DELAWARE v. K-DECORATORS, INC., 1999 MT 13

293 Mont. 97, 973 P.2d 818

No. 97-448.Supreme Court of Montana.Submitted on Briefs: April 9, 1998.
Decided: January 28, 1999.

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APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Robert W. Holmstrom, Judge presiding.

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For Appellant: Craig W. Holt, Billings.

For Respondent: Michael K. Rapkoch, Felt, Martin Frazier, Billings.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1. Frank Delaware (Delaware) appeals from a ruling made by theThirteenth Judicial District Court, Yellowstone County, on thepenalty provision of the Montana Wage Protection Act, from thecourt’s order denying Delaware’s Motion for a New Trial, and fromthe court’s order granting summary judgment to K-Decorators, Inc.(K-Decorators) on Delaware’s wrongful discharge claim.K-Decorators cross-appeals from the District Court’s orderawarding attorney fees to Delaware, from the court’s order denyingLee Judson’s (Judson) motion to dismiss Delaware’s claims againsthim, and from the court’s order imposing discovery sanctions onK-Decorators. We affirm in part, reverse in part, and remand forproceedings consistent with this opinion.

¶ 2. Delaware raises three issues on appeal, which we restate asfollows:
¶ 3. 1. Did the District Court err in ruling that Delaware couldonly recover a penalty pursuant to Montana’s Wage Protection Actfor wages which K-Decorators owed Delaware on his last day ofemployment which K-Decorators did not pay within three daysthereafter?
¶ 4. 2. Did the District Court err in denying Delaware’s Motion fora New Trial?
¶ 5. 3. Did the District Court err in granting summary judgment toK-Decorators on Delaware’s wrongful discharge claim?
¶ 6. K-Decorators raises three issues on cross-appeal, which werestate as follows:
¶ 7. 4. Did the District Court err in awarding attorney fees andcosts to Delaware?
¶ 8. 5. Did the District Court err in refusing to dismissDelaware’s claims against Judson, individually?
¶ 9. 6. Did the District Court err in imposing discovery sanctionson K-Decorators?

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Factual and Procedural Background ¶ 10. K-Decorators hired Delaware in the mid-1980s to sell homeimprovement construction projects. After Delaware worked for thecompany for approximately one year, K-Decorators fired him.Judson, K-Decorators’ president, rehired Delaware in the fall of1990 to manage the company’s sales staff. Delaware began workingfor K-Decorators for the second time on September 30, 1990.Delaware sold for K-Decorators and was responsible for generatingand training a sales staff. K-Decorators paid Delaware commissionsbased on his sales and on the sales which his sales staff made.Delaware was entitled to his commission when K-Decoratorscompleted a project and received payment for its work.

¶ 11. Delaware worked full-time as K-Decorators’ sales manager forapproximately three years. Judson testified that K-Decorators’sales volume “substantially increased” during Delaware’s tenure assales manager. Similarly, Delaware estimated that he increasedK-Decorators’ sales volume by 80 percent.

¶ 12. On September 20, 1993, Judson removed Delaware from the salesmanager position but offered to keep Delaware on as a salesman.Judson wrote Delaware a letter the following day which explainedthat Judson was reorganizing K-Decorators to “improve [the] bottomline results for the company.” Judson’s letter also explained thatthe sales manager position and the general manager position werebeing consolidated and that Judson’s brother Al was going to takeover the new position. The letter also reiterated Judson’s offerto keep Delaware on as a salesman. Delaware declined Judson’soffer.

¶ 13. On September 7, 1994, Delaware filed a complaint whichincluded claims against Judson individually. Count I of Delaware’sComplaint alleged that he had been discharged in violation ofMontana’s Wrongful Discharge from Employment Act. Count II ofDelaware’s Complaint alleged that K-Decorators owed him$146,271.99 for unpaid wages.

¶ 14. On September 30, 1994, K-Decorators filed a motion to dismisspursuant to Rule 12(b)(6), M.R.Civ.P. K-Decorators, however, didnot file a supporting brief with this motion. Consequently, theDistrict Court denied this motion to dismiss on October 18, 1994,pursuant to Rule 2(b), Unif.Dist.Ct.R., which provides that amotion is to be deemed without merit if the moving party does notfile a supporting brief within five days after filing the motion.On October 28, 1994, K-Decorators filed a second motion to dismisspursuant to Rule

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12(b)(6), M.R.Civ.P., and a supporting brief,which asserted that Judson was not a proper defendant sincecorporate officers cannot be held individually liable for actstaken on behalf of a corporation in furtherance of corporategoals, policies and business interests. The District Court deniedthis motion reasoning that Judson conceded that a motion todismiss for failure to state a claim for which relief can begranted on his behalf was without merit when he failed to file asupporting brief within five days after the first motion forfailure to state a claim was filed.

¶ 15. On November 16, 1994, Delaware filed a Motion to CompelDiscovery. In his supporting brief, Delaware stated thatK-Decorators had not answered his first set of interrogatories,requested the court to compel K-Decorators to answer theinterrogatories, and requested the court to award him his attorneyfees and costs for filing the motion. In response, K-Decoratorsfiled a brief on November 23, 1994, wherein it argued thatDelaware’s interrogatories violated Rule 33(a), M.R.Civ.P., andthus requested the District Court to deny Delaware’s Motion toCompel Discovery.

¶ 16. On December 13, 1994, the District Court issued an Orderwhich granted Delaware’s Motion to Compel Discovery and orderedK-Decorators to answer Delaware’s first set of interrogatorieswithin fifteen days. One month later, on January 13, 1995,Delaware filed a motion for sanctions pursuant to Rule 37(b)(2),M.R.Civ.P., and a supporting brief wherein he requested theDistrict Court to grant default judgment against K-Decoratorsbecause it did not comply with the District Court’s order toanswer his first set of interrogatories within fifteen days. Inthe alternative, Delaware requested the District Court to piercethe corporate veil so that all named defendants would be liable.Delaware also requested his attorney fees and costs for filing hismotion for sanctions.

¶ 17. The District Court held a hearing on Delaware’s motion forsanctions on March 1, 1995. Since K-Decorators’ attorneyacknowledged that Delaware’s interrogatories were not answeredwithin fifteen days of the court’s order dated December 13, 1995,the District Court sanctioned K-Decorators by awarding Delawarehis attorney fees and costs.

¶ 18. On May 3, 1995, K-Decorators filed an offer of judgmentpursuant to Rule 68, M.R.Civ.P., for $32,500. Delaware rejectedthe offer.

¶ 19. Delaware filed a Motion for Partial Summary Judgment pursuantto Rule 56, M.R.Civ.P., on January 31, 1996. Delaware argued that

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no genuine issue of material fact existed as to whetherK-Decorators owed Delaware unpaid wages nor whether K-Decoratorsdischarged Delaware. On February 6, 1996, K-Decorators filed aMotion for Partial Summary Judgment pursuant to Rule 56,M.R.Civ.P. K-Decorators asserted that no genuine issue of materialfact existed as to whether Delaware was constructively dischargednor whether K-Decorators had a legitimate business reason torestructure upper management and eliminate Delaware’s salesmanager position.

