                               No. 8 8 - 5 5 1
               IN THE SUPREME COURT OF THE STATE OF MONTANA

                                   1989




AETNA FINANCE COMPANY,
a corporation,
                Plaintiff and Appell-ant,
        -VS-

COURT E. BALL and TOWE, BALL,
EMRIGHT & MACKEY, a partnership,
                Defendants and Respondents.




APPEAL FROM:    District Court of the Thirteenth Judicial District,
                In and for the County of Yellowstone,
                The Honorable Diane G. Barz, Judge presiding.
COUNSEL OF RECORD:
        For Appellant:
                Robert J. Phillips; Snavely      &   Phillips, Missoula,
                Montana
        For Respondent:
                Richard E. Gillespie; Keller, Reynolds, Drake, Stern-
                hagen & Johnson, Helena, Montana


                                                         -   --




                                   Submitted on Briefs:           April 27, 1 9 8 9
        -.
   L
   I
   :    L-"                           Decided:       June 15, 1 9 8 9
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Mr. J u s t i c e L.       C.       Gulbrandson d e l i v e r e d t h e Opinion o f t h e
Court.


         Aetna        Finance             Company            (Aetna)       appeals             the    final
judgment        entered             September           9,       1988,        by     the       Thirteenth
Judicial        District            Court       in     favor      of    the        defendants.          The
court      held       that      Aetna's           attorney,            defendant           Court      Ball,
f u l f i l l e d h i s d u t y t o a d v i s e Aetna a s t o whether a proposed
borrower        had        a     mortgageable                 interest         in     certain          real
p r o p e r t y , such t h a t Aetna c o u l d o b t a i n a s e c u r e d i n t e r e s t i n
t h e p r o p e r t y , and whether t h e mortgagee t i t l e i n s u r a n c e would
appropriately              insure          this        secured         interest.               Therefore,
d e f e n d a n t s were h e l d n o t           l i a b l e f o r any l e g a l m a l p r a c t i c e .
W e affirm.
         The    issues presented                      f o r our review a r e a s                 follows:
         1.     Did a t t o r n e y B a l l have a d u t y t o a s s u r e t h a t c l i e n t
Aetna     had     a    valid         secured           interest         and    that        it    received
mortgagee        title         insurance             covering          that    secured          interest?
         2.     Did t h e a t t o r n e y b r e a c h t h i s d u t y t o h i s c l i e n t ?
         The ownership h i s t o r y o f t h a t r e a l p r o p e r t y c e n t r a l t o
the     issues        raised         in        this     appeal       i s q u i t e l e n g t h y and
involved.             We       will        detail        only      those stipulated f a c t s
r e g a r d i n g t h i s p r o p e r t y which a r e d i r e c t l y r e l e v a n t t o t h e
l e g a l m a l p r a c t i c e i s s u e s r a i s e d by Aetna.
         On     September            9,        1980,    Anne      Zemple       executed          a    trust
agreement         conveying               in     trust       a    certain          parcel        of    real
property       i n G a l l a t i n County t o Henry R i c h n e r .                        Richner,      as
t r u s t e e , assumed t h e r e s p o n s i b i l i t y o f making improvements t o
the    property.               To     this       end,        Richner       secured         a    loan    for
$25,000 from Aetna on August 7 , 1981.                                   T h i s l o a n was s e c u r e d
by a t r u s t i n d e n t u r e p r e p a r e d by a t t o r n e y B a l l and s i g n e d by
Richner.        B a l l prepared t h i s t r u s t indenture per i n s t r u c t i o n s
from Aetna a f t e r h a v i n g a d v i s e d Aetna t o e n s u r e t h a t Richner
had authority to grant a security interest in the property.
In response, Aetna obtained from Zemple a Consent to Mortgage
which gave her agreement to a mortgage of the property as
security for this loan.
      On March 2, 1983, Richner executed, without designation
of capacity, a Quit Claim Deed conveying his interest in the
property back to Zemple.    Thereafter, Richner began making
arrangements with Aetna to obtain another loan totaling
$38,829.66.
      On November 4, 1983, the USLIFE Title Insurance Company
(Company) issued a commitment for title insurance which
stated it would generally insure title to the property from
all claims except those affecting title and arising out of
the trust agreement dated September 9, 1980 and/or the Quit
Claim Deed executed on March 2, 1983.       The Company later
issued a mortgagee title policy containing these exceptions.
      During a meeting in Ball's office on November 11, 1983,
Aetna informed him of Richner's request for an additional
loan against the property.       Ball testified that after
examining the Quit Claim Deed and title commitment, he
advised Aetna to determine if the trust was still effective,
and if so, to obtain another Consent to Mortgage from Zemple.
