Title: TOWN OF BOULDER v BULLOCK

State: montana

Issuer: Montana Supreme Court

Document:

No. 81-04 IN THE SUPREMF: COURT OF THE STATE OF MONTANA TOWN OF BOULDER, Plaintiff, Cross-Appellant, and Respondent, WILLIAM BULLOCK and SONJA BULLOCK, Defendants and Cross-Respondents and Appellants. Appeal from: District Court of the Fifth Judicial District, In and for the County of Jefferson. Honorable Nat Allen, Judge presiding. Counsel of Record: For Cross-Appellant: Allen Le Mieux, Boulder, Montana Harlen, Picotte & Thompson, Helena, Montana a - , - N m i m m - Submitted on briefs: June 17, 1981 Decided : 2 1 1 9 8 1 Filed: 2 1 @@' Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. The Town of Boulder f i l e d a complaint on February 6 , 1979, t o e n j o i n t h e Bullocks from c o n s t r u c t i n g t h e i r new b u i l d i n g on any p a r t of a c e r t a i n d e s i g n a t e d town s t r e e t . The Bullocks answered and a l s o f i l e d a cross-complaint f o r damages. The D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t , S t a t e of Montana, i n and f o r t h e County of J e f f e r s o n , d i s - missed t h e c o u n t e r c l a i m , e n t e r e d a judgment i n f a v o r of t h e Bullocks on t h e i n j u n c t i o n and t h e n denied t h e B u l l o c k s ' motion t o r e c o n s i d e r . The Bullocks appealed t h e e n t r y of judgment of d i s m i s s a l on t h e i r c o u n t e r c l a i m . T h i s C o u r t , by o r d e r d a t e d March 19, 1980, dismissed t h a t a p p e a l w i t h o u t p r e j u d i c e u n t i l a t r i a l on t h e m e r i t s of t h e Town's com- p l a i n t had been h e l d . T r i a l b e f o r e t h e p r e s i d i n g judge was h e l d on August 25, 1980. The D i s t r i c t Court e n t e r e d f i n d i n g s of f a c t and c o n c l u s i o n s of law and judgment i n f a v o r of t h e B u l l o c k s , r e f u s i n g t o g r a n t t h e i n j u n c t i o n . The Bullocks a p p e a l t h e d i s m i s s a l of t h e i r c o u n t e r c l a i m , and t h e Town of Boulder c r o s s - a p p e a l s t h e d e n i a l of an i n j u n c t i o n p r e v e n t i n g t h e b u i l d i n g of t h e s t r u c t u r e o r a f f i r m a t i v e r e l i e f r e q u i r i n g its removal. The Bullocks a r e owners of p r o p e r t y l o c a t e d i n t h e Consolidated Addition t o t h e Town of Boulder, which p r o p e r t y b o r d e r s on Main and L e s l i e S t r e e t s . The p r o p e r t y is t r a d i - t i o n a l l y known as t h e Linn Motel and c o n s i s t s of L o t s 9 through 19 of Block 48 of t h e Consolidated Addition. Some- time p r i o r t o September 1977 t h e Bullocks determined t o b u i l d a home and an o f f i c e on t h e p r o p e r t y . William Bullock attempted t o determine t h e boundaries of t h e p r o p e r t y . H e determined t h e boundary on L e s l i e S t r e e t by observing t h e p o s i t i o n of t h e l o t s and t h e s t a t e of p h y s i c a l f e a t u r e s of l o n g s t a n d i n g , i n c l u d i n g a boundary fence e r e c t e d b e f o r e t h e Bullocks purchased t h e p r o p e r t y . I n a d d i t i o n , he considered t h e power and t e l e p h o n e p o l e s and f a c i l i t i e s l o c a t e d on L e s l i e S t r e e t , n e a r b y p r o p e r t i e s l o c a t e d on L e s l i e S t r e e t and t h e p o s i t i o n of t h e used por- t i o n of L e s l i e S t r e e t . Bullock t e s t i f i e d t h a t he d i d n o t know where t h e