¶ 20. The District Court issued an Order on February 27, 1996,wherein it denied Delaware’s Motion for Partial Summary Judgmentand granted K-Decorators’ Motion For Partial Summary Judgment. Thecourt ruled that no issue of material fact existed as to whetherK-Decorators had a legitimate business reason for dischargingDelaware.

¶ 21. A jury trial was held April 1 through 4, 1996, on Delaware’sclaim for unpaid wages. At trial, both parties had accountantstestify as expert witnesses as to the amount of commissions whichK-Decorators owed Delaware based on the company’s books.K-Decorators introduced testimony and evidence that it madepayments on behalf of Delaware which Delaware did not pay back andthat Judson paid Delaware commission out of his personal checkingaccounts which were not recorded in K-Decorators’ books.K-Decorators argued that these amounts should be subtracted fromthe amount of commissions that K-Decorators’ books showed that thecompany owed Delaware. The jury returned a verdict for Delaware inthe amount of $1,185.14.

¶ 22. On August 5, 1996, Delaware filed a Motion for a New Trialpursuant to Rule 59, M.R.Civ.P., and § 25-11-102, MCA. In hissupporting brief, Delaware argued that the evidence presented attrial was insufficient to justify the jury’s verdict. On September30, 1996, the District Court denied Delaware’s Motion for NewTrial. The court pointed out that Delaware, in his supportingbrief, showed how the jury could have reached its verdict based onthe testimony and evidence admitted at trial.

¶ 23. On April 9, 1996, K-Decorators filed a Memorandum of Costspursuant to § 25-10-201, MCA, and attorney fees pursuant to §39-3-214, MCA. Delaware filed his Memorandum of Costs pursuant to§ 25-10-201, MCA, and attorney fees pursuant to § 39-3-214, MCA,on April 19, 1996. The District Court held a hearing on thesemotions on October 30, 1996. K-Decorators and Delaware eachpresented evidence and testimony as to reasonable attorney feesand costs. On

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December 26, 1996, the District Court issuedFindings of Fact, Conclusions of Law and Order wherein it ruledthat Delaware’s Memorandum of Costs was timely filed, ordered thatDelaware’s costs be taxed at $165, ordered that K-Decorators’costs be taxed at $314.50, awarded Delaware attorney fees in theamount of $10,000, and denied K-Decorators’ request for attorneyfees.

¶ 24. Delaware appeals from the District Court’s ruling on thepenalty provision of the Montana Wage Protection Act, from thecourt’s order denying his motion for a new trial, and from thecourt’s order granting summary judgment to K-Decorators onDelaware’s wrongful discharge claim. K-Decorators cross-appealsfrom the court’s order which awarded attorney fees to Delaware,from the court’s order denying K-Decorators’ motion to dismissJudson, and from the court’s order imposing discovery sanctions onK-Decorators.

Issue 1. ¶ 25. Did the District Court err in ruling that Delaware could onlyrecover a penalty pursuant to Montana’s Wage Protection Act forwages which K-Decorators owed Delaware on his last day ofemployment which K-Decorators did not pay within three daysthereafter?
¶ 26. At the beginning of the trial on Delaware’s unpaid wageclaim, the District Court ruled that, pursuant to §§ 39-3-205(1)and 39-3-206(1), MCA, Delaware could recover a penalty for wageswhich K-Decorators owed Delaware on his last day of employment butnot paid within three days thereafter. K-Decorators argues thatthe District Court erred in ruling that Delaware could recover apenalty pursuant to the Wage Protection Act because it does notprotect employees who are paid on a commission basis. Delawareasserts that the District Court erred in ruling that he could notrecover a penalty on wages which became due after his last day ofemployment at K-Decorators.

¶ 27. This Court’s standard of review of a district court’sconclusions of law is whether the court’s interpretation of thelaw is correct. Carbon County v. Union Reserve Coal Co., Inc.(1995), 271 Mont. 459, 469, 898 P.2d 680, 686 (citing Steer, Inc.v. Department of Revenue (1990), 245 Mont. 470, 474-75,803 P.2d 601, 603-04).

A. ¶ 28. Did the District Court err in ruling that the Montana WageProtection Act’s penalty provision applied in the instant case?

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¶ 29. K-Decorators argues that the District Court erred in rulingthat Delaware could recover a penalty because the Wage ProtectionAct does not apply since K-Decorators and Delaware mutually agreedthat Delaware would be paid on a commission basis. In effect,K-Decorators argues that the Wage Protection Act does not protectemployees who are paid on a commission basis. We disagree.

¶ 30. This Court’s function in construing and applying statutes isto effectuate the legislature’s intent. To determine legislativeintent, we first look to the plain meaning of the words used inthe statute. If the legislature’s intent can be determined by theplain language of the words used, we may not go further and applyother means of interpretation. It is only when the intent cannotbe determined from the language of the statute that we willexamine legislative history. Skinner Enterprises v. Board ofHealth (1997), 286 Mont. 256, 274, 950 P.2d 733, 744 (quotingThomas Brothers v. Cargill, Inc. (1996), 276 Mont. 105, 110,915 P.2d 226, 229).

¶ 31. In support of its argument that the Wage Protection Act doesnot protect employees who are paid on a commission basis,K-Decorators relies on this Court’s decision in McBride v. SchoolDist. No. 2 (1930), 88 Mont. 110, 290 P. 252. In that case, thisCourt looked to the legislative intent underlying the WageProtection Act and stated that Montana’s statute governing wagepayments and the statute mandating a penalty for failing to complywith the statute governing wage payments “were intended only toapply to the semi-monthly payment of wages due from all `employersof labor. . . .'” McBride, 88 Mont. at 117, 290 P. at 255 (citing§§ 3084 and 3085, RCM (1921)).

¶ 32. Notwithstanding this Court’s statement in McBride, we rejectK-Decorators’ argument because the plain language of the WageProtection Act, which has been substantially amended since McBridewas decided, shows that its broad scope covers employees who arepaid on a commission basis. Section 39-3-201(7), MCA, defines”wages” as

any money due an employee from the employer or employers, whether to be paid by the hour, day, week, semimonthly, monthly, or yearly and shall include bonus, piecework, tips, and gratuities of any kind.

(Emphasis added.) Since “wages” are “any money due an employee from an employer,” earned commissions fall within the Wage Protection Act’s definition of “wages.” Thus, the Wage Protection Act is sufficiently broad to protect employees who are paid on a commission basis.

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As a result, an employer who fails to pay an employee his or her earned commissions in accordance with the Wage Protection Act is subject to § 39-3-206(1), MCA, which provides that an employer who fails to pay an employee as provided by the Wage Protection Act must be assessed a penalty based on the amount of wages which are due and unpaid.

¶ 33. The policy underlying the Wage Protection Act also supportsour conclusion that it protects employees who are paid on acommission basis. In Como v. Rhines (1982), 198 Mont. 279, 285-86,645 P.2d 948, 951-52, this Court stated:

The policy of the [Wage Protection Act] is to aid an employee in the prompt collection of compensation due him and to discourage an employer from using a position of economic superiority as a lever to dissuade an employee from promptly collecting his agreed upon compensation. . . .