Ball then prepared a consent form, and Aetna subsequently
obtained the necessary signature. Ball also advised Aetna to
get the two above-mentioned exceptions on the title insurance
commitment removed.     During a telephone conversation on
November 18, 1983, Aetna told Ball that the Company would
delete the Quit Claim Deed Exception.      Consequently, Ball
advised Aetna it could proceed with the closing of the loan,
and he subsequently prepared a trust indenture which Richner
then signed. Ball was present at the closing of this loan
that same day.
      Ball prepared a post-closing written opinion on
November 21, 1983, upon request of Aetna, stating that the
trust indenture signed by Richner had created a valid
security interest in the property sufficient to enable Aetna
to obtain mortgagee title insurance.     Ball testified that
this opinion was based upon review of the Consent to
Mortgage, the title commitment naming Richner as the vested
trustee owner, and Aetna's verbal assurance that the Company
would delete the Quit Claim Deed exception. Ball did not see
the mortgagee title insurance policy, which was issued
November 21, 1983 and which in fact retained the two
exceptions, prior to issuance of this written opinion.
      Richner defaulted on his loan obligation on January 3,
1984. Ball, acting on behalf of Aetna, commenced foreclosure
proceedings.   Zemple filed suit against Aetna and Ball to
obtain damages and a permanent injunction against foreclosure
of the trust indenture. Aetna filed a counterclaim against
Zemple and a third party complaint against Ball. The lawsuit
against Aetna was subsequently settled by Zemple's payment of
$23,998.26 to Aetna in exchange for Aetna's reconveyance of
the trust indentures, cancellation of the promissory notes,
and   dismissal   of   the   counterclaim   against    Zemple.
Thereafter, the court ordered a realignment of the remaining
parties with Aetna as the plaintiff and Ball and his law firm
as defendants.
      Following a non-jury trial on July 5 and 6, 1988, the
District Court issued its findings and rendered judgment in
favor of defendants in this realigned lawsuit.      The court
held that Ball had not assumed the duty of guaranteeing that
the title company would issue appropriate coverage insuring
Aetna's interest in the property. Rather, Ball was employed
as an attorney with limited duties and he fulfilled these by
advising Aetna how to proceed to insure its interest in the
property. Defendants thus were held not liable for any loss
Aetna incurred by virtue of its loss of a security interest
in the property, an interest which had guaranteed repayment
of monies loaned to Richner.
      Aetna alleges that Ball had a duty to ensure that it
received a security interest and appropriate title insurance
for that security interest. Aetna contends Ball's failure to
fulfill these duties constituted a breach of contract as well
as negligence.
      This whole case turns on a determination of what duties
Aetna retained Ball to fulfill.      The parties dispute the
specific duties for which the attorney-client relationship
was created, and not the general duties owed clients in
general.     See generally, Huszagh and Molloy, Legal
Malpractice: A Calculus For Reform, 37 Mont.L.Rev. 279, 335
(1976) (recognizing the two subparts to the duty element).
This dispute is one of material fact. The broad standard of
review urged by Aetna, which would allow this Court to make a
determination of this case based upon our own findings,
therefore is not applicable to this case.       Such a broad
standard of review would be applicable only if the facts were
relatively uncontested.   See, e.g., Johnson v. Division of
Motor Vehicles (1985), 219 Mont. 310, 312, 711 P.2d 815, 816.
Because a factual dispute exists as to the specific duties
Ball was obligated to perform, we will rely on the District
Court's findings and presume that they are correct unless
unsupported by substantial, credible evidence and thus
clearly erroneous.    As stated in Rule 52 (a), M.R.C~V.P.:
           Findings of fact shall not be set aside
           unless clearly erroneous, and due regard
           shall be given to the opportunity of the
           trial court to judge the credibility of
           the witnesses.
         The D i s t r i c t C o u r t examined t h e n a t u r e o f p a s t l e g a l
d e a l i n g s between Aetna              and B a l l t o d e t e r m i n e t h e terms o f
their     attorney-client             contractual relationship.                           The c o u r t
d i d n o t abuse i t s d i s c r e t i o n i n a s c e r t a i n i n g t h e e x a c t d u t i e s
Aetna     intended Ball              t o perform from an e x a m i n a t i o n o f                 the
p a r t i e s ' conduct.        W have p r e v i o u s l y h e l d t h a t when c o n t r a c t
                                 e
t e r m s a r e ambiguous,           t h e conduct o f t h e p a r t i e s i s t h e b e s t
i n d i c a t i o n of t h e t r u e i n t e n t of t h e p a r t i e s a t t h e time of
contracting.            E.g.,       Souders v . Montana Power Co.                     ( 1 9 8 3 ) , 203
Mont.     483,     486,       662 P.2d        289,       291;      Rumph v .       Dale Edwards,
Inc.    ( 1 9 7 9 ) , 183 Mont.           359, 368, 6 0 0 P.2d             163, 168.         A court
t h e n must      i n t e r p r e t t h e terms of            a contract so a s t o give
effect t o this i n i t i a l intent.                   See    §   28-3-301,       MCA.
         From      an     examination             of     the       parties'         conduct,       the
D i s t r i c t Court determined t h a t t h e p a r t i e s intended B a l l t o
determine         if     the        proposed       borrower           had      a    mortgageable
i n t e r e s t which c o u l d a c t a s s e c u r i t y f o r t h e proposed l o a n .
Moreover,         Ball        was     to     review         the      title         commitment       to
d e t e r m i n e i f t h i s s e c u r e d i n t e r e s t would be c o v e r e d under an
a p p r o p r i a t e mortgagee t i t l e i n s u r a n c e p o l i c y .           I f Aetna d i d
n o t have      a valid         interest,         B a l l was       to     a d v i s e Aetna what
actions      to    take       to    obtain        such     a valid         security         interest
and/or      appropriate             title     insurance            coverage.          Aetna,       not
Ball,     had     the     responsibility               f o r a c t i n g upon       this     advice.
The c o u r t concluded t h a t B a l l f u l f i l l e d t h e s e a d v i s o r y d u t i e s
and t h u s h e was n o t l i a b l e f o r any n e g l i g e n c e o r b r e a c h o f
contract.
         S u b s t a n t i a l c r e d i b l e evidence e x i s t s i n support of t h e
court's      findings a s            to    the    nature of          t h e d u t i e s B a l l was
r e t a i n e d t o perform.          B a l l t e s t i f i e d t h a t Aetna h i r e d him t o
a d v i s e it a s t o t h e v a l i d i t y of             the     s e c u r i t y i n t e r e s t and
t i t l e insurance coverage,                 t o i s s u e a w r i t t e n opinion a s t o
the     validity         of     each,        to    prepare           the     trust        indenture
document, and to attend the closing. He testified that he
was not expected to ensure the validity of the security
interest or appropriateness of the title insurance coverage.
In Ball's opinion, Aetna routinely handled all these other
details    and   problems,  arising   in  regards   to   loan
transactions, to save the cost of attorney's fees and thereby
to remain competitive in the lending market.
      Memos from a telephone conversation and meeting prior
to the 1981 loan by Aetna reveal that Ball assumed the
responsibility only for advising Aetna of the steps necessary
to ensure appropriate mortgagee title insurance coverage.
Memos from a November 11, 1983 meeting with Aetna again
reveal that Ball only advised Aetna of steps it should take
to ensure a valid security interest and appropriate title
insurance in regards to the proposed 1983 loan. Moreover,
Ball testified he advised Aetna to obtain a consent to
mortgage from Zemple, which Aetna subsequently obtained.
Ball also testified he advised Aetna to ensure appropriate
mortgagee title insurance coverage by having the title
company remove from the policy those two exceptions
detrimental to insurance coverage. A telephone call from an
Aetna representative on November 18, 1983, as documented on a
message pad, indicated that Aetna had assumed the duty of
resolving those problems brought to its attention by Ball and
had induced the title company to delete the quit claim deed
exception.     Ball testified that his subsequent written
opinion was based upon this telephone assurance that Aetna,
in fact, had acted upon his legal advice.      Given all the
foregoing evidence indicating Ball routinely assumed only an
advisory responsibility regarding Aetna's security interest
and mortgagee title insurance, we hold that the District
Court's findings, that Ball did not have a duty to ensure the
validity of the security interest and the appropriateness of
mortgagee         title       insurance         coverage,           were      not       clearly
erroneous.
         The e v i d e n c e i n d i c a t e d t h a t B a l l d i d n o t " d e l e g a t e " t o
Aetna a d u t y t o e n s u r e t h e a c c u r a c y o f t h e s e c u r i t y i n t e r e s t
and    a p p r o p r i a t e n e s s o f mortgagee t i t l e       insurance.           Rather,
Aetna     only      contracted         with      Ball       to    obtain      his     advisory
o p i n i o n a b o u t w h e t h e r o r n o t a v a l i d s e c u r i t y i n t e r e s t and
a p p r o p r i a t e mortgagee t i t l e      insurance existed,                and i f     not,
what    steps      to   take     to    achieve       a p p r o p r i a t e coverage.          The
D i s t r i c t Court t h u s d i d n o t abuse i t s d i s c r e t i o n i n f i n d i n g
that    Ball     had     fulfilled        all     those      duties       undertaken         and,
consequently,           in   holding         Ball     not        liable    for      breach      of
contract.         The judgment          of    t h e D i s t r i c t C o u r t -5S a f f i r m e d .
                                                                           '/



                                                        Justice.


W e concur:             //