edge of h i s p r o p e r t y was l o c a t e d , t h a t he d i d n o t g e t a surveyor t o come o u t and t h a t he l o c a t e d h i s b u i l d i n g by "eye-balling" t h e a r e a . He t e s t i f i e d t h a t he had seen survey p i n s on t h e boundary where t h e encroachment o c c u r r e d , b u t t h a t t h e y were gone a t t h e time he c o n s t r u c t e d t h e b u i l d i n g on t h e encroachment. He d i d n o t l o c a t e h i s p r o p e r t y l i n e with c e r t a i n t y , and he was u n c e r t a i n a s t o whether its l o c a t i o n was t o t a l l y w i t h i n h i s p r o p e r t y bound- a r i e s a t t h e t i m e of c o n s t r u c t i o n . Bullock made an a p p l i c a t i o n f o r a b u i l d i n g p e r m i t t o Kenneth W. T r e t t i n , t h e c i t y c l e r k and b u i l d i n g i n s p e c t o r of t h e Town of Boulder and t h e person a u t h o r i z e d t o i s s u e b u i l d i n g p e r m i t s by t h e Town. He was t o l d by T r e t t i n t h a t he would have t o submit a p l a n showing t h e l o c a t i o n and t h e dimensions of t h e proposed s t r u c t u r e t o r e c e i v e a b u i l d i n g p e r m i t . T r e t t i n t e s t i f i e d t h a t a t t h e time he, a s c i t y c l e r k and b u i l d i n g i n s p e c t o r , d i d n o t have d e t a i l e d knowl- edge of t h e boundaries of L e s l i e S t r e e t . The Bullocks sub- m i t t e d a p l a n which c o n s i s t e d of a drawing of t h e proposed s t r u c t u r e measured from t h e corner of an e x i s t i n g b u i l d i n g on t h e Bullock p r o p e r t y . T h i s method of measurement was s p e c i f i c a l l y approved by T r e t t i n . On September 2 6 , 1977, T r e t t i n issued a b u i l d i n g permit t o t h e Bullocks based upon t h e p l a n a s submitted. No survey of t h e Bullock p r o p e r t y was r e q u i r e d of t h e Bullocks a t t h a t t i m e . During t h e month of October 1977 t h e Bullocks o r d e r e d m a t e r i a l s , h i r e d c o n t r a c t o r s and completed t h e e x c a v a t i o n of t h e i r proposed home and o f f i c e , had t h e f o o t i n g s poured on t h e foundation and w a l l s , and had t h e f o u n d a t i o n w a l l s themselves poured. T h i s r e q u i r e d t h e e x p e n d i t u r e of s e v e r a l thousand d o l l a r s by t h e Bullocks. A d d i t i o n a l p r o g r e s s was made on t h e c o n s t r u c t i o n d u r i n g t h e remainder of 1977. There was no evidence showing t h a t d u r i n g t h i s p e r i o d of time anyone i n t h e Town of Boulder had any knowledge t h a t t h e b u i l d i n g being c o n s t r u c t e d by t h e Bullocks was encroach- ing upon L e s l i e S t r e e t . T h i s i n f o r m a t i o n d i d n o t occur u n t i l sometime i n June or J u l y 1978. During t h e e a r l y c o n s t r u c - t i o n p e r i o d i n 1978 t h e c i t y b u i l d i n g i n s p e c t o r attempted t o f i n d a c u r b box and i n t h e p r o c e s s measured from a s u r v e y p i n e i g h t y f e e t a c r o s s t h e s t r e e t . From t h a t p o i n t t h e b u i l d i n g i n s p e c t o r , T r e t t i n , s i g h t e d a c r o s s t h e Bullock p r o p e r t y . A t t h i s t i m e T r e t t i n assumed t h a t t h e Bullocks were b u i l d i n g i n t o t h e s t r e e t , and he s o informed t h e Bullocks. There was testimony a t t r i a l t h a t , w h i l e t h e Bullocks had no knowledge t h a t t h e y might be encroaching on L e