(emphasis added) (quoting State ex rel. Nilsen v. Oregon State Motor Assoc. (1967), 248 Or. 133, 432 P.2d 512, 515). Because commissions are one form of compensation, it is clear that this underlying policy supports our holding that the Wage Protection Act protects employees who are paid on a commission basis.

¶ 34. In sum, the Wage Protection Act’s plain language and itsunderlying policy show that it protects employees who are paid ona commission basis. Accordingly, we affirm the District Court’sruling that the Wage Protection Act applied in the case at bar.

B. ¶ 35. Did the District Court err in ruling that the Wage ProtectionAct only allowed Delaware to recover a penalty on commissionswhich K-Decorators owed Delaware on his last day of employment andnot paid within three days thereafter?
¶ 36. Delaware argues that the District Court erred in ruling thathe could only recover a penalty for wages which K-Decorators owedDelaware on his last day of employment which K-Decorators did notpay within three days. Delaware relies on our decision in Craverv. Waste Mgt. Partners of Bozeman (1994), 265 Mont. 37,874 P.2d 1, and argues that he was entitled to recover a penalty for wageswhich became due during the eighteen-month period after his lastday of employment with K-Decorators. We disagree.

¶ 37. Section 39-3-206(1), MCA, provides:

An employer who fails to pay an employee as provided in this part or who violates any other provision of this part is guilty of a

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misdemeanor. A penalty must also be assessed against and paid by the employer to the employee in an amount not to exceed 110% of the wages due and unpaid.[1]

Section 39-3-207, MCA, in turn, provides:

Any employee may recover all such penalties as are provided for the violation of 39-3-206 which have accrued to him at any time within 18 months succeeding such default or delay in the payment of such wages.

In Craver, we stated that § 39-3-207, MCA, is an eighteen-month statute of limitations. It is “the period of time in which an employee has to file a penalty claim against the employer.”Craver, 265 Mont. at 45, 874 P.2d at 5 (citing Pope v. Keefer
(1979), 180 Mont. 454, 591 P.2d 206, 213).

¶ 38. In the instant case, Delaware apparently contends thatK-Decorators violated § 39-3-205(1), MCA (1993), which providedthat “when an employee is separated from the employ of anyemployer, all the unpaid wages of the employee are due and payablewithin 3 days. . . .” In Craver, we explained that, since §39-3-205(1), MCA, requires an employer to pay a terminatedemployee’s unpaid wages within three days of termination, §39-3-207, MCA, requires a terminated employee to file a penaltyclaim within eighteen months after the third day following his orher termination. Craver, 265 Mont. at 45, 874 P.2d at 5. Delawareargues that we held in Craver that wages which have accrued duringthe eighteen-month period after an employee is terminated aresubject to the mandatory penalty in § 39-3-206(1), MCA. In Craver,however, we held that an employee has eighteen months after aclaim accrues to file a penalty claim against an employer.Craver, 265 Mont. at 45, 874 P.2d at 5. We were not faced with,and thus did not address, the issue of whether an employee mayrecover a penalty on wages which accrue after the employee isseparated from the employ of an employer. Consequently, Delaware’sreliance on Craver is misplaced.

¶ 39. Here, since Delaware was entitled to his commissions whenK-Decorators completed a project and received payment for itswork, some of Delaware’s commissions became due after his last dayof employment with K-Decorators. Section 39-3-205(1), MCA,however,

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only provides a rule regarding the payment of wages whichare due to an employee on his or her last day of employment. Itdoes not provide a rule regarding wages which become due after theemployee’s last day of employment. Thus, as the District Courtcorrectly reasoned, since § 39-3-201(7), MCA, states that “wages”are “any money due an employee,” K-Decorators could only bepenalized for violating § 39-3-205(1), MCA, for commissions whichwere due to Delaware on his last day of employment at K-Decoratorswhich were not paid within three days thereafter. K-Decoratorscould not be penalized pursuant to §§ 39-3-205(1) and 39-3-206(1),MCA, for commissions which became due after Delaware separatedfrom the employ of K-Decorators.

¶ 40. Accordingly, we affirm the District Court’s conclusion thatDelaware could only recover a penalty pursuant to §§ 39-3-205(1)and 39-3-206(1), MCA, for commissions which K-Decorators owedDelaware on his last day of employment and did not pay withinthree days thereafter.

Issue 2. ¶ 41. Did the District Court err in denying Delaware’s Motion for aNew Trial?
¶ 42. After the jury returned its verdict, Delaware filed a motionfor a new trial pursuant to Rule 59, M.R.Civ.P., and §25-11-102(6), MCA, on the basis that there was insufficientevidence to justify the jury’s verdict for $1,185.14. The DistrictCourt denied this motion reasoning that Delaware showed in hismotion how the jury could have reached its verdict based on thetestimony and evidence introduced at trial.

¶ 43. A district court may grant a motion for a new trial if thereis insufficient evidence to justify the jury’s verdict. Section25-11-102(6), MCA. The decision to grant or deny a new trial is inthe sound discretion of the district court judge and will not beoverturned unless there is a showing that the judge manifestlyabused that discretion. McGillen v. Plum Creek Timber Co.,1998 MT 193, ¶ 15, 994 P.2d 18, ¶ 15, 55 St.Rep. 808, ¶ 15 (citing Geigerv. Sherrodd, Inc. (1993), 262 Mont. 505, 508, 866 P.2d 1106, 1108and Henrichs v. Todd (1990), 245 Mont. 286, 291, 800 P.2d 710,713). If there is conflicting evidence on an issue, it is an abuseof a district court’s discretion to grant a new trial on thatissue on the basis that there is insufficient evidence to justifythe jury’s verdict. Thompson v. City of Bozeman (1997), 284 Mont. 440,442, 945 P.2d 48, 49 (citing Gass v. Hilson (1990), 240 Mont. 459,462, 784 P.2d 931, 933).

¶ 44. Our review of a district court’s denial of a motion for a newtrial on the grounds that the jury’s verdict was not supported bysubstantial evidence is limited; we review the verdict only todetermine

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whether substantial evidence exists to support it. SeeBuhr on Behalf of Lloyd v. Flathead County (1994), 268 Mont. 223,245, 886 P.2d 381, 394 (citing Weber v. State (1992), 253 Mont. 148,156, 831 P.2d 1359, 1364). See also C. Haydon Ltd. v. MontanaMin. Properties, Inc. (1997), 286 Mont. 138, 151, 951 P.2d 46, 54(stating that “[a]n attack upon a jury verdict as not supported bythe evidence is proper only when there is a complete absence ofany credible evidence in support of the verdict.”) We do not retrythe case to determine whether we agree or disagree with the jury’sverdict. See Barnes v. United Industry, Inc. (1996), 275 Mont. 25,33, 909 P.2d 700, 705. Moreover, we will consider all of theevidence and all of the inferences drawn therefrom in a light mostfavorable to the party arguing that the verdict should be upheld.C. Haydon Ltd., 286 Mont. at 151, 951 P.2d at 54.

