Title: STATE EX REL STATE HIGHWAY COMM v

State: montana

Issuer: Montana Supreme Court

Document:

No, 12209 IN THE SUPREME COURT OF THE STATE OF MONTANA 1972 THE STATE OF MONTANA, on the Relation of the State Highway Commission of the State of Montana, Rela tor, THE DISTRICT COURT OF THE THIRTEENTH JUDICIAL DISTRICT OF THE STATE OF MONTANA, IN AND FOR THE COUNTY OF STILLWATER, and THE HONORABLE JACK D . SHANS'I'ROM, Presiding District Judge, ORIGINAL PROCEEDING: Counsel of Record: For Relator : William T, Kelly argued, Billings, Montana, Daniel J, Sullivan.argued, Helena, Montana. For Respondents: Richard J, Carstensen argued, Billings, Montana, - - - Submitted: March 17, 1972 Decided : d ~ c b 2 7 1 9 n Clerk M r . Chief Justice James T. Harrison delivered the Opinion of the Court. This i s an original proceeding. Relator, Montana State Highway Commission, seeks an appropriate w r i t t o require the respondent d i s t r i c t court t o vacate and annul that portion of i t s order of January 28, 1972, fixing October 24, 1971, a s the date for determining the actual value of the condemned property for the measure of compensation of the interests therein of defendant Robert Lawrence Fradet. The condemnation action involved i s cause No, 4033, pending i n the d i s t r i c t court of Stillwater County, entitled: "The State of Montana, acting by and through the State Highway Commission of the State of Montana, Plaintiff, vo. Gerald R. Fradet, Robert Lawrence Fradet, Evalyn L, Fradet, F i r s t National Park Bank of Livingston, and William E . Buell, e t a l . , De- fendant s . I I Upon the f i l i n g of the application, counsel was heard ex parte. Thereafter an order was issued requiring respondent court t o be and appear before t h i s Court on a day certain and show cause why an appropriate w r i t should not be granted. From the record it appears the condemnation action herein- before entitled was instituted by the f i l i n g of the complaint in the d i s t r i c t court on January 19, 1968, and a l i s pendens was f i l e d the same day with the clerk and recorder of Stillwater County. Copy of the complaint was served on Gerald R. Fradet, a t that time the admitted owner of the property, on January 25, 1968 and summons was served on him January 31, 1968. O n the same dates, Robert Lawrence Fradet, the father of Gerald R. Fradet, was also served with a copy of the complaint and summons, Evalyn Fradet, mother of Gerald R. Fradet, was served with the complaint and summons on January 23, 1968. O n February 7, 1968, the three Fradets filed a motion t o dismiss, motion t o s t r i k e , motion for a more definite statement, and a statement of defendants' claims, These motions were heard by the district court on February 26, 1968, and on March 8, 1968, the court entered its findings of fact and concusions of law in favor of the Fradets, because of the failure of the Highway Commis- sion to negotiate or offer to purchase a parcel of the land sought to be condemned, An appeal was taken by the Highway Commission to this Court and the decision of the district court was reversed on March 11, 1969. The district court was ordered to strike its findings of fact and conclusions and enter a preliminary order of condemnation, State Highway Commission v, Fradet, 152 Mont. 436, 451 P,2d 826, It should be noted here that in their motion to dismiss, Fradets alleged that because of failure to serve a copy of the complaint with copy of the summons upon two of them, the court lacked jurisdiction and there was an insufficiency of service of process, At the hearing on defendants' February 7, 1968, motions, the district court went into the matter of this service, The Highway Commission contended that it should make no difference if the summons and complaint were served separately, as long as they were served before the twenty day statutory period. It further contended that there had been no special appearance by defendants for the purpose of contesting jurisdiction; that an answer was filed at the same time and that would constitute a waiver of any special appearance since the new civil rules do not apply to eminent domain actions. Discussion was had between court and counsel which concluded with this comment by the judge: "The Court, I think, must hold that this does not constitute such a fatal defect as to deprive this Court of jurisdiction of the cause," Thus, the district court agreed with the Commission that service of complaint and summons on separate dates, yet prior to the statutory twenty day notice for hearing, was not a viola- tion of the service requirements of section 93-9909, R . C . M , 1947. The procedural history of this action subsequent to our March 11, 1969 opinion reversing the district court is complex and need not be recited here in its entirety. However, certain of those proceedings should be set forth as necessary background for the present application. On May 25, 1971, the Highway Commission moved "the [district] Court for an order determining and fixing a definite date with re- spect to which compensation shall be assessed prior to setting a date for a Commission's Hearing * * *." By order of July 14, 1971, the district court found: " 5 . Neither Defendant GERALD R . FRADET or ROBERT L. FRADET were (sic) ever validly sewed with Summons by delivery of a copy of both the Summons and Complaint on them at the same time as is re- quired by Section 93-9909, R.