s l i e S t r e e t w i t h t h e i r c o n s t r u c t i o n , T r e t t i n had d e t a i l e d knowl- edge of t h e boundaries of L e s l i e S t r e e t p r i o r t o i s s u i n g t h e b u i l d i n g permit on September 2 6 , 1977. During t h e s p r i n g of 1978 t h e Bullocks proceeded t o work on t h e basement f l o o r of t h e i r b u i l d i n g and T r e t t i n was a g a i n on t h e p r o p e r t y and p a r t i c u l a r l y a t t h e b u i l d i n g s i t e . A t t h o s e t i m e s he made no mention of t h e a l l e g e d encroachment. However, a s noted above, t h e b u i l d i n g i n s p e c t o r i n J u l y 1978, i n a t t e m p t i n g t o f i n d t h e c u r b box, f e l t t h a t t h e b u i l d i n g was o u t on t h e s t r e e t and s o informed t h e Bullocks. On J u l y 24, 1978, William Bullock a t t e n d e d t h e r e g u l a r meeting of t h e c i t y c o u n c i l and informed t h e c o u n c i l t h a t T r e t t i n had t o l d him t h a t he might be b u i l d i n g i n t o L e s l i e S t r e e t . Bullock f u r t h e r t o l d t h e c o u n c i l t h a t he was w i l l i n g t o have a survey made. The minutes of t h e c o u n c i l meeting show t h a t t h e members of t h e c o u n c i l r e p r e s e n t e d t o Bullock t h a t , i f he were b u i l d i n g i n t o t h e s t r e e t , t h e y would never make a man t e a r down h i s house. Bullock t e s t i f i e d t h a t a t t h a t t i m e he had i n mind a p r e v i o u s a c t i o n by t h e c i t y c o u n c i l i n October 1977 when they c l o s e d twenty f e e t o f a s t r e e t a b u t t i n g t o t h e n o r t h of h i s p r o p e r t y a t t h e b e h e s t of a Mr. R a n d a l l , t h e n a member of t h e c i t y c o u n c i l . I n r e l i a n c e upon t h e r e p r e s e n t a t i o n s of t h e members of t h e c i t y c o u n c i l and w i t h h i s knowledge of t h e Randall m a t t e r , Bullock proceeded w i t h a d d i t i o n a l work on h i s b u i l d i n g . By August 14 t h e B u l l o c k s had completed t h e basement f l o o r , which was poured by a member of t h e c i t y c o u n c i l . S h o r t l y a f t e r August 14, 1978, a s a r e s u l t of a c i t y c o u n c i l meeting h e l d on t h a t d a t e , Bullock was i n s t r u c t e d by T r e t t i n t o c e a s e c o n s t r u c t i o n u n t i l h i s survey was submitted t o t h e c i t y c o u n c i l . Bullock d i d c e a s e c o n s t r u c t i o n , and on August 28, a t another r e g u l a r meeting of t h e c i t y c o u n c i l , he submitted h i s survey. The survey i n d i c a t e d t h a t t h e B u l l o c k s ' b u i l d i n g was, i n f a c t , occupying approximately e i g h t e e n f e e t of t h e n o r t h p o r t i o n of L e s l i e S t r e e t . I t is important t o note h e r e t h a t t h e s t r e e t s , a s l a i d o u t i n t h i s a d d i t i o n , were e i g h t y f e e t wide. On August 28, 1978, a t a meeting of t h e c i t y c o u n c i l , B u l l o c k ' s survey was r e c e i v e d . The t h e n c i t y a t t o r n e y was i n s t r u c t e d t o do what was n e c e s s a r y t o t a k e c a r e of t h e B u l l o c k s ' problem w i t h r e g a r d t o t h e s t r e e t . Both William Bullock and t h e a c t i n g c i t y a t t o r n e y t e s t i f i e d t h a t t h e y took t h e i n s t r u c t i o n s of t h e c i t y c o u n c i l t o mean t h a t t h e c i t y a t t o r n e y was t o proceed w i t h l e g a l r e s e a r c h t o d e