¶ 45. In the instant case, the District Court denied Delaware’smotion reasoning that Delaware showed in his motion for a newtrial how the jury could have reached its verdict based on theevidence and testimony introduced at trial. Delaware asserts thatthe District Court “misse[d] the point” of his argument because heshowed that the jury improperly calculated its verdict based onthe testimony and evidence introduced at trial. In support of hisargument that the jury improperly calculated its verdict, Delawarepoints out that K-Decorators’ expert testified that the companyowed Delaware more than the amount that the jury awarded,K-Decorators’ attorney stated in his opening statement and in hisclosing argument that K-Decorators owed Delaware more than whatthe jury awarded Delaware, and that the District Court stated,after listening to K-Decorators’ opening statement, that the jury”will have to bring in a verdict of at least 7,000 some odddollars.”
¶ 46. In support of his argument, Delaware cites this Court’sdecision in Tappan v. Higgins (1989), 240 Mont. 158, 783 P.2d 396.In Tappan, the jury awarded plaintiff damages for past wage lossin an amount less than the amount that the defendant’s experttestified that the plaintiff lost. In addition, the jury did notaward the plaintiff damages for future wage loss even though theevidence introduced at trial clearly supported such an award andthat the jury’s verdict for medical expenses was unsubstantiatedby the evidence. In Tappan, we stated that “only in rare casesshould a jury verdict be set aside and a new trial granted.”Tappan, 240 Mont. at 160, 783 P.2d at 397. We also stated thatwhile the amount of damages awarded is within the province of thejury, it is not given carte blanche. Tappan, 240 Mont. at 160,

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783 P.2d at 397 (citing Sanders v. Mount Haggin Livestock Co. (1972),160 Mont. 73, 89, 500 P.2d 397, 406). Because there were “someglaring discrepancies” between the evidence introduced at trialand the jury’s verdict, we affirmed the grant of a motion for anew trial on the grounds that there was insufficient evidence tojustify the jury’s verdict. Tappan, 240 Mont. at 164,783 P.2d at 399.

¶ 47. Delaware contends that the case at bar is identical to thesituation in Tappan because K-Decorators introduced evidence andtestimony which showed that it owed Delaware more than the amountthat the jury awarded Delaware. Delaware points out thatK-Decorators’ expert witness testified that K-Decorators owedDelaware $68,112.58 for unpaid wages and that Judson’s testimonyestablished that K-Decorators owed Delaware an additional $1,000for an unpaid bonus. Delaware then explains that K-Decoratorsintroduced evidence and testimony that K-Decorators paid$27,079.42 on behalf of Delaware which he did not pay back andthat it paid Delaware $34,190 in commissions which were notrecorded in K-Decorators’ books. Thus, Delaware argues that, ifthe jury believed the entirety of K-Decorators’ presentation oftestimony and evidence, its verdict should have been at least$8,133.16. Delaware supports this conclusion by pointing out thatK-Decorators’ trial attorney argued to the jury in his closingargument to return a verdict for Delaware in the amount of$8,133.16.

¶ 48. Notwithstanding Delaware’s argument, the case at bar isunlike Tappan. In Tappan, our rationale for affirming the districtcourt’s decision that the verdict was not supported by theevidence was that the testimony and evidence overwhelminglydemonstrated that Tappan was entitled to damages in excess of thejury’s verdict. In the case at bar, however, the record shows thatconflicting testimony and evidence was admitted as to the amountof unpaid wages that K-Decorators owed Delaware. Even thoughK-Decorators’ expert witness testified that K-Decorators’ booksshowed that it owed Delaware $68,112.58 in unpaid wages,Delaware’s expert witness, Jerry Hansen (Hansen), testified thatK-Decorators’ books showed that it owed Delaware only $61,454.56for unpaid wages.

¶ 49. Delaware, however, contends that the jury improperlycalculated its verdict by improperly “mixing” the evidence andtestimony introduced at trial. Delaware states that the juryimproperly calculated its verdict by crediting K-Decorators twicefor money that it spent on a Lincoln Continental that Delawaredrove while he worked for K-Decorators. Delaware explains that thejury reached its verdict

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by adding the amount of wages that Hansen testified thatK-Decorators owed Delaware to the value of a bonus thatK-Decorators owed Delaware and then subtracting payments madeby K-Decorators on behalf of Delaware which he did not pay backand also subtracting commissions paid to Delaware which were notrecorded in K-Decorators’ books. Delaware contends that Hansentestified that he subtracted the payments that K-Decorators madefor the Lincoln Continental in his calculation of the wages thatK-Decorators owed Delaware. As a result, Delaware argues that thejury subtracted the payments made by K-Decorators for the car asecond time when it computed the amount that K-Decorators owedDelaware. Delaware therefore concludes that the jury’s verdict wasnot supported by substantial evidence.

¶ 50. Resolving conflicts in the evidence, judging the credibilityof the witnesses, and finding the facts, however, are actsuniquely within the province of the jury. Moore v. ImperialHotels, Corp., 1998 MT 248, ¶ 18, 967 P.2d 3832, ¶ 18, 55 St.Rep.1023, ¶ 18, (citing Durden v. Hydro Flame Corp., 1998 MT 47, ¶ 27,955 P.2d 160, ¶ 27, 55 St.Rep. 198, ¶ 27). Here, even though therecord shows that Hansen testified on cross-examination that hesubtracted out payments made on behalf of Delaware on the LincolnContinental when he computed the amount that K-Decorators owedDelaware, the record also shows that Hansen testified that, ratherthan subtracting out payments made on behalf of Delaware on thecar, he “refunded” $6,792.57 to Delaware for money that Delawarepaid on the car because Delaware argued that he should only beresponsible for twenty percent of the payments made on the carbecause he used the car eighty percent of the time for businesspurposes. Since Hansen’s testimony is apparently contradictory, itwas within the province of the jury to judge his credibility andresolve the conflicts in his testimony. Moreover, it was withinthe province of the jury to consider the entirety of the testimonyand evidence in determining the amount that K-Decorators owedDelaware; it was not bound to accept one party’s presentation oftestimony and evidence to the exclusion of the other party’spresentation. Thus, we conclude that the jury did not improperly”mix” the evidence and therefore that the record shows substantialevidence to justify the jury’s verdict.

¶ 51. Delaware also argues that the verdict was not supported bysubstantial evidence because K-Decorators’ attorney argued to thejury that K-Decorators owed Delaware more than the amount that thejury awarded. Statements of counsel, however, are not evidence.See

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State v. Ahto, 1998 MT 200, ¶ 35, 965 P.2d 240, ¶ 35, 55St.Rep. 851, ¶ 35. The record shows that K-Decorators argued tothe jury to accept its expert’s opinion concerning the amount thatK-Decorators owed Delaware. The jury, however, was not bound byK-Decorators’ expert’s opinion. Estate of Spicher v. Miller(1993), 260 Mont. 504, 508, 861 P.2d 183, 186. Thus, the verdictcannot be said to be unsupported by the evidence only becauseK-Decorators’ attorney argued to the jury to accept its expert’sopinion and award Delaware more than the amount that the juryeventually awarded.

