DA 06-0759

IN THE SUPREME COURT OF THE STATE OF MONTANA

2008 MT 65

SERENA VISTA, L.L.C.,

 Petitioner and Appellant,

 v.

STATE OF MONTANA DEPARTMENT OF 

NATURAL RESOURCES AND CONSERVATION,

 Respondent and Appellee.

APPEAL FROM: District Court of the Twenty-First Judicial District,

In and For the County of Ravalli, Cause No. DV-2006-327

Honorable Jeffrey H. Langton, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

D. Scott Manning, Sullivan, Tabaracci & Rhoades, P.C., Missoula,

Montana

For Appellee:

Anne W. Yates, Tim D. Hall, Britt T. Long, Special Assistant Attorneys

General, Helena, Montana

Submitted on Briefs: October 31, 2007

 Decided: February 26, 2008

Filed:

__________________________________________

Clerk

February 26 2008
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Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1 Serena Vista, L.L.C. (Serena Vista) is a Wyoming limited liability company 

registered to do business in Montana. It owns real property in Ravalli County, Montana, 

and holds established water rights associated with the property. The Montana 

Department of Natural Resources and Conservation (DNRC), the agency authorized to 

regulate water rights in Montana, alleged that Serena Vista had created a “place of 

storage” on the property that had not been permitted by the DNRC. The agency 

demanded that Serena Vista cease its storage activities and seek an application to change 

its water rights. Serena Vista filed a Petition for Declaratory Judgment in the TwentyFirst Judicial District Court arguing that DNRC had not promulgated a rule defining 

“place of storage.” The District Court dismissed the Petition with prejudice. Serena 

Vista appeals. We affirm. 

ISSUE

¶2 A restatement of the issue on appeal is:

¶3 Did the District Court erroneously dismiss with prejudice Serena Vista’s Petition 

for Declaratory Judgment?

FACTUAL AND PROCEDURAL BACKGROUND

¶4 Serena Vista owns five water rights associated with its ranching operation in the 

Bitterroot Valley in Ravalli County, Montana. In February 2006 DNRC received a 

complaint from other riparian rights’ owners alleging that Serena Vista had created a 

storage pit on its property and that the change in Serena Vista’s water activities was

adversely affecting their water rights. In March 2006 DNRC notified Serena Vista in 
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writing of the complaint and ordered that, “[i]f the alleged activities are occurring they 

must cease immediately.” The agency also indicated that it would meet with the 

principals of Serena Vista on the property for an on-site investigation on March 28, 2006. 

¶5 In April 2006 DNRC issued a letter to Serena Vista requesting additional 

information pertaining to water activity concerns it identified during its on-site visit. 

After reviewing the information provided by Serena Vista, the agency found that Serena 

Vista had changed a point of diversion without notifying DNRC, and had created a “place 

of storage” without DNRC authorization—both in violation of DNRC regulations. 

Serena Vista disputed the agency’s allegations and requested statutory and regulatory 

support for them. In June 2006 DNRC explained in writing its underlying legal authority. 

In July 2006 Serena Vista filed a Petition for Declaratory Judgment arguing that DNRC’s 

finding were “made upon unlawful procedure,” were arbitrary and capricious, and were 

an unwarranted exercise of DNRC’s discretion. 

¶6 In September 2006 DNRC moved to dismiss Serena Vista’s Petition on the ground 

that it failed to state a claim upon which relief could be granted pursuant to M. R. Civ. P. 

12(b)(6) (hereinafter Rule 12(b)(6)) and as a result the District Court did not have 

jurisdiction. DNRC also argued that the agency’s letter notifying Serena Vista of water 

violations was not “a proper subject for a declaratory judgment,” and that Serena Vista 

had failed to exhaust its administrative remedies. Serena Vista opposed the motion to 

dismiss but in November 2006 the District Court determined that Serena Vista had not 

exhausted its administrative remedies, and therefore the court did not have jurisdiction to 
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hear the matter under the Uniform Declaratory Judgment Act. It dismissed the Petition 

with prejudice.