t e r - mine a l a w f u l method by which t h e Bullocks would be allowed t o keep t h e i r b u i l d i n g where it was, and i n p a r t i c u l a r , t o a l l o w them t o occupy a p o r t i o n of L e s l i e S t r e e t on which t h e encroachment e x i s t e d . The c i t y a t t o r n e y , i n f a c t , proceeded on t h a t b a s i s and s o t e s t i f i e d a t t r i a l . Relying on t h e s e r e p r e s e n t a t i o n s and t h e a c t s of t h e c i t y c o u n c i l a s an a u t h o r i z a t i o n t o proceed, Bullock testi- f i e d t h a t he p u t up t r u s s e s and o t h e r elements of t h e wood p o r t i o n o f t h e b u i l d i n g a t v a r i o u s times u n t i l a b o u t September 12, 1978. A f t e r a c i t y c o u n c i l meeting of which Bullock was n o t g i v e n n o t i c e , he was informed by T r e t t i n t h a t t h e Town now r e q u i r e d him t o t e a r down h i s b u i l d i n g and remove it from L e s l i e S t r e e t . No a c t i o n was ever t a k e n by t h e Town t o revoke t h e o r i g i n a l b u i l d i n g permit i s s u e d t o t h e Bullocks, and t h e Bullocks a t a l l t i m e s r e l i e d upon t h e b u i l d i n g permit and t h e a c t s and t h e s t a t e m e n t s of t h e c i t y c o u n c i l a s a u t h o r i z a t i o n t o proceed w i t h t h e i r c o n s t r u c t i o n . The D i s t r i c t Court r e f u s e d t o g r a n t an i n j u n c t i o n a g a i n s t f u r t h e r c o n s t r u c t i o n and r e f u s e d t o g r a n t t h e Town of Boulder its r e q u e s t f o r a f f i r m a t i v e r e l i e f t o r e q u i r e t h e removal t h e B u l l o c k s t s t r u c t u r e . W e affirm that judgment. A s a p p e l l a n t s , t h e Bullocks r a i s e one i s s u e : Whether t h e D i s t r i c t Court e r r e d i n g r a n t i n g t h e Town of B o u l d e r ' s motion t o d i s m i s s t h e i r c o u n t e r c l a i m f o r f a i l u r e t o s t a t e a c l a i m upon which r e l i e f could be g r a n t e d . A s c r o s s - a p p e l l a n t , t h e Town of Boulder r a i s e s two a d d i t i o n a l i s s u e s : (1) Whether t h e c o u r t e r r e d i n holding t h e Town estopped from claiming an i n j u n c t i o n o r r e q u i r i n g t h e removal of t h e B u l l o c k s ' b u i l d i n g i n s o f a r a s it en- croached upon L e s l i e S t r e e t i n t h e Town of Boulder; and ( 2 ) whether t h e c o u r t e r r e d i n f a i l i n g t o g r a n t an i n j u n c t i o n r e q u i r i n g t h e removal of t h e B u l l o c k s ' b u i l d i n g i n s o f a r a s it encroached upon any p o r t i o n of L e s l i e S t r e e t . W e w i l l f i r s t t u r n t o t h e i s s u e s on c r o s s - a p p e a l , whether t h e c o u r t e r r e d i n o r d e r i n g t h e Town of Boulder estopped from claiming an i n j u n c t i o n from f u r t h e r con- s t r u c t i o n or r e q u i r i n g t h e removal of d e f e n d a n t s ' b u i l d i n g i n s o f a r a s it encroached upon t h e p o r t i o n of L e s l i e S t r e e t and whether t h e c o u r t f u r t h e r e r r e d i n r e f u s i n g t o a u t h o r i z e an i n j u n c t i o n r e q u i r i n g t h e removal of d e f e n d a n t s ' b u i l d i n g from Leslie S t r e e t . The Town of Boulder a r g u e s t h a t it is undisputed t h a t a c i t y or town h a s t h e power t o p r e v e n t t h e o b s t r u c t i o n of its s t r e e t s , c i t i n g s e c t i o n 7-14-4102, MCA, which p r o v i d e