¶ 52. In sum, having thoroughly reviewed the record of the trial,we conclude that there is substantial evidence to justify thejury’s verdict. The question is not what this Court would haveawarded. Rather, our review is limited to whether substantialevidence exists to support the jury’s verdict. Accordingly, weaffirm the District Court’s decision to deny Delaware’s Motion fora New Trial.

Issue 3. ¶ 53. Did the District Court err in granting summary judgment toK-Decorators on Delaware’s wrongful discharge claim?
¶ 54. The District Court granted K-Decorators summary judgment onDelaware’s wrongful discharge claim ruling that K-Decorators hadgood cause to discharge Delaware because restructuring thecompany’s management was a legitimate business reason. TheDistrict Court also ruled that K-Decorators’ decision torestructure its management was neither false nor a pretext todischarge Delaware. Delaware contends that the District Courterred in granting summary judgment to K-Decorators because therecord shows conflicting evidence as to whether K-Decoratorsproffered reason for discharging Delaware was false or pretextual.

¶ 55. Our standard of review in appeals from summary judgmentrulings is de novo. Motarie v. N. Mont. Joint Refuse Disposal(1995), 274 Mont. 239, 242, 907 P.2d 154, 156 (citing Mead v.M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785).Summary judgment is an extreme remedy which should not be asubstitute for a trial on the merits if a material factualcontroversy exists. Calcaterra v. Montana Resources, 1998 MT 187,¶ 9, 962 P.2d 590, ¶ 9, 55 St.Rep. 762, ¶ 9 (citing Montana MetalBuildings, Inc. v. Shapiro (1997), 283 Mont. 471, 474,942 P.2d 694, 696). Moreover, all reasonable inferences which can be drawnfrom the evidence presented should be drawn in favor of thenonmoving party. Calcaterra, ¶ 9 (citing Montana Metal Buildings,283 Mont. at 474, 942 P.2d at 696).

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¶ 56. When we review a district court’s grant of summary judgment,we apply the same evaluation as the district court based onRule 56, M.R.Civ.P. Bruner v. Yellowstone County (1995), 272 Mont. 261,264, 900 P.2d 901, 903. We set forth our inquiry in Bruner asfollows:

The movant must demonstrate that no genuine issue 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 matter of law. We review the 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).

¶ 57. To prevail under Montana’s Wrongful Discharge from EmploymentAct, §§ 39-2-901, et seq., MCA, employees must first prove thatthey were discharged within the meaning of the Act. Kestell v.Heritage Health Care Corp. (1993), 259 Mont. 518, 523-24,858 P.2d 3, 6. See also Clark v. Eagle Systems, Inc. (1996), 279 Mont. 279,284, 927 P.2d 995, 998 (stating that the Act only applies if anemployee was “discharged” or “constructively discharged”). Theemployee must then prove that the discharge was wrongful. Kestell,259 Mont. at 523-24, 858 P.2d at 6. A discharge is wrongful onlyif:

(1) it was in retaliation for the employee’s refusal to violate public policy or for reporting a violation of public policy;
(2) the discharge was not for good cause and the employee had completed the employer’s probationary period of employment; or
(3) the employer violated the express provisions of its own written personnel policy.

Section 39-2-904, MCA (emphasis added). The Act defines “good cause” as “reasonable job-related grounds for dismissal based on failure to satisfactorily perform job duties, disruption of the employer’s operation, or other legitimate business reason.” Section 39-2-903(5), MCA (emphasis added). A “legitimate business reason” is “a reason that is neither false, whimsical, arbitrary or capricious, and it must have some logical relationship to the needs of the business.” Buck v. Billings Montana Chevrolet, Inc. (1991), 248 Mont. 276, 281-82, 811 P.2d 537, 540.

¶ 58. An employee seeking to defeat an employer’s argument that theemployee was discharged for a legitimate business reason at thesummary judgment stage of wrongful discharge litigation must offerevidence upon which a fact-finder could determine that the reason

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given by the employer was false, whimsical, arbitrary orcapricious, or unrelated to the needs of the business. SeeKestell, 259 Mont. at 526, 858 P.2d at 8 (citing Cecil v.Cardinal Drillings Co. (1990), 244 Mont. 405, 797 P.2d 232). Seealso Mysse v. Martens (1996), 279 Mont. 253, 262, 926 P.2d 765,770 (stating that an employee seeking to defeat an employer’smotion for summary judgment on the issue of good cause must offerevidence that the employer’s given reason for the discharge is apretext and not the honest reason for the discharge) (citingCoombs v. Gamer Shoe Co. (1989), 239 Mont. 20, 778 P.2d 885 andCecil, 797 P.2d at 235). The employee cannot defeat theemployer’s motion for summary judgment by merely denying theemployer’s given reason or by speculation; he or she must showfacts sufficient to raise an issue to be decided by a fact-finder.Mysse, 279 Mont. at 262, 926 P.2d at 770 (citing Cecil,797 P.2d at 235).

¶ 59. K-Decorators cites Buck in support of its argument that ithad a legitimate business reason to discharge Delaware. In Buck,the new owner of a car dealership terminated the plaintiff’sgeneral manager position and replaced him with a person whom thenew owner had employed for a long period of time. The new ownerexplained that the plaintiff was discharged pursuant to a companypolicy which placed its long-term employees in charge of newlyacquired dealerships. Instead of offering evidence to dispute thenew owner’s explanation, the plaintiff argued that the employer’sexplanation was not adequate under the Act. This Court, however,affirmed the grant of summary judgment to the employer and heldthat the employer’s proffered reason was a legitimate businessreason. Buck, 248 Mont. at 283, 811 P.2d at 541. We stated that,under the facts before us, to conclude otherwise would “force thenew owner of a business to retain someone it did not know orperhaps even trust to manage a large dollar investment.” Buck,248 Mont. at 282-83, 811 P.2d at 541.

¶ 60. Unlike the plaintiff in Buck, however, Delaware does notargue that restructuring or reorganizing a business is not alegitimate business reason. Rather, he argues that the affidavitsthat he filed with his brief opposing K-Decorators’ motion forsummary judgment could lead a fact-finder to conclude thatK-Decorators’ proffered reason is false or pretextual. Afterreviewing the record, we agree with Delaware that these affidavitsraise a material issue of fact as to whether K-Decorators’proffered reason was false or pretextual. The record shows thatJudson testified that he removed Delaware from the sales managerposition as part of a plan to reorganize and

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restructure K-Decorators. Similarly, Al Judson testified that hemoved back to Billings to run K-Decorators as its general managerand to reorganize and restructure the “whole program” to make thecompany more efficient, cost effective, and profitable. Delaware,however, filed three affidavits with his brief opposing K-Decorators’motion for summary judgment from salesmen who continued workingfor K-Decorators after Delaware was removed as sales managerwherein each affiant stated that he saw few, if any, changes inthe sales department after Al Judson replaced Delaware as salesmanager. This testimony contradicts Al Judson’s testimony that heassumed K-Decorators’ general manager position to restructure the”whole program” and Judson’s testimony that he eliminatedDelaware’s sales manager position as part of a plan to restructureand reorganize K-Decorators. These affidavits are neither meredenial nor speculation; they are direct evidence that K-Decoratorsdid not restructure or reorganize. Therefore, these affidavits aresufficient to raise a factual issue as to whether K-Decoratorsdischarged Delaware as part of a bona fide managerialreorganization or whether K-Decorators’ proffered reason is falseor pretextual. Consequently, we hold that the District Court erredby granting K-Decorators summary judgment.

