. Henry Loble, District Judge, Helena, Montana


                                   Submitted: May 26, 1987
                                     Decided: August 12, 1987

Filed:   AUG 1 2 1987


                                   Clerk
Mr. Justice William E. Hunt, Sr., delivered the Opinion of
the Court.


     This is an original proceeding before the Montana
Supreme Court.      Relators are applying for a writ of
supervisory control regarding an order issued by the District
Court of the First Judicial District on September 30, 1986
denying their claim for punitive damages.       We deny the
application for a writ of supervisory control.
     The issues in the application are:
     1. Should relators be estopped from requesting Count 1
be treated as a separate and distinct common law fraud claim
for punitive damages purposes where respondents allege
relators have previously represented to the trial court that
Count 1 is a statutory claim under the Montana Securities Act
for statute of limitations purposes?
     2. Did the trial court correctly rule that Count 1 of
relator-plaintiffs' complaint was a statutory claim under the
Securities Act and that it should be treated as such for all
purposes under the litigation?
     3. Did the trial court err when it dismissed relator's
punitive damages claim for Count 3?
     Relators filed their original complaint in February,
1982, and amended it in March, 1982 and December, 1983. The
complaint is related to a 1976 purchase of limited
partnership interests in a tax shelter known as Energy and
Utility Coal Investments, Tnc.
     To avoid lengthy and potentially unnecessary discovery,
both parties agreed that the statute of limitations issue
should be settled prior to commencing discovery. On May 23,
1986, relators moved the trial court for a ruling that an
eight-year statute of limitations applied to Count 1 of their
second amended complaint because it was part of a statutory
claim under the Securities Act of Montana, § 30-10-307, MCA.
The trial court found that Count 1 of the amended complaint
is a claim brought under the Securities Act and ordered that
the eight-year statute of limitations in S 27-2-202(1), MCA,
is applicable to all three counts.
     Respondent D. A. Davidson filed two subsequent motions
which were orally argued.          The first motion sought
clarification of the statute of limitations applicable to
Count 1 and requested the Court to treat Count 1 consistently
for all purposes in the litigation.
     The second motion requested the dismissal of plaintiff's
punitive damages claim since D. A. Davidson alleges the order
found Counts 1 and 2 to be Security Act claims and Count 3 to
be a breach of contract claim also under the Securities Act
with the result that no punitive damages were recoverable.
     On September 30, 1986, the District Court granted both
of respondents' motions and relators appeal the second motion
denying the punitive damages claims as to Counts 1 and 3 but
not as to the second count.
     Relators bring this original proceeding for a writ of
supervisory control on the dismissal of their punitive
damages claim.    The case is properly before this Court as
this appears to be the only adequate remedy available to
relators because the question of damages would necessitate a
complete retrial of the matter.
     Rela-tors argue that their complaint is a civil
securities action alleging common law fraud and mistake and a
violation   of   5 30-10-307, MCA, in connection with
respondent's sale to relators of limited partnership
interests in a coal tax shelter. In their application, they
claim Count 1 of the amended complaint charges common law
fraud on the part of the defendant; Count 2 charges
securities law violations; and Count 3 charges breach -    of
contract with the later two counts incorporating by inference
the allegations of the preceding counts. They argue it was
error to dismiss their punitive damages claim with respect to
the common law fraud alleged in Count 1 and with respect to
their breach of contract allegation in Count 3.
     Relators contend the trial court erred in concludina
that since the action included the statutory claim, all
counts were limited in recovery to the remedy provided by the
Civil Securities Act under § 30-10-307, MCA, which does not
provide for punitive damages. They argue here that Thiel v.
Taurus Drilling Ltd. 1980-11 (Mont. 1985), 710 P.2d 33, 41
St.Rep.  152, did not limit the eight-year statute of
limitations period to just statutory claims.     Instead they
argue Thiel holds that the eight-year statute of limitations
covers "civil actions" brought pursuant to § 30-10-307, MCA,
and that Count 1 of this action is part of just such a "civil
action" brought pursuant to this statute.
     The Thiel case dealt primarily with the question of
which statute of limitations should apply to an action in a
securities case. In that case this Court stated:
     It is, of course, possible to allege several
     individual causes of action based upon the same
     injury.   A court may be obligated to segregate
     plaintiff's various claims and apply separate
     statutes of limitations to each. Multiple periods
     of limitation could apply to the same case.
     Construing this theory of election of remedies with
     reference to statute of limitations, the United
     States Supreme Court has stated:
    "  .   .
         . If the choice of statute of limitations
    were dependent upon the particular facts or the
    precise legal theory of each claim, counsel could
    almost always argue, with considerable force, that
    two or more periods of limitations should apply to
    each     1983 claim.    Moreover, under such an
    approach, different statutes of limitations would
     be applied to the various § 1983 claims arising in
     the same State, and multiple periods of limitations
     would often apply to the same case. There is no
     reason to believe that Congress would have
     sanctioned this interpretation of its statute.
                                            ,
     Wilson v. Garcia (1985), - U.S. - 105 S.Ct.
     1938, 1946, 85 L.Ed..2d 254."
     We appreciate the logic of this analysis and see no
     reason why it should not be followed in securities
     cases, where claims of fraud, statutory violation,
     breach of fiduciary duty, and breach of contract
     may all spring from the same injury.