s : "The c i t y o r town c o u n c i l h a s t h e power t o : (1) Regulate and p r e v e n t t h e . . . o b s t r u c t i o n of s t r e e t s . . . by . . . any o b s t r u c t i o n . " T h e Town d e n i e s t h a t t h e r e was any conduct on its p a r t which would p e r m i t t h e D i s t r i c t Court t o invoke t h e d o c t r i n e of e q u i t a b l e e s t o p p e l and p r e v e n t t h e Town from e x e r c i s i n g its s t a t u t o r y r i g h t t o remove t h e o b s t r u c t i o n from t h e s t r e e t . W e do n o t a g r e e . The law governing the application of equitable estoppel as it applies to municipal corporations is dis- cussed and set forth by this Court in two cases. City of Billings v. Pierce Packing Co. (1945), 117 Mont. 255, 161 P.2d 636; State ex rel. Barker v. Stevensville (1974), 164 Mont. 375, 523 P.2d 1388. As argued by the Town of Boulder, this Court noted in Stevensville that the great weight of authority holds that a municipal corporation is not bound by acts or statements of its agents or officers made in excess of their authority, even where a third party relied thereon to his detriment. However, we further noted in Stevensville that there are exceptions to that rule. Such exceptions are to be applied with great caution and only in exceptional cases. We find this to be just such a case. This Court stated in City of Billings v. Pierce Packing Co., 117 Mont. "The general rule is that equitable estoppel is applied to municipal corporations with great caution and only in exceptional cases. 'While the doctrine of equitable estoppel is sometimes invoked in what are termed "excep- tional cases," it is always applied, and wisely so, with much caution to municipal corporations in matters pertaining to their governmental functions . . . There is greater reason why city streets should not be subject to destruction by nonuse or adverse posses- sion than can be found applicable to any other kind of property. No other kind of public property is subject to more persistent and insidious attacks or is less diligently guarded against seizure.' McQuillan, Muni- cipal Corporations, Vol. 4, Sec. 1515, and supporting cases." Here, the District Court in its Conclusion of Law No. 4 noted : "The elements necessary to make out a case for the application of the Doctrine of Equitable Estoppel are succinctly set forth in the case of City of Billings v. Pierce Packing Co., 117 Mont. 266, 161 P.2d 636. Those elements a r e a s follows: (1) There must be c o n d u c t - - a c t s , l a n g u a g e , o r s i l e n c e - - amounting t o a r e p r e s e n t a t i o n o r a conceal- ment of f a c t s . ( 2 ) These f a c t s must be known t o t h e p a r t y estopped a t t h e time of h i s s a i d conduct, o r a t l e a s t t h e c i r c u m s t a n c e s must be such t h a t knowledge of them is n e c e s s a r i l y imputed t o him. ( 3 ) The t r u t h concerning t h e s e f a c t s must be unknown t o t h e o t h e r p a r t y claiming t h e b e n e f i t of t h e e s t o p p e l , a t t h e time when it was a c t e d upon by him. ( 4 ) The conduct must be done w i t h t h e i n t e n - t i o n , o r a t l e a s t w i t h t h e e x p e c t a t i o n , t h a t it w i l l be a c t e d upon by t h e o t h e r p a r t y , o r under such circumstances t h a t it is both n a t u r a l and probable t h a t it w i l l be s o a c t e d upon. ( 5 ) The conduct must be r e l i e d upon by t h e o t h e r p a r t y , and t h u s r e l y i n g , he must be l e