¶ 61. Accordingly, we reverse the District Court’s order grantingsummary judgment to K-Decorators on Delaware’s wrongful dischargeclaim and remand for further proceedings.

Issue 4. ¶ 62. Did the District Court err in awarding attorney fees andcosts to Delaware?
¶ 63. After the trial on Delaware’s claim for unpaid wages, bothparties filed memoranda of costs which included requests forattorney fees. Thereafter, the District Court conducted anevidentiary hearing on the parties’ requests for costs andattorney fees. Subsequently, the District Court ruled thatDelaware timely filed his memorandum of costs, taxed Delaware’scosts at $165, awarded him attorney fees in the amount of $10,000,and denied K-Decorators’ request for attorney fees. K-Decoratorsargues that the District Court erred in granting attorney fees toDelaware and in denying its request for attorney fees.

¶ 64. Because these issues concern questions of law, our review iswhether the court’s interpretation of the law is correct. CarbonCounty, 271 Mont. at 469, 898 P.2d at 686.

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A. ¶ 65. Did the District Court err in ruling that Delaware timelyfiled his memorandum of costs?
¶ 66. K-Decorators argues that Delaware is not entitled to hisattorney fees or costs because he did not timely file hismemorandum of costs. K-Decorators points to § 39-3-214, MCA, whichstates that attorney fees are to be taxed as costs, and contendsthat a party claiming attorney fees pursuant to § 39-3-214, MCA,must comply with § 25-10-501, MCA, which requires a party to fileand serve upon the adverse party a memorandum of costs within fivedays after the jury returns its verdict. Since Delaware did notfile his memorandum of costs within five days after the juryreturned its verdict, K-Decorators asserts that the District Courterred in awarding Delaware his attorney fees and costs. We agree.

¶ 67. Section 25-10-501, MCA, provides:

The party in whose favor judgment is rendered and who claims his costs must deliver to the clerk and serve upon the adverse party, within 5 days after the verdict or notice of the decision of the court or referee or, if the entry of the judgment on the verdict or decision be stayed, then before such entry is made, a memorandum of the items of his costs and necessary disbursements in the action or proceeding, which memorandum must be verified by the oath of the party, his attorney or agent, or the clerk of his attorney, stating that to the best of his knowledge and belief the items are correct and that the disbursements have been necessarily incurred in the action or proceeding.

(Emphasis added.) It is well-established that, in cases involving a jury trial, as opposed to a bench trial, this statute requires a party to file a memorandum of costs within five days after the jury returns its verdict. Kunst v. Pass, 1998 MT 71, ¶ 11, 957 P.2d 1, ¶ 11, 55 St.Rep. 289, ¶ 11. See also Rocky Mountain Ent. v. Pierce Flooring (1997), 286 Mont. 282, 300, 951 P.2d 1326, 1337
(citing R.H. Grover, Inc. v. Flynn Ins. Co. (1989), 238 Mont. 278, 777 P.2d 338) (“to claim costs under § 25-10-501, MCA, the plaintiffs had five days from the date of the jury verdict to file and serve upon the adverse party a verified memorandum of costs.”) A party who fails to file a timely memorandum of costs waives its right to receive its costs. See Cenex, Inc. v. Board of Com’rs for Yellowstone County (1997), 283 Mont. 330, 338, 941 P.2d 964, 968.

¶ 68. In the absence of a contractual agreement or specificstatutory authority, a prevailing party may not recover attorneyfees as costs. Selvidge v. McBeen (1988), 230 Mont. 237, 247,750 P.2d 429, 435

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(citing State ex rel. Wilson v. Department ofNatural Resources and Conservation (1982), 199 Mont. 189,648 P.2d 766, 769 and § 25-10-301, MCA). Accord § 25-10-201, MCA (statingwhich expenses a party may include in a bill of costs).

¶ 69. In Schillinger v. Brewer (1985), 215 Mont. 333, 697 P.2d 919,this Court addressed the issue of whether attorney fees were costsin a mechanic’s lien foreclosure action. In that case, the lieneeargued that costs included attorney fees. This Court disagreed andpointed out that the statutes which the lienee relied ondistinguished attorney fees from costs. Moreover, these statutesdid not “equate attorney fees with costs by any expressprovision.” Schillinger, 215 Mont. at 337, 697 P.2d at 922.Consequently, this Court held that attorney fees are not costs inmechanic’s lien foreclosure actions. Schillinger,215 Mont. at 337, 697 P.2d at 922.

¶ 70. In contrast, § 39-3-214, MCA, states that attorney fees are”to be taxed as part of the costs in [a Wage Protection Act case]”and that a judgment for a plaintiff in a Wage Protection Act case”must include all costs reasonably incurred in connection with theproceeding, including attorneys’ fees.” (Emphasis added.) Thesetwo provisions state that costs include attorney fees and thusprovide an exception to the general rule that costs do not includeattorney fees. Glaspey v. Workman (1988), 234 Mont. 374, 377,763 P.2d 666, 668. Therefore, unlike the statutes at issue inSchillinger, § 39-3-214, MCA, “equate[s] attorney fees withcosts” by express provisions. Consequently, a party seekingattorney fees pursuant to § 39-3-214, MCA, must comply with thestatutes governing the taxing of costs.

¶ 71. In the instant case, the jury returned its verdict on April4, 1996. Hence, pursuant to § 25-10-501, MCA, Delaware wasrequired to file his memorandum of costs on or before April 11,1996. See Rule 6(a), M.R.Civ.P. Delaware, however, did not filehis memorandum of costs until April 19, 1996. Because Delaware didnot timely file his memorandum of costs, he waived his right toreceive his costs which, under § 39-3-214, MCA, include attorneyfees. See Cenex, 283 Mont. at 338, 941 P.2d at 968.

¶ 72. Accordingly, we hold that the District Court erred in rulingthat Delaware timely filed his bill of costs and thus in awardingDelaware his costs and attorney fees. Therefore, we reverse andremand for further proceedings consistent with this opinion.

B. ¶ 73. Did the District Court err in denying K-Decorators’ requestfor attorney fees?

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¶ 74. K-Decorators argues that the District Court erred in grantingattorney fees to Delaware because Delaware was not the successfulparty because the jury’s verdict did not exceed the amount ofK-Decorators’ offer of judgment. For this same reason,K-Decorators asserts that it was the successful party and thusthat the District Court erred in denying its request for attorneyfees. Because we have held that Delaware is not entitled torecover attorney fees because he failed to timely file hismemorandum of costs, we will only address K-Decorators’ argumentthat the District Court erred in denying its request for attorneyfees.