¶7 Serena Vista filed a timely appeal from the dismissal of its Petition.

STANDARD OF REVIEW

¶8 We review de novo a district court’s ruling on a motion to dismiss pursuant to 

Rule 12(b)(6). Rule 12(b)(6) allows a defendant to move for dismissal of a claim on the 

ground that the petitioner/plaintiff failed to state a claim upon which relief can be 

granted. A motion to dismiss under Rule 12(b)(6) has the effect of admitting all wellpleaded allegations in the complaint. In considering the motion, the complaint is 

construed in the light most favorable to the plaintiff, and all allegations of fact contained 

therein are taken as true. Plouffe v. State, 2003 MT 62, ¶ 8, 314 Mont. 413, ¶ 8, 66 P.3d 

316, ¶ 8 (citations omitted).

DISCUSSION

¶9 The issue before us is whether the District Court erred in dismissing Serena 

Vista’s Petition for Declaratory Judgment.1 Serena Vista presents several arguments on 

appeal including a challenge under the Montana Administrative Procedure Act (MAPA) 

alleging that DNRC had unlawfully failed to properly promulgate a “rule” but

nonetheless concluded that Serena Vista had violated this “rule.” Serena Vista argues, 

and it is undisputed, that in 2006 the term “place of storage” was not defined by Montana 

statute or rule. However, DNRC concluded that Serena Vista violated applicable rules by 

 

1 Notably, Serena Vista does not raise here the question of whether its pit does or does not 

constitute a “place of storage” as defined by DNRC. 
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creating a “place of storage” without DNRC approval. DNRC cites Admin. R. M. 

36.12.1901(1), which requires that an “application to change a water right . . . must be 

filed when an applicant desires to change the point of diversion, place of use, purpose of 

use, or place of storage of a water right.” (Emphasis added.)

¶10 As noted above, upon notice from DNRC that it was in violation of water rights 

regulations, Serena Vista asked for the legal authority upon which DNRC based its 

conclusion. In addition to providing specific legal authority for its position, DNRC 

addressed the “place of storage” issue in its June 2006 letter by stating that it “has long 

considered a pumping pit as providing that volume of water necessary to supply the 

immediate need of the pump capacity. Quantities larger than this are deemed storage.” 

Serena Vista maintains that this pronouncement in DNRC’s letter amounted to, or 

“constituted a rule as defined by statute.” It insists that because this “rule” was not

lawfully promulgated under MAPA, it is unenforceable. 

¶11 Premised upon its determination that DNRC’s June 2006 letter actually constituted 

an unlawfully created rule, Serena Vista invokes § 2-4-506(4), MCA (of MAPA), and the 

Uniform Declaratory Judgment Act, § 27-8-201 through -331, MCA, as authority for its 

declaratory judgment action, arguing these statutes authorize it to seek a judicial 

determination of the validity and application of the ostensible “rule.” It posits that the

“[d]etermination of the validity of an administrative rule is a matter of legal interpretation 

for the judiciary to decide rather than a regulatory determination requiring agency 

expertise and exhaustion of agency administrative remedies.”
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¶12 The State responds that, in all likelihood, this matter will be moot by the time this 

Court reaches its decision because, by that time, DNRC will have a properly promulgated 

rule defining “place of storage,” and Serena Vista has already agreed “to comply with all 

statutes and regulations.” In fact, DNRC promulgated a regulatory definition of “place of 

storage” in Admin. R. M. 36.12.101(48) (effective February 1, 2008). “Place of storage” 

is now defined as a “reservoir, pit, pit-dam, or pond.” As a result, Serena Vista’s claim 

that DNRC relied upon an improperly promulgated rule to prohibit Serena Vista from 

continued use of what it refers to as its “irrigation pumping pit,” is, therefore, arguably 

moot.

¶13 Serena Vista replies that should such a rule be properly promulgated before our 

ruling we should nonetheless address its issues on the merits. It maintains that the agency

or other State agencies could once again “evade MAPA rule-making requirements by 

simply implementing ad hoc rules and only properly promulgating rules when the 

agency’s actions are judicially challenged”; therefore, it argues because the agency’s 

actions are capable of repetition, we should address this issue on appeal.

