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                                                               No. 99-329

                          IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                              2000 MT 161

                                                             300 Mont. 268

                                                               3 P. 3d 641

                                           SPOONER CONSTRUCTION & TREE

                                                           SERVICE, INC.,

                                                       Plaintiff and Appellant,

                                                                      v.

                                            ERNIE MANER, d/b/a NORTHWEST

                                                           SOFT TRACKS,

                                                    Defendant and Respondent.

                           APPEAL FROM: District Court of the Fourth Judicial District,

                                               In and for the County of Missoula,

                                     The Honorable John W. Larson, Judge presiding.

                                                     COUNSEL OF RECORD:

                                                             For Appellant:

                                 Martin J. Elison, Attorney at Law, Missoula, Montana

                               Larry M. Elison, Attorney at Law, Gold Canyon, Arizona

                                                            For Respondent:


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                               Christian T. Nyrgren, Milodragovich, Dale, Steinbrenner &

                                                     Binney, Missoula, Montana

                                             Submitted on Briefs: February 3, 2000

                                                        Decided: June 20, 2000

                                                                    Filed:

                                    __________________________________________

                                                                    Clerk


Justice Jim Regnier delivered the opinion of the Court.

¶1 Spooner Construction & Tree Service, Inc., (Spooner) appeals from the judgment
entered in favor of Ernie Maner, d/b/a Northwest Soft Tracks, (Maner) by the Fourth
Judicial District Court, Missoula County. We affirm in part, reverse in part, and remand.

¶2 Spooner raises the following issues on appeal:

¶3 1. Did the District Court err when it amended and conclusively established a matter
contained in a request for admission as uncontested fact pursuant to Rule 36, M.R.Civ.P.?

¶4 2. Did the District Court err when it awarded Maner damages for lost profits?

¶5 3. Did the District Court abuse its discretion when it awarded attorney fees to Maner?

                              FACTUAL AND PROCEDURAL BACKGROUND

¶6 In the fall of 1995, Spooner, through its president James Spooner, entered into an oral
agreement with Maner to harvest timber pursuant to a contract Maner had with Plum
Creek. Spooner and Maner each agreed to supply two men and one piece of equipment to
the project and split the profits evenly.

¶7 During the timber harvest, Maner's skidder broke down and was taken to Spooner's
shop for repairs. Spooner allowed Maner to use its 1450B Case Crawler to continue to

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skid logs while Maner's skidder was being repaired. While in Spooner's shop, Spooner's
mechanic assisted Maner in obtaining the necessary parts and preparing the skidder for
repair. Since he was working at the Plum Creek timber harvest site during the day, Maner
could only work on the skidder in the evenings or on weekends so Spooner provided
Maner with a key to the shop. Once Maner received the necessary parts, he was able to
finish repairing the skidder, however, not before being snowed out of the Plum Creek job
for the winter.

¶8 After the job ceased for the winter, Maner paid Spooner for hauling the logs that had
been harvested. At that time, Maner informed Spooner that he could not pay Spooner's
share of the timber harvest until Maner received payment from Plum Creek.

¶9 Following a period of no contact with Maner, Spooner filed a mechanic's lien on
February 6, 1996, in the amount of $2150 for the repair work Spooner's mechanic
performed on Maner's skidder as well as for shop rental. Spooner was unable to locate
Maner to serve him with a copy of the lien and notice of the sheriff's sale of Maner's
skidder was published in the newspaper.

¶10 Robert Skiles of Liberty Logging, a logging contractor who had partnered with Maner
on some timber sales, saw the notice in the paper and told Maner about the sheriff's sale.
On March 15, 1996, Maner filed a Complaint in Justice Court in Missoula County to stop
the sale, to regain possession of his personal property located at Spooner's shop, and to
obtain payment for skidding and supervisory work performed for Spooner prior to the
Plum Creek harvest.

¶11 Also on March 15, 1996, Spooner filed a Complaint in District Court alleging that
Maner owed Spooner in excess of $23,000 for work on the Plum Creek contract, use of
Spooner's 1450B Case Crawler, and repair of Maner's skidder. Ancillary to the Complaint,
Spooner requested a writ of prejudgment attachment on Maner's skidder, trailer, and small
bus, which Maner had left at Spooner's shop. The District Court issued a writ of
prejudgment attachment on March 15, 1996. Pursuant to the writ, Spooner was ordered to
store Maner's property in a safe and reasonable manner free from all foreseeable waste or
damage until further order of the court.