@,M, 1947." It then ordered: "* * *that it cannot now fix the date for the determination of values for any Defendants other than the Defendants EVALYN L. FRADET and the Defendant FIRST NATIONAL PARK BANK OF LIVINGSTON, for the reason that the Plaintiff has not yet made a vali cervice of Summons in this condemna- tion action 7 0 % a y of the other Defendants named in the Complaint as required by statute and not on any additional Defendants the Plaintiff may pro- propose to add to this action and on whom no Summons has yet been issued. " The "additional Defendants" which the July 14 court order contemplates being added to the present action by plaintiff Highway Commission would include holders of outstanding bonds sold by the now defunct Columbus Irrigation District in 1919 and 1920. The tract which is the subject of this condemnation action was included within the boundaries of the Columbus Irrigation District at the time the bonds were sold. Only one such bond was ever paid and there now remain outstanding bonds in the total principal amount of $10Q,Q00. Among the alleged remaining assets of the Columbus Irrigation District is the lien of the bond assessment on the subject real property. As a result of the bond sale, Civil Case No. 2527 was commenced on May 31, 1940, entitled: "The National Park Bank of Livingston, a corporation, and William E, Buell, Plaintiffs, vs. (among other defendants) The State of Montana, Stillwater County, and Columbus Irrigation District, a corporation, Daniel Nice, and a11 other persons, as defendants. 1 t This action is still pending in the district court of the thirteenth judicial district, Stillwater County. Due to this action and to the alleged possible lien rights of all persons purchasing the outstanding irrigation district bonds, it is argued that a great number of defendants or their executors and administrators, whose identities are unknown, may have a lien of assessment, a claim, or an encumbrance of record against the real property involved in this condemnation action. The Commission alleges the district court order of July 14, 1971, places an additional duty on the state to quiet title against all such persons who might claim a lien on the property subject to this condemnation action. The July 14 order also precluded the setting of a date for determination of values due to the purported invalid service of summons upon Robert L. Fradet and others. By motion dated and served October 28, 1971, defendant Robert L . Fradet attempted to "acknowledge service of Summons in this action J ; * * for the purposes of establishing the date upon which the value of his interest in such property must be fixed * * *." The motion specified October 28, 1971, as the "acknowledged" date of service. I t also renewed the Fradets' motion that the district court appoint condemnation commissioners and fix a date for the condemnation hearing, The Commission then moved the district court in December 1971 to quash and strike the ~radets' acknowledgment of service motion and t o establish a date i n January 1968 as the proper date for valuation, The Commission made further e f f o r t s t o have a 1968 date established for valuation purposes by moving the d i s t r i c t court f ~ r summary judgment and for the taking of judicial notice of certain records showing Fradets' voluntary submission t o the court's jurisdiction. In response t o the various motions f i l e d by the Commission and the Fradets, the court ruled on January 28, 1972, that the plaintiff Commission nominate a condemnation commissioner and further ruled that because defendant Robert L. Fradet had then f i l e d h i s acknowledgment of service, as t o that defendant the date of determining the actual value of the property would be October 24, 1971. The record also shows that on January 28, 1972, the d i s t r i c t court entered a separate order dismissing Gerald R. Fradet as a defendant i n the action a s of January 20, 1972, The order stated that such di-smissal would not have any affect on any claimed service of process made on Gerald R. Fradet prior t o t h i s date. W e note here that at the time t h i s action was f i l e d Gerald R. Fradet was the record owner of the r e a l property which is the subject of t h i s condemnation action. Gerald R. Fradet remained fee owner of the t r a c t u n t i l M a y 1, 1970, when he executed a quitclaim deed conveying the subject t r a c t back t o h i s father, defendant Robert Lawrence Fradet. I n answering t h i s Court's order of February 18, 1972, requiring respondents t o appear and show cause, respondents moved on March 14, 1972, t o dismiss the order because the application 11 does not s t a t e facts sufficient t o warrant the issuance of such Order." Respondent d i s t r i c t court acknowledged that it had stayed a l l proceedings i n Civil Cause No. 4033, Stillwater County, pending further order of t h i s Court. The issues to be determined here are basically three: ( 1 ) Is this a proper case for the use of the writ of supervisory control, as was issued by order of this Court dated February 18, 1972? ( 2 ) What date shall be used for the purpose of assessing compensation for all property actually