d t o a c t upon it. ( 6 ) H e must i n f a c t a c t upon it i n such a manner a s t o change h i s p o s i t i o n f o r t h e worse; i n o t h e r words, he must s o a c t t h a t he would s u f f e r a l o s s i f he were compelled t o s u r r e n d e r o r f o r e g o o r a l t e r what he h a s done by reason of t h e f i r s t p a r t y being p e r m i t t e d t o r e p u d i a t e h i s con- d u c t and t o a s s e r t r i g h t s i n c o n s i s t e n t w i t h it." The D i s t r i c t C o u r t , i n its f i n d i n g s of f a c t and c o n c l u s i o n s of law, went on t o n o t e t h a t T r e t t i n , t h e c i t y c l e r k , had s u f f i c i e n t knowledge, a s both c i t y c l e r k and b u i l d i n g i n s p e c t o r , t o have a s c e r t a i n e d t h e boundaries of t h e p r o p e r t y i n q u e s t i o n and t h a t T r e t t i n was on t h e p r o p e r t y f o r a p e r i o d of n e a r l y a year b e f o r e t h e a c t i o n of t h e c i t y c o u n c i l was t a k e n . The c o u r t f u r t h e r noted t h e c o u n c i l ' s r e p r e s e n t a t i o n t o t h e Bullocks and its i n s t r u c - t i o n s t o t h e c i t y a t t o r n e y t o t a k e c a r e of t h e B u l l o c k s ' problems a t t h e c i t y c o u n c i l meeting on August 28, 1978. The judge found t h a t t h e s e a c t s and many o t h e r s c o n s t i t u t e d a r e p r e s e n t a t i o n o r concealment of m a t e r i a l f a c t s . W e a g r e e w i t h t h e D i s t r i c t Court t h a t t h e f a c t s a r e s u f f i c i e n t t o deny t h e Town's r e q u e s t f o r removal of t h e s t r u c t u r e . I n p a r t i c u l a r t h e judge found: t h a t t h e b u i l d i n g permit c o n s t i t u t e d an a u t h o r i z a t i o n t o proceed and a repre- s e n t a t i o n t h a t t h e p l a n s submitted by t h e Bullocks were p r o p e r ; t h a t t h e a c t s and r e p r e s e n t a t i o n s of t h e c i t y c o u n c i l c o n s t i t u t e d a r e p r e s e n t a t i o n r e a s o n a b l y t a k e n by t h e Bullocks a s a u t h o r i z a t i o n t o proceed w i t h t h e i r c o n s t r u c t i o n a f t e r t h e presence of t h e encroachment was d i s c o v e r e d ; and t h a t , according t o t h e testimony of t h e former mayor of t h e Town, s h e , and i n her o p i n i o n o t h e r members of t h e c o u n c i l , intended t o r e q u i r e t h e removal of t h e s t r u c t u r e a s e a r l y a s J u l y 24, 1978, b u t d i d n o t communicate t h i s i n t e n t i o n t o t h e Bullocks. The i s s u e s r a i s e d by t h e Bullocks on appeal i n v o l v e t h e d i s m i s s a l of t h e i r c o u n t e r c l a i m . A s p r e v i o u s l y n o t e d , t h e Town of Boulder brought an a c t i o n t o e n j o i n d e f e n d a n t s ' encroachment on t h e c i t y s t r e e t , and d e f e n d a n t s answered by g e n e r a l d e n i a l and a s s e r t e d a c o u n t e r c l a i m a g a i n s t t h e Town. The Town r e p l i e d by a motion t o d i s m i s s and s t r i k e t h e c o u n t e r c l a i m which t h e c o u r t g r a n t e d . A t no time d i d d e f e n d a n t s amend t h e i r c o u n t e r c l a i m . The c a s e went t o t r i a l on t h e Town's c l a i m f o r an i n j u n c t i o n . The c o u r t h e l d t h a t t h e Town was estopped from p r e v e n t i n g d e f e n d a n t s ' encroach- ment. The t o t a l e f f e c t of t h e proceeding t h u s f a r h a s been t o j u d i c i a l l y