¶12 On May 7, 1996, Maner filed an Answer and Counterclaim to Spooner's Complaint,
alleging that Spooner had breached their verbal agreement with regard to the Plum Creek
harvest; that Spooner had breached a previous agreement by failing to pay Maner for


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skidding and supervisory work provided on another project in September 1995; and that
Spooner had wrongfully attached his personal property. Prior to Maner's Answer and
Counterclaim, the parties engaged in negotiations for the discharge of the lien and the writ
of prejudgment attachment. As a result, Maner agreed to post a surety bond in the amount
of $2150 for the discharge and release of the mechanic's lien with the understanding that
the property would be released to Maner. Spooner agreed that the posting of the surety
bond was sufficient for the purpose of releasing the property.

¶13 On May 13, 1996, Spooner filed a notice stating that it had no objection and agreed to
dismissal of the writ of prejudgment attachment issued March 15, 1996. In this notice,
Spooner admitted no wrongful attachment, recognized that Maner had obtained
employment and may be damaged if deprived of the use of this equipment, and requested
that Maner maintain comprehensive insurance on the skidder with the District Court
named as beneficiary. On May 14, 1996, Maner filed a motion and brief to discharge the
writ of prejudgment attachment, which was granted by the District Court on May 15,
1996.

¶14 In August 1996 the parties stipulated to the dismissal without prejudice of the Justice
Court action filed by Maner. At the same time in the District Court action, the parties
agreed to the entry of a scheduling order, which established that discovery was to close on
January 17, 1997. Neither party conducted any discovery until Maner mailed
interrogatories, requests for admission, and requests for production of documents to
Spooner on December 16, 1996.

¶15 Spooner did not respond to these discovery requests. As a result, Maner filed a Notice
of Admission of Facts on January 21, 1997, on the ground that Spooner had failed to
respond to the requests for admission within 30 days. The requests for admission
automatically deemed admitted read as follows:

        1. Please admit that Defendant is entitled to Three Thousand Nine Hundred Twenty-
        Nine Dollars ($3929.00) from Plaintiff for the skidding and sawing of timber by
        Defendant for Plaintiff in September, 1995.

        2. Please admit that Defendant owes Plaintiff Two Thousand Seven Hundred
        Eighteen and 75/100 Dollars ($2,7018.75) [sic] for supervisory work which
        Defendant performed for Plaintiff in September, 1995.



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        3. Please admit that Defendant maliciously, and without probable cause, caused a
        Writ of Attachment to be issued and levied upon Defendant's property on March 15,
        1996.

        3. Please admit that Plaintiff has received all monies that it is entitled to received
        [sic] from Defendant from the Plum Creek contract.

        4. Please admit that Defendant does not owe Plaintiff money for rent for use of
        Plaintiff's 1450B Case crawler.


In addition, Maner deposed Spooner's president, James Spooner, on January 24, 1997.

¶16 After amendment of the scheduling order due to Spooner's counsel's medical
treatment out-of-state, which made no change to the discovery deadline, Maner filed a
motion for partial summary judgment based on the admitted facts. Shortly thereafter,
Spooner's counsel filed a motion to withdraw due to health reasons, which was granted.
Eventually, Spooner's new counsel filed a response brief opposing Maner's motion for
partial summary judgment.

¶17 After the motion had been fully briefed by the parties, the District Court conducted a
hearing on May 28, 1997. The District Court granted summary judgment in favor of
Maner on the issues resolved by the requests for admission, including Maner's claim for
punitive damages. At the hearing, Spooner filed a motion for leave to file discovery
responses, which the court deemed submitted on that date. On September 30, 1997, the
District Court issued its opinion and order denying Spooner's motion for leave to file
discovery responses.

¶18 On March 31, 1998, Maner filed another motion for partial summary judgment based
on the admitted facts with respect to the parties' remaining claims. Nearly one month later,
Spooner's counsel filed a motion to withdraw, which was ultimately granted. Spooner's
original counsel resumed representation of Spooner and filed a response to Maner's motion
for partial summary judgment.

¶19 After the motion had been fully briefed by the parties, the District Court conducted a
hearing on May 29, 1998, during which summary judgment was granted in favor of
Maner. At the close of the hearing, the District Court ordered Maner's counsel to prepare
an appropriate order, which was signed by the court on June 23, 1998. On the same date,

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the District Court entered a Preliminary Judgment in favor of Maner in the amount of
$71,524.06 (consequential damages of $50,000; attorney fees of $11,385; costs of
$139.06; and punitive damages of $10,000). The judgment also gave Spooner the
opportunity to object to the amount of damages within ten days, which Spooner did,
requiring a separate hearing to determine the amount of damages.

¶20 The District Court entered a Scheduling Order setting a bench trial for February 16,
1999, on the issue of damages. Subsequently, the District Court entered a Proposed
Pretrial Order, which was approved by the parties, and which was followed by the parties'
proposed findings of fact and conclusions of law. Following the one-day trial, the District
Court allowed the parties to submit supplemental findings of fact and conclusions of law.