¶ 75. In general, a prevailing litigant is not entitled to attorneyfees absent a specific contractual or statutory provision. Marshv. Overland (1995), 274 Mont. 21, 30, 905 P.2d 1088, 1093 (citingHowell v. State (1994), 263 Mont. 275, 868 P.2d 568, 574).Section 39-3-214(1), MCA, however, provides in pertinent part:

Whenever it is necessary for the employee to enter or maintain a suit at law for the recovery or collection of wages due as provided for by [the Wage Protection Act], a resulting judgment must include a reasonable attorney’s fee in favor of the successful party, to be taxed as part of the costs in the case.

¶ 76. K-Decorators argues that it was the successful partyunder § 39-3-214(1), MCA, because K-Decorators’ offer of judgmentwas $31,314.86 greater than the jury’s verdict for $1,185.14.Consequently, K-Decorators argues that the District Court erred indenying its requests for attorney fees.

¶ 77. An offer of judgment in an amount greater than the jury’sverdict is a factor that a court should consider when determiningwhich party is the successful or prevailing party for the purposeof attorney fees. Doig v. Cascaddan (1997), 282 Mont. 105, 113,935 P.2d 268, 272. Nevertheless, we reject K-Decorators’ argumentthat it was the successful party under § 39-3-214(1), MCA, becauseit is unclear from the record whether K-Decorators offered to havejudgment taken against it on Delaware’s unpaid wage claim or onhis wrongful discharge claim. Although K-Decorators’ offer ofjudgment states that it is offering to have judgment taken againstit “in the amount of $32,500 for [Delaware’s] wage claims” andcites the Wage Protection Act’s attorney fees provision, it alsostates that K-Decorators is offering to have judgment takenagainst it on Count I of Delaware’s Complaint which allegedwrongful discharge. Moreover, K-Decorators’ offer of judgmentstates that “[t]his offer is made without reference to, andwithout prejudice to, Plaintiff’s claims [for unpaid wages].”Because

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K-Decorators’ offer of judgment is ambiguous as to whetherit applied to Delaware’s unpaid wage claim or to his wrongfuldischarge claim, it is immaterial to determining which partyprevailed in the trial on Delaware’s claim for unpaid wages. Thus,we conclude that K-Decorators is not the successful party on thegrounds that the jury verdict did not exceed K-Decorators’ offerof judgment. Therefore, we hold that the District Court did noterr in denying K-Decorators’ request for attorney fees.

¶ 78. Accordingly, we affirm the District Court’s denial ofK-Decorators’ request for attorney fees.

Issue 5. ¶ 79. Did the District Court err in refusing to dismiss Delaware’sclaim against Judson, individually?
¶ 80. K-Decorators contends that the District Court erred when thecourt denied its second motion to dismiss wherein it moved todismiss Delaware’s claim against Judson individually.Specifically, K-Decorators argues that Rule 12(b), M.R.Civ.P.,required the District Court to treat its second motion to dismissas a motion for partial summary judgment and that the court shouldhave granted summary judgment in favor of Judson on the groundsthat a corporate officer cannot be personally liable for actstaken on behalf of the corporation in furtherance of corporategoals, policies and business interests. In response, Delawarepoints out that the parties stipulated before trial that Judson isa proper defendant. In spite of the stipulation, K-Decoratorsargues that Judson’s stipulation did not waive its right to appealthe issue of whether the District Court erred in denying itsmotion to dismiss Delaware’s claim against Judson individually. Wedisagree.

¶ 81. This Court will not address an issue on appeal concerning aquestion of law or fact which a party raises after stipulating tothat law or fact. Topco, Inc. v. State, Dept. of Highways (1996),275 Mont. 352, 358, 912 P.2d 805, 808 (citing Penn v. BurlingtonNorthern, Inc. (1980), 185 Mont. 223, 228, 605 P.2d 600, 603-4).See also Westland Enterprises, Inc. v. Boyne, USA, Inc. (1989),237 Mont. 186, 191, 772 P.2d 309, 312, (citing In re Marriage ofPrevost (1987), 225 Mont. 116, 731 P.2d 344).

¶ 82. In the instant case, the stipulation states that Judsonagreed that he was a proper party to the case. Even so,K-Decorators argues that Judson did not waive his right to appealthe District Court’s decision denying K-Decorators’ motion todismiss Delaware’s claim against Judson individually because thestipulation shows that Judson only agreed that he was a properdefendant to streamline the issues for trial. However, Judson’sreason for stipulating that he is a

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proper defendant in this caseis immaterial; we will not address an issue on appeal concerning aquestion of law or fact which a party raises after stipulating tothat law or fact regardless of the party’s reason for stipulating.Thus, by stipulating that he is a proper party to the case, Judsonwaived his right to appeal whether the District Court erred bydenying K-Decorators’ motion to dismiss Delaware’s claims againstJudson individually.

¶ 83. Accordingly, we will not address the issue of whether theDistrict Court erred in denying K-Decorators’ motion to dismissDelaware’s claims against Judson.

Issue 6. ¶ 84. Did the District Court err in imposing discovery sanctions onK-Decorators?
¶ 85. The District Court imposed discovery sanctions onK-Decorators pursuant to Rule 37(b)(2), M.R.Civ.P., for failing tocomply with the court’s order to serve answers to Delaware’s firstset of interrogatories within fifteen days of the date of theorder. Although K-Decorators acknowledges that it did not complywith the District Court’s order, it argues that the court abusedits discretion in imposing discovery sanctions.

¶ 86. This Court reviews a district court’s imposition of discoverysanctions to determine whether the court abused its discretion.McKenzie v. Scheeler (1997), 285 Mont. 500, 506, 949 P.2d 1168,1172 (citing Smith v. Butte/Silver Bow County (1996), 276 Mont. 329,916 P.2d 91, 93). See also Sullivan v. Sisters of Charity(1994), 268 Mont. 71, 77, 885 P.2d 488, 492 (citing Eisenmengerv. Ethicon, Inc. (1994), 264 Mont. 393, 402, 871 P.2d 1313, 1319).We generally defer to the district court’s decision “because thetrial court is in the best position to know whether parties aredisregarding the rights of opposing parties in the course oflitigation and which sanctions for such conduct are mostappropriate.” McKenzie, 285 Mont. at 500, 949 P.2d at 1172.

¶ 87. Since 1981, we have consistently stated that a party’s abuseof discovery procedures which results in unnecessary delay of acase should not be dealt with leniently. Morris v. Big SkyThoroughbred Farms, Inc., 1998 MT 229, ¶ 13, 965 P.2d 890, ¶ 13,55 St.Rep. 975, ¶ 13 (citing Owen v. F.A. Buttrey Co. (1981),192 Mont. 274, 278, 627 P.2d 1233, 1235). More to the point, we havestated that those who abuse the discovery rules should be punishedrather than encouraged repeatedly to cooperate in the discoveryprocess. McKenzie, 285 Mont. at 506, 949 P.2d at 1171 (citingSmith, 276 Mont. at 332, 916 P.2d at

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92-93). The policy behindjudicial intolerance of discovery abuses is the concern overcrowded dockets and the need to maintain fair and efficientjudicial administration of pending cases. McKenzie,285 Mont. at 506, 949 P.2d at 1171 (citing Smith, 916 P.2d at 92).