allow t h e encroachment and t o deny t h e claimed damages. W e a r e confronted w i t h t h e b a s i c i s s u e of whether t h e c o u n t e r c l a i m s t a t e s a c l a i m upon which r e l i e f c a n b e g r a n t e d . S t r i p p e d down t o t h e e s s e n t i a l s , t h e d e f e n d a n t s ' c o u n t e r c l a i m is v e r y n e a r l y an a s s e r t i o n t h a t because t h e Town f i l e d t h e s u i t , d e f e n d a n t s have been damaged. The c o u n t e r c l a i m can be d i v i d e d i n t o t h r e e c o u n t s . The f i r s t count a l l e g e s n e g l i g e n t conduct g i v i n g r i s e t o something l i k e an e s t o p p e l , a l t h o u g h t h e term " e s t o p p e l " is n o t used, t h a t t h e c o u n c i l by its a c t i o n l e d t h e Bullocks i n t o changing t h e i r p o s i t i o n t o t h e i r d e t r i m e n t . I t f u r t h e r a l l e g e s a v i o l a t i o n of d e f e n d a n t s ' c o n s t i t u t i o n a l r i g h t t o due p r o c e s s with r e s p e c t t o a p r o p o s a l o r a t t e m p t t o pur- chase a p o r t i o n of t h e s t r e e t right-of-way i n t h a t defen- d a n t s were n o t given n o t i c e of any proposed s a l e which was a l l e g e d l y on t h e agenda of t h e c o u n c i l a t t h e time t h i s t r o u b l e o c c u r r e d . The second count a l l e g e s t h a t t h e Bullocks were v i c t i m s of d i s c r i m i n a t i o n by t h e Town. I t lists i n d i v i d u a l s whose s t r u c t u r e s encroach on v a r i o u s s t r e e t right-of-ways and a l l e g e s t h a t t h e Town, having allowed o t h e r encroach- ments, is u n l a w f u l l y d i s c r i m i n a t i n g a g a i n s t d e f e n d a n t s by a t t e m p t i n g t o remove d e f e n d a n t s ' encroachment. The t h i r d count a l l e g e s t h a t t h e Town i s s u e d a b u i l d i n g permit t o t h e d e f e n d a n t s and u n l a w f u l l y misrepre- s e n t e d t o them t h e y could l e g a l l y b u i l d a s t r u c t u r e on t h e i r p r o p e r t y and t h a t d e f e n d a n t s r e l i e d t o t h e i r d e t r i m e n t on t h e m i s r e p r e s e n t a t i o n s . I n each count t h e Bullocks claimed damages a s a r e s u l t of t h e Town's conduct. The Bullocks have a l l e g e d l y s u f f e r e d " h u m i l i a t i o n , f r u s t r a t i o n , p u b l i c r i d i c u l e , l o s s of b u s i n e s s r e p u t a t i o n , m e n t a l a n g u i s h and m o r t i f i c a t i o n . " They a l s o c l a i m t h a t i f t h e y were r e q u i r e d t o remove t h e i r b u i l d i n g , t h e y would be e n t i t l e d t o t h e sum of $22,500 a s a c o s t of removal. A s noted above, t h a t i s s u e has been de- c i d e d i n t h e i r f a v o r . Defendants f u r t h e r c l a i m damages of $450 per month f o r l o s s of r e n t and t h e i n a b i l i t y t o c l o s e down a motel s t r u c t u r e . Defendants prayed, among o t h e r t h i n g s , f o r t h e items of damage mentioned and f o r a t t o r n e y f e e s . The Town's motion t o d i s m i s s was made p u r s u a n t t o Rule 1 2 ( b ) ( 6 ) , M.R.Civ.P., which r e a d s i n p e r t i n e n t p a r t a s f o l l o w s : " ( b ) How p r e s e n t e d . Every d e f e n s e , i n law o r f a c t , t o a c l a i m f o r r e l i e f i n any p l e a d i n g , whether a c l a i m , c o u n t e r c l a i m , cross-claim, or t h i r d p a r t y c l a i m , s h a l l be a s s e r t e d i n t h e r e s p o n