Thiel at 38.
     Relators contend the Thiel court in essence sanctioned
statutorily provided punitive damages from S 27-1-221, MCA,
for a fraud count, such as their Count 1, when it
specifically recognized that different periods of limitation
should not be applied to different counts.        Under this
analysis they contend: (1) there may be different counts in
a civil securities action; (2) each count carries an
eight-year statute of limitations; and, (3) plaintiffs, in
such actions, are entitled to the damages each count provides
if they met the requisite burden of proof.
     While we believe these final three contentions do have
merit, we note respondent's contentions paint a different
picture of the controversy. Respondent argues the relators
should be estopped from now claiming Count 1 is a separate
and distinct common law fraud claim after having successfully
argued below that Count 1 is not such a claim but is part of
a statutory claim brought pursuant to the Securities Act.
     To address this issue we must consider both the August
18, 1986 Order which allowed relators to utilize an eight
year statute of limitation and which found that Count 1 was
brought under the Securities Act and the September 30, 1986
Order which dismissed relators punitive damages claim under
Count 1.
     Relators' memorandum supporting its motion for an
eight-year statute of limitations read as follows:
     Count One of Plaintiffs Second Amended Complaint in
     this action is part of a civil action brought
     pursuant to § 30-10-307 M.C.A. and is thus covered
     by the eight-year limitation period.   (Emphasis in
     original. )
    The District Court found:
    Count One is a claim brought under the Securities
    Act.    Therefore, in accordance with Thiel the
    eight-year limitations period of $ 27-2-202 (1),
    MCA, is applicable to Count One of plaintiffs'
    Second Amended Complaint.
    Relators now say:
    Count One of the Second Amended Complaint charges
    common law fraud on the part of the defendant.
     Relators represented to the trial court that Count 1 was
a statutory claim and the court found it to be characterized
as such. A court will consider those issues placed before it
by the parties. Relators are estopped from now arguing Count
1 is not a statutory claim but a common law fraud claim.
     Further, we find no error by the trial court in the
characterization of Count 1 as a statutory claim. The trial
court recognized that each count could be interpreted as
sounding in contract, tort or statutory violation but found
the essence of Count 1 was the alleged violation of the
Montana Securities Act. It correctly concluded Count 1 could
not be characterized as one claim for statute of limitations
purposes but characterized as another type of claim for
damages purposes.    This Court has previously found it is
imperative to characterize and treat each claim consistently
for all purposes in the litigation.     Israelson v. ~ountain
Tractor Co. (1970), 155 Mont. 69, 467 P.2d 149.
     So long as this rule is applied consistently for all
relevant purposes, the benefits and burdens of pursuing or
defending a certain theory are fairly distributed in
accordance with the law.    We find no error on this issue.
     Since we have found no error in the characterization of
relator's Count 1 as a statutory claim we further conclude
that the eight-year statute of limitations applies to this
case and relators are not entitled to seek punitive damages
under their Securities Act claims.
     Relators third argument is that the trial court erred in
dismissing their claim for punitive damages under Count 3 of
their second amended complaint.      In that count, relators
assert a breach of contract and argue that the defendant
violated an implied covenant of good faith and fair dealing
in connection with that breach. They contend the trial court
erroneously and prematurely ruled on the punitive damages
claim with respect to Count 3.     They further contend that
discovery was not complete and facts were not yet developed
on this count so the decision which held punitive damages
were not available in this action effectively dismissed Count
3 as well as Count 1 discussed above.
     D. A. Davidson, in contrast, argues that the trial court
did not err when it held that Count 3 was also a claim
brought pursuant to the Montana Securities Act. They claim
that while either characterization of Count 3 as a breach of
contract case or as a statutory violation is plausible, the
outcome would be the same under both characterizations
because relators would be entitled to an eight-year statute
of limitations but could not seek punitive damages.
     They contend Count 3 has never been a claim for breach
of the implied covenant of good faith and fair dealing but is
solely a breach of contract claim, the two being entirely
different claims.
     In its analysis of Count 3, the District Court concluded
that the Count was brought under the Securities Act of
Montana, as well as pursuant to principles of common law
fraud and for damages for breach of a contractual obligation.
The District Court further pointed out that in Count 3, the
plaintiffs incorporated both Counts 1 and 2, which both
constitute Securities Act claims.     For these reasons, the
District Court concluded that Count 3 was a claim brought
pursuant to the Securities Act in the same manner as was true
with Counts 1 and 2. We approve that analysis by the Dis-
trict Court. We also point out that to the extent that Count
3 is classed as a breach of contract claim, punitive damages
are not recoverable under Lemley v. Allen (1983), 203 Mont.
37, 659 P.2d 262.
     Section 30-10-307, MCA, which is a part of the
Securities Act, provides that any person who offers or sells
a security in violation of specified sections or offers or
sells a security by means of fraud or misrepresentation is
liable for the consideration paid for the security, together
with interest at 10 percent, costs and reasonable attorney
fees, less the amount of any income received on the security.
If there is a sale of a security by means of fraud, as
alleged in the pleadings, it specifically comes under the
provisions of § 30-10-307, MCA, which allows recovery only of
the consideration paid for the security plus interest, costs
and attorney fees. This is a specific legislative limitation
on the right of recovery of damages in such a transaction.
We have concluded that the complaint essentially sets forth
claims under the Securities Act.     That was the basis for
application of the eight-year statute of limitations.      We
conclude that it would be inconsistent to allow the plaintiff
to remain in court under the eight-year statute of
limitations because the claims are under the Securities Act
and yet disregard the limitation upon damages set forth in
the same Securities Act.
     We affirm the holding of the District Court in its
dismissal of the punitive damages claim as to Count 3.
     Relator's writ of supervisory control is denied.




We Concur:


      Chief Justice




 Mr. Justice L. C. Gulbrandson:
     I concur with the result, but not with all that is said in
                                                 A
the foregoing decision.                         ,
                                                ,,




                                   Justipe
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