¶ 88. Rule 37, M.R.Civ.P., governs sanctions for failure to complywith discovery procedures. Rule 37(b)(2), M.R.Civ.P., provides inpertinent part that “[i]f a party . . . fails to obey an order toprovide or permit discovery, . . . the court in which the actionis pending may make such orders in regard to the failure as arejust. . . .” Moreover, Rule 37(b)(2), M.R.Civ.P., states that”[t]he court shall require the party failing to obey the order orthe attorney advising that party or both to pay the reasonableexpenses, including attorney’s fees, caused by the failure, unlessthe court finds that the failure was substantially justified orthat other circumstances make an award of expenses unjust.”(Emphasis added.)
¶ 89. In short, Rule 37(b)(2), M.R.Civ.P., is strict; a districtcourt must sanction those who disobey a discovery order byordering them to pay the other party’s reasonable expenses,including attorney fees, which arise because of the failure tocomply with a discovery order, unless the court finds that thefailure to comply with the order was substantially justified, orthat other circumstances make an award of expenses unjust. Theparty attempting to avoid Rule 37(b)(2), M.R.Civ.P., sanctions hasthe burden of proving that its failure to comply with the orderwas “substantially justified,” or that other circumstances makesuch an award unjust. See Hyde Drath v. Baker (9th Cir. 1994),24 F.3d 1162, 1171 (citing Falstaff Brewing Corp. v. MillerBrewing Co., (9th Cir. 1983), 702 F.2d 770, 784) (interpreting theidentical federal rule).

¶ 90. In the instant case, therefore, the District Court wasrequired to sanction K-Decorators for failing to comply with itsorder by awarding Delaware his reasonable expenses, includingattorney fees, unless K-Decorators proved that it wassubstantially justified in failing to comply with the court’sorder or that other circumstances made an award of reasonableexpenses unjust. Thus, our review in this case is whether theDistrict Court abused its discretion by not ruling thatK-Decorators’ failure to comply with the court’s order wassubstantially justified or that other circumstances made an awardof sanctions unjust.

¶ 91. K-Decorators argues that the District Court erred insanctioning K-Decorators for failing to comply with the court’sorder for several reasons. We construe K-Decorators’ arguments tobe that its failure to comply with the District Court’s order wassubstantially justified or that other circumstances existed thatmade the sanctions unjust.

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¶ 92. First, K-Decorators contends that the District Court shouldnot have sanctioned it because its response to Delaware’sinterrogatories was late because of the “rush of the Christmasseason and the crunch of counsel’s schedule.” This Court has held,however, that an attorney’s busy schedule does not constitute”excusable neglect” under Rule 5, M.R.Civ.P. In re Marriage ofBahm (1987), 225 Mont. 331, 333, 732 P.2d 846, 847-48. Similarly,an attorney’s busy schedule is not substantial justification forfailing to comply with a district court’s order nor is it acircumstance that makes an imposition of sanctions unjust underRule 37(b)(2), M.R.Civ.P. As stated by the First Circuit Court ofAppeals, “[m]ost attorneys are busy most of the time and they mustorganize their work so as to be able to meet the time requirementsof matters they are handling or suffer the consequences.” PineroSchroeder v. Federal National Mortgage Ass’n (1st Cir. 1978),574 F.2d 1117, 1118. In sum, neither the “rush” of the holiday seasonnor the “crunch” of K-Decorators’ attorney’s schedule constitutessubstantial justification for failing to comply with the DistrictCourt’s order nor are they circumstances which make the sanctionunjust.

¶ 93. Second, K-Decorators asserts that the District Court erred inimposing sanctions because its failure to comply with the court’sorder was not the result of an intentional disregard of Delaware’sdiscovery rights nor was the failure to comply an attempt toprevent discovery. In McKenzie, however, we ruled that a partyshould be sanctioned for an attitude of unresponsiveness to thediscovery process regardless of their intent behind that attitude.McKenzie, 285 Mont. at 508, 949 P.2d at 1172 (citations omitted).We also pointed out that refusing to provide discoveryunnecessarily delays cases and is the precise reason behind theavailability of sanctions pursuant to Rule 37, M.R.Civ.P.McKenzie, 285 Mont. at 516, 949 P.2d at 1177. BecauseK-Decorators’ intent behind its failure to comply with theDistrict Court’s order is immaterial and because its failure tocomply with the court’s order unnecessarily delayed the case,these proffered reasons are neither substantial justification forfailing to comply with the court’s order nor are theycircumstances which make the sanctions unjust.

¶ 94. Finally, K-Decorators contends that the District Court erredin imposing the sanctions because the delay was insignificant andbecause Delaware did not express an immediate need for answers.K-Decorators’ argument that the District Court erred in imposingsanctions because the delay was insignificant is without merit.The severity of a party’s failure to comply with a discovery orderis a factor

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that is to be considered only when determining anappropriate sanction under Rule 37(b)(2), M.R.Civ.P. See McKenzie,285 Mont. at 516, 949 P.2d at 1177-78. Rule 37(b)(2), M.R.Civ.P.,requires a district court to, at the least, sanction a party whohas disobeyed a discovery order by ordering that party to pay theother party’s reasonable expenses caused by the party’s failure tocomply with the discovery order. In the instant case, K-Decoratorsviolated a discovery order and received the lightest sanctionallowed by Rule 37(b)(2), M.R.Civ.P. Moreover, the severity of aparty’s failure to comply with a discovery order cannot constitutesubstantial justification for failing to comply with a districtcourt’s order nor is it, under the facts of the instant case, acircumstance which makes the sanctions unjust.

¶ 95. K-Decorators’ argument that it should not be sanctionedbecause Delaware never expressed an immediate need for the answersis equally without merit. Delaware did not need to askK-Decorators for the answers after the District Court orderedK-Decorators to answer the interrogatories. Thus, the fact thatDelaware did not express an immediate need for answers did notsubstantially justify K-Decorators’ failure to comply with theDistrict Court’s order nor is it a circumstance which makes thesanctions unjust.

¶ 96. In sum, Rule 37(b)(2), M.R.Civ.P., required the DistrictCourt to award Delaware his reasonable expenses, including hisattorney fees, caused by K-Decorators’ failure to comply with theDistrict Court’s order to answer Delaware’s first set ofinterrogatories within fifteen days of the date of the order,unless K-Decorators proved that its failure to comply with theorder was substantially justified or that other circumstances madean award of sanctions unjust. We conclude that K-Decorators didnot prove that it was substantially justified in disobeying theDistrict Court’s order nor did it prove that other circumstancesmade the sanctions unjust.

¶ 97. Accordingly, we affirm the District Court’s imposition ofdiscovery sanctions on K-Decorators pursuant to Rule 37(b)(2),M.R.Civ.P.

¶ 98. Affirmed in part, reversed in part, and remanded forproceedings consistent with this opinion.

JAMES C. NELSON

We Concur: J. A. TURNAGE, KARLA M. GRAY, WILLIAM E. HUNT, SR., W. WILLIAM LEAPHART

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