s i v e p l e a d i n g t h e r e t o i f one is r e q u i r e d , e x c e p t t h a t t h e f o l l o w i n g d e f e n s e s may, a t t h e o p t i o n of t h e p l e a d e r , be made by motion: . . . ( 6 ) f a i l u r e t o s t a t e a c l a i m upon which r e l i e f can be g r a n t e d . . ." The Bullocks argue t h a t t h e i r complaint f o r damages should n o t have been d i s m i s s e d and r e l y on Duffy v. B u t t e T e a c h e r s ' Union No. 332, AFL-CIO ( 1 9 7 5 ) , 168 Mont. 246, 541 P.2d 1199, where t h i s C o u r t , speaking t o a motion t o d i s m i s s , s t a t e d : "A motion t o d i s m i s s f o r f a i l u r e t o s t a t e a c l a i m upon which r e l i e f can be g r a n t e d , Rule 1 2 ( b ) ( 6 ) , M.R.Civ.P., i s e q u i v a l e n t t o a d e m u r r e r u n d e r f o r m e r c i v i l p r o c e d u r e . [ C i t a t i o n o m i t t e d . ] A motion t o d i s m i s s admits t o a l l f a c t s w e l l pleaded and i n c o n s i d e r i n g t h e motion t h e m a t e r i a l a l l e g a - t i o n s of t h e p l e a d i n g a t t a c k e d a r e taken a s t r u e . [ C i t a t i o n o m i t t e d . I Where a complaint s t a t e s f a c t s s u f f i c i e n t t o c o n s t i t u t e a cause of a c t i o n upon any t h e o r y , t h e n t h e motion t o d i s m i s s must be o v e r r u l e d . [ C i t a t i o n omit- t e d . ] " 168 Mont. a t 252-253, 541 P.2d a t 1202-1203. Defendants c i t e a l s o a s a u t h o r i t y t o t h i s holding B u t t r e l l v. McBri.de Land and L i v e s t o c k ( 1 9 7 6 ) , 170 Mont. 296, 553 P.2d 407. Thus, i n arguing a g a i n s t t h e d i s m i s s a l of t h e i r c o u n t e r c l a i m below, t h e Bullocks a r g u e t h a t c e r t a i n assump- t i o n s must be made: f i r s t , a l l f a c t s s e t f o r t h i n t h e c o u n t e r c l a i m a r e assumed t r u e ; second, a l l t h e s e f a c t s a r e t o be read and i n t e r p r e t e d i n f a v o r of t h e Bullocks; and t h i r d , t h a t t h e g r a n t i n g of a motion t o d i s m i s s is h e l d i n d i s f a v o r u n l e s s t h e a l l e g a t i o n s i n t h e c o u n t e r c l a i m a f f i r m a - t i v e l y demonstrate t h a t no a c t i o n l i e s and t h e motion should be denied. Whether t h e Town's c o n d u c t is c h a r a c t e r i z e d a s n e g l i g e n c e o r is c h a r a c t e r i z e d a s c o n t a i n i n g m i s r e p r e s e n t a - t i o n s , w e f e e l makes l i t t l e d i f f e r e n c e . The e s s e n c e of t h e c l a i m s is t h a t t h e y were m i s l e d by t h e conduct of t h e Town t o t h e i r d i s a d v a n t a g e . T h i s Court h a s h e l d r e c e n t l y i n Adams v. Adams ( 1 9 7 9 ) , - Mont. , 604 P.2d 332, 334, 36 St.Rep. 2374, 2377, a s t o e q u i t a b l e e s t o p p e l : ". . . To i t e r a t e , f o r e q u i t a b l e e s t o p p e l t o e x i s t , t h e r e must be: (1) a f a l s e r e p r e s e n t a - t i o n or a concealment of f a c t s , ( 2 ) made w i t h t h e knowledge, a c t u a l o r c o n s t r u c t i v e , of t h e f a c t s , ( 3 ) t o a p a r t y w i t h o u t knowledge o r means of knowledge of t h e f a c t s , ( 4 ) w i t h t h e i n t e n t i o n t h a t it should be a c t e d upon and ( 5 ) r e l i a n c e on t h e f a l s e r e p r e s e n t a t i o n t o h i s o r her p r e j u d i c e by t h e o t h e r . . ." The D i s t r i c t Court d i d n o t e r r i n d i s m i s s i n g t h e counter- claim. Affirmed. / W e concur: