                                NO. 83-05
               IN THE SUPREME COURT OF THE STATE OF MONTANA

                                     1983



MAXINE KRONE, individually and as
Guardian Ad Litem for BRYAN KRONE,
a minor, and CRAIG KRONE,
                        plaintiff and Respondent,


REX T. McCANN, DOROTHY G. IJIcCAIJN,
and SUPERIOR HOMES, INC.,

                        Defendants and Appellants.




Appeal from:   District Court of the Fourteenth Judicial District,
               In and for the County of Musselshell,
               The Honorable LeRoy McKinnon, Judge presiding.

Counsel of Record:

      For Appellants:
               Hibbs, Sweeney, Colberg, Jensen   &   Koessler; William
               N. Jensen, Billings, Montana

      For Respondent :

               Craig R. Buehler, Montana Legal Services, Lewistown,
               Montana



                               Submitted on Briefs:    April 15, 1983
                                            Decided:    July 21, 1983


Filed:
         JUL 2 1 1983            t

         C



                               Clerk
Mr.   Justice Daniel J.   Shea delivered the Opinion of the
Court.
      Defendants Rex T. McCa.nn, Dorothy G. McCann and Superior
Home, Inc., appeal the amount of the attorney fee award they
received in Musselshell County District Court after the case
was remanded by this Court.     See Krone v. McCann, No. 7534
(Musselshell County, October 28, 1982).
      The sole issue is whether the District Court erred in

awarding defendants $7,500 in attorney fees instead of the
$17,759.50 prayed for.     We vacate and remand for another

hearing in the setting of attorney fees.
      On June 2, 1982, the District Court held a hearing on
attorney fees.    Defense counsel summarized the fee charged,
which ranged from $50 per hour to $65 per hour which was
multiplied by    the number of hours expended, 372.7 hours.
Plaintiffs' testimony at the hearing essentially consisted of
testimony as to their inability to pay attorney fees.
      The trial court issued the following order on costs and
attorney fees:
      "The Court finds:
      "1.   That the Plaintiff herein qualified for an
      attorney from Montana Legal Services; that no
      authority   has   been    presented   authorizing
      consideration of the ability to pay of a party.
      "2. That the Court has no dispute with the amount
      and character of the services rendered by the
      attorney.
      "3.   That the hourly fee cha.rged is probably in
      accord with the fees charged in the Billings area,
      but is somewhat in excess of the fees charged in
      the Roundup area.
      "4.   That there is no dispute as to the costs
      involved.
      "IT IS, THEREFORE, ORDERED That the Defendant
      recover costs herein in the amount of $1,457.40,
      and attorney fees in the amount of $7,500.00."
       Setting of an attorney fee must, of course, be based
upon competent evidence.            Petritz v. Albertsons, Inc. (1980),
       Mont.          ,   608 P.2d 1089, 1094, 37 St.Rep. 677, 682.
First Security Bank of Bozeman v. Tholkes (1976), 169 Mont.
422,    429, 547      P.2d       1328, 1331; Crncevich v.         Georgetown
~ecreationCorp. (1975), 168 Mon. 113, 120, 541 P.2d 56, 59.
       In Petritz, this Court in remanding an attorney fee
award stated:
       The record does not reveal whether plaintiff
       disputed the amount or descriptions of the services
       and expenses. Nor does there appear any rationale
       by  the trial court for the award or any
       consideration of plaintiff's financial ability to
       pay. The award appears to be nothing more than an
       arbitrary figure that the District Court selected.
       The only testimony of the plaintiffs during the hearing
was that they could not afford the fees requested after they
lost the case and were contractually obligated to pay one
attorney      fees.        The   trial court stated that we did not
consider defendant's inability to pay.                The trial court, with
no evidentary foundation, concluded that the hourly fee in
Billings is higher than that charged in Roundup (the situs of
the action). However, no evidence was presented as to what a
similar attorney in Roundup would have charged.                 The attorney
fee awarded appears to be nothing more than an arbitrary
figure the trial court selected.
       This Court has set forth criteria for the award of
attorney fees.        - First Nat. Bank in Eureka v. ~eckstrom
                      See,
(1982), Mont.,            651 P.2d 45, 47, 39 St.Rep. 1778, 1780-81;
Crncevich, 168 Mont. at 120, 541 P.2d at 59.                  Carkeek v. Ayer
(1980), Mont.,            613    P.2d   1013,    1015,   37   St.Rep.   1274,


       The attorney fee award is vacated and we remand the
cause    to    the    District Court       for    a   determination of     an
a t t o r n e y f e e b a s e d on t h e c r i t e r i a w e have s e t f o r t h i n c a s e

law.




W e Concur:
