If our contract gives only ONE side the right to recover attorney fees, will a Montana court still let the other side recover if it wins?
Yes: Montana statutorily converts a one-way contractual fee clause into a two-way one. § 28-3-704(1), MCA opens with its own carve-out, “Except as provided in subsection (2),” and then provides that whenever a contract entered into after July 1, 1971 gives “one party…an express right to recover attorney fees from any other party…in the event the party having that right brings an action upon the contract,” then “all parties to the contract…are considered to have the same right to recover attorney fees and the prevailing party in any action, whether by virtue of the express contractual right or by virtue of this section, is entitled to recover reasonable attorney fees from the losing party.” Montana courts apply this routinely: Jorgensen v. Trademark Woodworks confirms “Pursuant to § 28-3-704(1), MCA, this contractual right to attorney's fees is reciprocal,” and Kenyon-Noble Lumber Co. v. Dependant Foundations, Inc. says the same of a credit agreement that gave only the lumber yard a fee right, adding what the statute then does: “The effect of the statute in this case is to give a reciprocal right to attorney fees to Mark and DF Inc.”
The trap
The reciprocity statute only fires when Montana law governs the contract in the first place: pick another state's law and you may lose the override along with the protection it was meant to give the non-drafting party. Masters Group v. Comerica Bank held exactly that: “Because there is no authority to award attorney fees under the contract, and, as the contract is governed by Michigan law and therefore Montana’s reciprocal attorney fees statute, § 28-3-704(1), MCA, does not apply, the District Court was without legal authority” to award fees to the prevailing party. A second, narrower trap sits in subsection (2): for a contract negotiated between a private party and a party holding CONDEMNATION AUTHORITY over that private party's property, the condemning party is carved OUT of subsection (1) and cannot use the reciprocal right to recover fees from the losing private party in an action to enforce the contract.
5 authorities
- statuteMont. Code Ann. § 28-3-704enactment date not established
The words that state the rule
Except as provided in subsection (2), whenever, by virtue of the provisions of any contract or obligation in the nature of a contract made and entered into at any time after July 1, 1971, one party to the contract or obligation has an express right to recover attorney fees from any other party to the contract or obligation in the event the party having that right brings an action upon the contract or obligation, then in any action on the contract or obligation all parties to the contract or obligation are considered to have the same right to recover attorney fees and the prevailing party in any action, whether by virtue of the express contractual right or by virtue of this section, is entitled to recover reasonable attorney fees from the losing party or parties.
- statuteMont. Code Ann. § 28-3-704enactment date not established
The words that state the rule
For a contract or obligation negotiated between a private party and a party with condemnation authority over the private party's property, the party with condemnation authority is not entitled to recover attorney fees from the losing party or parties pursuant to subsection (1) in an action to enforce a contract or obligation involving the property.
The words that state the rule
Pursuant to § 28-3-704(1), MCA, this contractual right to attorney's fees is reciprocal.
The words that state the rule
Because there is no authority to award attorney fees under the contract, and, as the contract is governed by Michigan law and therefore Montana’s reciprocal attorney fees statute, § 28-3-704(1), MCA, does not apply, the District Court was without legal authority to award attorney fees.
- case2018 MT 308Kenyon-Noble Lumber Co. v. Dependant Foundations, Inc.Mont.decided 2018read it at the source ↗
The words that state the rule
Pursuant to § 28-3-704(1), MCA, this contractual right to attorney fees is reciprocal. The effect of the statute in this case is to give a reciprocal right to attorney fees to Mark and DF Inc.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.