taken and for determining the basis of depreciation in value of property not taken, but injuriously affected? (3) Should the Highway Commission be required in an eminent domain action to bring a quiet title action against all parties who have possible liens or encumbrances upon the land subject to condemnation; in other words, should the Commission be required to name or interplead any additional parties as defendants in this action? Examining the first issue, we find that the criteria for the use of the extraordinary writ of supervisory control are well established in Montana law. Basic authority for its use is found in Article VIII, Section 2, of the Montana Constitution, which grants this Court "general supervisory control over all inferior courts* * * " . Section 3 of the same Article, though not specifically enumerating the supervisory writ, grants the Court power to issue and hear "such other original and remedial writs as may be necessary or proper to the complete exercise of its appellate jurisdiction. 11 Rule 1 7 ( a ) , M.R,App,Civ.P., provides for the use of original and remedial writs " * * *under conditions making due consideration in the trial courts and due appeal to this court an inadequate remedy, or when supervision of a trial court other than by appeal is deemed necessary or proper." It should be noted that Rule 1, M.R.App.Civ.P., does not enumerate any appeal procedure, other than appeal from final judgment which could be utilized by relator Highway Commission under the circumstances of this case. Montana case law further defines the c r i t e r i a for the use of the writ. I n State ex re1,Whiteside v. District Court, Mont . t h i s Court stated one of the functions of the writ i s t o control the course of l i t i g a t i o n i n the inferior courts when: "[They] by a mistake of law, or willful dis- regard of it, are doing a gross injustice, and there i s no appeal, or the remedy by appeal i s inadequate, I I To the same effect, see State ex r e l . City of Helena v. Helena W.W.Co,, 43 Mont, 169, 115 P. 200. This Court further stated i n State ex rel. Thelen v. District Court, 93 Mont. 149, 156, 17 P.2d 57, that application for the w r i t i s timely i f made: "* * * within a reasonable time a f t e r the action sought t o be remedied was taken. II The facts and circumstances of each particular case a r e determina- tive of timeliness. I n State ex r e l , Regis v. p i s t r i c t Court, 102 Mont, 74, 77, 55 P.2d 1295, the Court said the writ may also be employed: "* * *.to prevent 'extended arid needless liti- gation. ll The facts here show that two orders of the d i s t r i c t court dated July 14, 1971 and January 28, 1972, a r e primarily responsible for the Commission seeking the writ of supervisory control. The orders essentially require the Commission t o quiet t i t l e against a l l possible lienholders and t o use a valuation date more than three years beyond the alleged proper date. Neither order is appealable other than following f i n a l judgment. Extended and needless l i t i g a t i o n would result from allowing the orders t o stand, i f relator i s correct i n i t s assertion that each order is based upon mistake of law or disregard of law by the d i s t r i c t court. The facts and matters s e t forth i n relator Commission's application make i t clear that t h i s is a proper case f a r issuance of the w r i t of supervisory control dated February 18, 1972, requiring the d i s t r i c t court t o show cause why a further appro- priate w r i t should not be granted. W e find that gross injustice t o relator may well r e s u l t , absent a hearing on i t s application. Since the major issue of t h i s proceeding is the determination of a valuation date, and the d i s t r i c t court's order of January 28, 1972, is alleged t o have erroneously s e t such date, the application of relator dated February 14, 1972, was reasonably and timely filed. Respondents' motion t o dismiss these proceedings i s therefor denied, The important issue bringing respondents before t h i s Court i s that of determining the proper date t o assess compensa- tion for property taken and depreciated. The Commission contends the d i s t r i c t court's order of January 28, 1972, setting a valua- tion date of October 24; 1971, as t o defendant Robert L. Fradet, should be annulled, since it would allow defendant t o offer evi- dence a t the Commissioner's hearing of comparable sales several times higher i n amount than that received for similar property sold i n 1968. Montana statutes clearly specify the date with respect t o which compensation i n eminent domain cases shall be assessed, Section 93-9913, R.C.M. 1947, states i n pertinent part: 11 For the purpose of assessing compensation the right thereto shall be deemed t o have accrued at-the date of the service of the summons, and i t s actual value a s of that date s h a l l be the measure of compensation for a l l property t o be actually taken, and the basis of depreciation i n value of property not actually taken, but in- juriously affected. * * *" (Emphasis added) This Court i n State Highway Commission v. Jacobs, 150 Mont. 322, 326, 435 P.2d 274, stated: "The compensation due t o the defendants * * * i s determined by the actual value of the land a t the date on the service