¶21 Approximately three weeks after the bench trial, Spooner filed a motion for contempt
supported by a brief and affidavits, alleging that Maner had perjured his testimony during
the trial with respect to the amount of lost profits suffered due to the wrongful attachment
of his skidder. In response, Maner filed a brief along with an affidavit opposing Spooner's
motion for contempt.

¶22 On April 2, 1999, the District Court entered its Findings of Fact, Conclusions of Law,
and Judgment and Order Denying Motion for Contempt. The District Court awarded
Maner $82,600 in consequential damages plus attorney fees and costs. Spooner appealed
the District Court's judgment in favor of Maner and objected to the award of attorney fees
to Maner.

                                                  STANDARD OF REVIEW

¶23 Our standard of review in appeals from summary judgment rulings is de novo. See
Stanley v. Holms (1997), 281 Mont. 329, 332, 934 P.2d 196, 198. When we review a
district court's grant of summary judgment, we apply the same evaluation, based on Rule
56, M.R.Civ.P., as the district court. See Bruner v. Yellowstone County (1995), 272 Mont.
261, 264, 900 P.2d 901, 903. In Bruner, we set forth our inquiry:

        The movant must demonstrate that no genuine issues of material fact exist. Once
        this has been accomplished, the burden then shifts to the non-moving party to prove,
        by more than mere denial and speculation, that a genuine issue does exist. Having
        determined that genuine issues of fact do not exist, the court must then determine
        whether the moving party is entitled to judgment as a matter of law. We review the


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        legal determinations made by a district court as to whether the court erred.

Bruner, 272 Mont. at 264-65, 900 P.2d at 903 (citations omitted). Our standard of review of a district
court's findings of fact is whether the findings are clearly erroneous. See Daines v. Knight (1995), 269
Mont. 320, 324, 888 P.2d 904, 906.

¶24 "Our standard of review concerning a district court's ruling on a discovery matter is
whether the district court abused its discretion." McKamey v. State (1994), 268 Mont. 137,
145, 885 P.2d 515, 520. In addition, an award of attorney fees is within the discretionary
power of the district court. See Goodover v. Lindey's (1992), 255 Mont. 430, 449, 843
P.2d 765, 776. Accordingly, we review an award of attorney fees to determine whether the
district court abused its discretion. See Goodover, 255 Mont. at 449, 843 P.2d at 776-77.

                                                                 ISSUE 1

¶25 Did the District Court err when it amended and conclusively established a matter
contained in a request for admission as uncontested fact pursuant to Rule 36, M.R.Civ.P.?

¶26 Spooner alleges that the District Court erred when it amended Maner's requests for
admission without notice to Spooner and denied Spooner the opportunity to respond to the
amended requests for admission. Spooner also alleges that it did not have a duty to
respond to Maner's requests for admission because Maner had served discovery with
insufficient time to respond prior to the expiration of the discovery deadline.

¶27 Our review of the record reveals that Spooner's argument regarding its duty to respond
is being raised for the first time on appeal. We note that the transcripts, with respect to the
hearings on the motions for partial summary judgment, have not been submitted to this
Court. However, there is no mention of Spooner's "duty to respond" argument in any of
Spooner's motions or briefs or in any of the District Court's orders or minute entries.
Therefore, we decline to address this issue on appeal. See DeVoe v. State (1997), 281
Mont. 356, 365, 935 P.2d 256, 262.

¶28 Maner contends that the District Court did not err when it granted summary judgment
in favor of Maner based on the facts deemed admitted even though they contained errors.
Maner urges this Court to affirm the District Court's award of damages.

¶29 The District Court granted both Maner's motions for partial summary judgment at oral
argument. The transcripts of these hearings have not been provided to this Court. These

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motions were based on the facts deemed admitted as a result of Spooner's failure to
respond to requests for admission within 30 days.

¶30 In order for the District Court to grant summary judgment in favor of Maner, it had to,
sua sponte, amend two of the requests for admission. It amended Request for Admission
No. 2 to read that Spooner owed Maner $2718.75 for supervisory work Maner performed
for Spooner in September 1995. It also amended the first Request for Admission No. 3 to
read that Spooner maliciously, and without probable cause, caused a writ of attachment to
be issued and levied upon Maner's property on March 15, 1996.

¶31 Request for Admission No. 2, as written, provided that Maner owed Spooner
$2,7018.75 for supervisory work Maner performed for Spooner in September 1995. The
first Request for Admission No. 3, as written, stated that Maner maliciously, and without
probable cause, caused a writ of attachment to be issued and levied upon Maner's property
on March 15, 1996. In both requests as presented, Maner had mistakenly switched the
parties so that Spooner's unqualified admission would have indicated that Maner owed
Spooner the money and unlawfully attached the property rather than vice versa, a result
that Spooner would have no doubt been quite happy to admit. In addition, Request for
Admission No. 2 mistakenly represented the numerical amount claimed for supervisory
work to be $2,7018.75 rather than $2718.75.