¶14 A justiciable controversy must exist for this Court to adjudicate a dispute. Clark v. 

Roosevelt County, 2007 MT 44, ¶ 11, 336 Mont. 118, ¶ 11, 154 P.3d 48, ¶ 11. We do not

render advisory opinions, and we limit our rulings to those matters in which we can grant 

effective relief. Clark, ¶ 11. Mootness is a threshold issue which must be resolved 

before addressing the underlying dispute. Grabow v. Montana High School Ass’n, 2000 

MT 159, ¶ 14, 300 Mont. 227, ¶ 14, 3 P.3d 650, ¶ 14 (citing Shamrock Motors, Inc. v. 

Ford Motor Co., 1999 MT 21, ¶ 17, 293 Mont. 188, ¶ 17, 974 P.2d 1150, ¶ 17). This 
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Court has consistently held that “a moot question is one which existed once but because 

of an event or happening, it has ceased to exist and no longer presents an actual 

controversy.” Skinner v. Lewis and Clark, 1999 MT 106, ¶ 12, 294 Mont. 310, ¶ 12, 980 

P.2d 1049, ¶ 12 (citation omitted). Moreover, a case will become moot for the purposes 

of an appeal “where by a change of circumstances prior to the appellate decision the case 

has lost any practical purpose for the parties, for instance where the grievance that gave

rise to the case has been eliminated . . . .” Matter of T.J.F., 229 Mont. 473, 475, 747 P.2d 

1356, 1357 (1987) (citation omitted).

¶15 Given the current circumstances, dismissal of Serena Vista’s Petition is 

appropriate unless as argued by Serena Vista this issue is capable of repetition. This 

exception to the mootness doctrine recognizes that the amount of time inherent in the 

litigation process renders it potentially impossible in some cases for a final judicial 

decision to be reached before the case is rendered moot. In such circumstances, because 

application of the mootness doctrine would effectively deny the remedy of appeal, a court 

may agree to issue a decision even after the actual controversy has been resolved. 

Billings High Sch. Dis. v. Billings Gazette, 2006 MT 329, ¶ 14, 335 Mont. 94, ¶ 14, 149 

P.3d 565, ¶ 14 (citations omitted). However, a party seeking to invoke the “capable of

repetition, yet evading review” exception to the mootness doctrine bears the burden of 

establishing both that the challenged action is too short in duration to be litigated fully 

before its cessation and that there is a reasonable expectation that the same complaining 

party would be subject to the same action again. Billings High School, ¶ 14. Accord

Havre Daily News, LLC v. City of Havre, 2006 MT 215, 333 Mont. 331, 142 P.3d 864. 
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Serena Vista has failed to establish or even argue that there is a reasonable expectation 

that it will again be the victim of DNRC’s failure to properly implement new water 

regulations. As a result, we decline to review the merits of its claim. 

¶16 Accordingly, we conclude that the grievance that gave rise to this case—the 

failure of DNRC to properly implement a rule defining “place of storage”—has lost any 

practical purpose for the parties and is thus moot for the purposes of appeal. Because we 

hold that this issue is moot, we conclude the District Court reached the correct outcome, 

albeit for a different reason. 

¶17 We further conclude that the fact that the District Court’s dismissal was “with 

prejudice”—a determination to which Serena Vista objects—is, in light of our disposition 

here, of no consequence to Serena Vista, because we have resolved this matter on 

grounds of mootness. This being so, there is no prospect that the same issue will again be 

presented to the District Court. Therefore, we affirm.

CONCLUSION

¶18 For the foregoing reasons, we affirm the District Court’s dismissal with prejudice

of Serena Vista’s Petition.

/S/ PATRICIA COTTER

We Concur:

/S/ KARLA M. GRAY

/S/ JAMES C. NELSON

/S/ BRIAN MORRIS

/S/ JIM RICE