of the summons * * *.I1 Section 93-9909, R,C.M. 1947, s e t s forth the statutory requirement for service of summons i n condemnation proceedings. It provides: 11 The clerk must issue a summons, which must contain the names of the parties, a description of the lands and other property proposed t o be taken, a statement of the public use for which it i s sought, and a notice t o the defendants t o f i l e and serve upon the plaintiff an answer within fifteen (15) days from date of service of summons and t o appear before the court or judge, a t a time and place therein specified, and show cause why the property described should not be condemned as prayed for i n the complaint. Such summons must, i n other particulars, be i n form of a summons i n a c i v i l action, and must be served i n l i k e manner upon each defendant named therein, a t l e a s t twenty (20) days previous t o the time designated i n such notice for the hearing, A copy of the complaint must be served, with the summons, upon each defendant named. But the failure t o make a c h service upon a de- fendant does not affect the right t o proceed against any or a l l other of the defendants, upon whom ser- vice of summons had been made. 11 Defendants Fradet do not now contend that the d i s t r i c t court lacks jurisdiction over any of them, They contend the question of valuation date arises because service of process was not valid; was not made i n accordance with statute as t o de- fendants Gerald R. Fradet and Robert L. Fradet. They allege that section 93-9909, R,C.M. 1947, requires service of summons and complaint on the same day. Defendants c i t e a s authority that part of section 93- 9909 which states: I I A copy of the complaint must be served with the summons, upon each defendant named, tf Having given the "same day" interpretation t o the foregoing sentence of the service statute, defendants then c i t e State ex rel. McMaster v. District Court, 80 Mont, 228, 260 P. 134; State v. Aitchison, 96 Mont. 335, 30 P,2d 805; and Housing Authority v. Bjork, 109 Mont. 552, 98 P.2d 324, for the proposition that where the right of eminent domain i s sought t o be exercised, there must always be rigorous compliance with provisions of the law. The record shows that service upon both Gerald R. Fradet and h i s father, Robert L. Fradet, was made on different dates. In each instance, the complaint was served on January 25, 1968, and summons on January 31, 1968. The hearing, however, was set for February 20, 1968, i n conformity with the twenty day notice requirement of Section 93-9909, R.C.M. 1947. The d i s t r i c t court's order of July 14, 1971, refusing t o f i x a date for determination of value was based upon a finding i n conformity with the Fradets' allegations set forth above that service of summons was invalid. That order i s i n error. F i r s t , the d i s t r i c t court determined i n its hearing on Mruary 26, 1968, that the f a c t of serving summons and complaint on separate dates did not deprive the court of jurisdiction over the cause. This Court did not disturb that portion of the d i s t r i c t court's decision on appeal. State Highway Commission v. Fradet, 152 Mont. 436, 451 P.2d 826. It should be noted that the d i s t r i c t judge presiding a t the February 26, 1968, hearing died, and a subsequent judge rendered the orders a t issue. The service made upon the Fradets being sufficient t o give the court below jurisdiction, we need not consider whether the ~ r a d e t s ' February 7, 1968 answer and February 26, 1968, appearance constituted a voluntary general appearance waiving jurisdictional defects i n the service of summons. It remains for us t o determine i f the service of summons was otherwise de- fective i n a manner precluding the setting of January 31, 1968, a s the valuation date. W e conclude that service of the summons was not defective. The wording of section 93-9909, R.C.M, 1947, relied upon by the Fradets, does not mandate service of summons and com- plaint upon the same date. W e are well aware of the rule that s t r i c t compliance with statutory requirements must be had i n eminent domain proceedings. On the other hand, this Court i s cognizant of the major objective of the eminent domain statutes ---to give the landowner f a i r notice. A s we stated i n Housing Authority v. Bjork, 109 Mont. 552, 556, 98 P.2d 324: "The due process clause, i n addition t o its requirement of public use and just compensa- tion, protects the land owner from the adoption of any form of procedure i n eminent domain cases which deprives him of a reasonable opportunity t o be heard and so t o present such ob'ections and claims as he i s entitled t o make, ? I Section 93-9909, R.C.M, 1947, read a s a whole, i s clearly intended t o give the landowner-condemnee notice of what i s proposed t o be taken and why; i t s further objective i s t o give the land- owner twenty days' notice t o prepare for the hearing. W e interpret the section's requirement th,at a copy of the complaint "must be served, -with the summons1' t o be effectively m e t , so long as both are served a t least twenty days prior t o the t i m e designated for hearing. Such service w i l l give f a i r notice of the hearing t o the condemnee regardless of whether the summons and complaint are served