¶32 With regard to requests for admission, Rule 36, M.R.Civ.P., provides:

        Rule 36(a). Request for admission. A party may serve upon any other party a
        written request for admission, for purposes of the pending action, only, of the truth
        of any matters within the scope of Rule 26(b) set forth in the request that relate to
        statements or opinions of fact or of the application of law to fact . . . .

        Each matter of which an admission is requested shall be separately set forth. The
        matter is admitted unless, within 30 days after service of the request, . . . the party to
        whom the request is directed serves upon the party requesting the admission a
        written answer or objection addressed to the matter, . . . .

        Rule 36(b). Effect of admission. Any matter admitted under this rule is
        conclusively established unless the court on motion permits withdrawal or
        amendment of the admission.



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Since May 1, 1990, Rule 36, M.R.Civ.P., has been identical to Rule 36, Fed.R.Civ.P. See
Rule 36, M.R.Civ.P., advisory committee's note to May 1, 1990, amendment.

¶33 A party's failure to respond to a request for admission within 30 days is automatically
deemed to be an admission of the matter set forth in the request for admission. See
American Tech. Corp. v. Mah (D. Nev. 1997), 174 F.R.D. 687, 689 (citing 8A Charles A.
Wright et al., Federal Practice and Procedure § 2259, at 549-50 (2d ed. 1994)). Pursuant to
Rule 36(b), M.R.Civ.P., "[a]ny matter admitted under this rule is conclusively established
unless the court on motion permits withdrawal or amendment of the admission." Ag Sales
v. Klose (1982), 199 Mont. 400, 404-05, 649 P.2d 447, 449 (emphasis added).

¶34 Here, on the motions for partial summary judgment by Maner, the District Court
amended Request for Admission No. 2 and the first Request for Admission No. 3. While
not technically motions to amend, Maner's motions for partial summary judgment required
amendment of the requests in order to support an award of summary judgment. The
District Court's amendment of Request for Admission No. 2 and the first Request for
Admission No. 3 nullified the matters contained in the requests as being conclusively
established. As such, Spooner should have been given an opportunity to respond to the
requests as amended by the District Court.

¶35 Accordingly, we conclude that the District Court abused its discretion when it denied
Spooner an opportunity to respond to the amended requests for admission. In addition, we
conclude that the District Court erred when it granted summary judgment in favor of
Maner based on the facts deemed admitted in the amended requests for admission.
Therefore, we reverse the portions of the District Court's award of summary judgment in
favor of Maner that correspond to the amended requests for admission.

¶36 Specifically, we reverse the District Court's award of $2718.75 to Maner for
supervisory work he performed for Spooner in September 1995; the District Court's award
of $82,600 to Maner based on Spooner's alleged wrongful attachment of Maner's skidder;
and the District Court's award of attorney fees and costs to Maner incurred in bringing the
wrongful attachment claim. Consequently, we remand this matter to the District Court for
further proceedings, consistent with this opinion, with regard to these issues.

¶37 With respect to the remaining portions of the District Court's award of summary
judgment, we have previously held that admissions obtained by way of Rule 36, M.R.Civ.
P., may demonstrate that there is no genuine issue of material fact, justifying entry of


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summary judgment under Rule 56, M.R.Civ.P. See Morast v. Auble (1974), 164 Mont.
100, 105, 519 P.2d 157, 160. Filing a late response to discovery is not a matter of right,
but lies within the trial court's discretion. See Easton v. Cowie (1991), 247 Mont. 181, 183,
805 P.2d 573, 574. Similar to our decision in Easton, we hold that the District Court, in
compliance with Rule 36(a), M.R.Civ.P., did not abuse its discretion by granting summary
judgment to Maner and denying Spooner's motion for leave to file responses to discovery
requests.

¶38 Accordingly, we affirm the District Court's award of $3929 to Maner for skidding and
sawing of timber performed for Spooner in September 1995; the District Court's
determination that Maner does not owe Spooner any rental fees associated with Maner's
use of Spooner's 1450B Case Crawler; the District Court's determination that Spooner is
not entitled to punitive damages for Maner's alleged breach of fiduciary duty; the District
Court's determination that Spooner's claim for repair work performed on Maner's skidder
is without merit and not justified by the evidence presented; and the District Court's
determination that Spooner has received all monies it is entitled to receive from Maner
with respect to the Plum Creek timber harvest contract.

¶39 Based on our resolution of Issue 1, we need not address Issues 2 and 3. Affirmed in
part, reversed in part, and remanded.


                                                              /S/ JIM REGNIER

                                                               We Concur:

                                                    /S/ JAMES C. NELSON

                                                /S/ WILLIAM E. HUNT, SR.

                                                /S/ TERRY N. TRIEWEILER

                                                      /S/ KARLA M. GRAY




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