on separate dates. Here, timely service was accomplished by the Commission, and i n our opinion itwas a valid and sufficient service for purposes of setting a valuation date, a s w e l l a s for purposes of jurisdiction. Thus, i n accordance with section 93-9913, R.C.M, 1947, January 31, 1968, the date Gerald R. Fradet received service of summons, i s the proper valuation date. Gerald R. Fradet was then the owner of the property. H i s deed t o the property was dated and recorded August 30, 1967. Robert L. Fradet, though reacquiring ownership of the property subsequent to the t i m e of taking, has no standing t o "acknowledge service'' of the summons i n October 1971. Gerald R. Fradet on January 31, 1968, was the proper party de- fendant t o receive service of summons, This Court i n State Highway Commission v. Robertson & Blossom, 151 Mont. 205, 441 P.2d 181, held that the s t a t e may r e l y on record t i t l e . Nichols on Eminent Domain, 3rd Ed., Vol. 2, 5 5.1[4], states: "* * * it is the owner of the property a t the time of the taking who i s entitled t o compen- sation. " The d i s t r i c t court's dismissal of Gerald R. Fradet from the action effective June 20, 1972, has no effect on the validity of service of summons on him, A s t o the third issue t o be decided, i t i s apparent that the d i s t r i c t court's order of July 14, 1971, requires the Commis- sion t o bring a -quiet t i t l e action against additional defendants, being a l l those who may claim some l i e n or encumbrance upon the subject property. The possible existence of lienholders was raised by the two e a r l i e r actions, noted above, involving bonds of the now defunct Columbus Irrigation District. Respondents and the Commission believe that the prevailing view i s that a quiet t i t l e action is not required and no additional defendants need be named. Respondents note that the irrigation d i s t r i c t cases have been dormant for years; that none of the Fradets a r e named as parties 5n either of the e a r l i e r actions; and that no one has f i l e d any claim or l i e n of any kind against any of the Fradets. The law i s well stated i n Nichols on Eminent Donain,3rd Ed,, "Although there i s authority t o the contrary, a lien i s not a proprietary interest or e s t a t e i n land, but i s a remedy against it, and, a s the legislature may constitutionally impair a remedy without compensa- tion, when land subject t o a l i e n i s taken by eminent domain, the holder of the l i e n i s not entitled t o be made a party, or t o recover compensation from the condemnor, It i s , however, well settled that the award stands i n place of the land, and i s subject t o the same liens, and that consequently a lienor may proceed against the award upon general equitable principles, and without the aid of any statute. H e may have h i s l i e n satisfied out of the fund awarded t o the owners of the legal t i t l e as compensation for the land i n advance of other creditors, I t Thus, the lienholders are relegated t o claims against the ultimate award. Furthermore, i n Montana it i s established that a mortgage does not create an estate i n r e a l property but is mere security for payment of a debt or discharge of an obligation---it crea tEs a l i e n upon the property. Cornish v. Woolverton, 32 Mont. 456, 81 P. 4; Barth v. Ely, 85 Mont. 310, 278 P. 1602. Therefore, Nichols on Eminent Domain, 3rd Ed., Vol. 2, 5 5.741, s t a t e s that i n jurisdictions such as Montana: "* * * i n the absence of express statutory requirement, the mortgagee need not be made a party, or be notified of the proceedings, and he i s not entitled t o compensation from the condemnor. 1 l It has also been held that judgment creditors have no e s t a t e or proprietary interest i n land of the judgment debtor, and judgment creditors need not be joined a s parties i n eminent domain actions for the purpose of cutting off the l i e n of their judgments. Nichols on Eminent Domain, 3rd Ed., Vol. 2, 5 5.742. W e hold that it i s unnecessary for the Commission t o bring a quiet t i t l e action or name additional defendants. As a practical matter, it i s unlikely that lien claimants exist. A l i s pendens was f i l e d i n January 1968, and no claimants have appeared, Any parties not now named who may l a t e r claim a l i e n o r encumbrance upon the land may satisfy such claim from the award made t o the Fradets . Accordingly, we hereby issue a W r i t of Supervisory Control directed t o the d i s t r i c t court of the thirteenth judicial d i s t r i c t , i n and for the county of Stillwater, ordering: (1) That the order of the d i s t r i c t court fixing October 24, 1971, as the valuation date as t o defendant Robert L. Fradet be vacated and set aside; (2) That the date of January 31, 1968, be entered as the proper date for the purpose of assessing compensation for a l l property actually taken and for determining the basis of depreciation i n value of property not actually taken but injuriously affected; and (3) That the d i s t r i c t court's order of July 14, 1971, ruling that it cannot now f i x the date for determination of values and requiring p l a i n t i f f , i n effect, t o name or interplead any additional defendants, be vacated and set aside, IT IS SO ORDERED, Associate &stices.