NO. 95-224 INTHESUPREMECOURTOFTHESTATEOFMONTANA 1996 BIG SKYHIDDEN VILLAGE OWNERSASSOCIATION, INC., Plaintiff andAppellant,

HIDDENVILLAGE, INC., Defendant and Respondent and CARLISLE NEITHOLD, et al., Defendants and Respondents.

HIDDENVILLAGE, INC., Third Party Plaintiff and Respondent,

v. CALVIN JEROMEHANAN, et al., Third Party Defendants andAppellants.

APPEAL FROM: District Court of the Eighteenth Judicial District,

In and for the County of Gallatin, The Honorable Larry W.Moran, Judge presiding.

COUNSELOFRECORD:

For Appellant: Gregory 0. Morgan, Robert Cameron, Bozeman, Montana; K. Kent Koolen, Moulton LawFirm (Big Sky Hidden Village Owners Association, Calvin Hanan, et al.) For Respondent: James H. Goetz, Robert K. Baldwin, Goetz, Madden & DunnI Bozeman, Montana (Hidden Village, Inc.) ; Calvin?. Stacey, Billings, Montana (Hidden Village,

arlisle, Neithold, et al.) Submitted onBriefs: January 4, 1996 

### AFR",3I998 Decided: April 23, 1996Justice James C. Nelson delivered the Opinion of the Court.

Big Sky Hidden Village Owners Association (Big Sky) appeals from ajudgment andmemorandum andorder entered bythe Eighteenth Judicial District Court, Gallatin County granting Hidden Village, Inc.'s (HVI) motion for partial summary judgment, denying Big Sky's motion for partial summary judgment, and denying HVI's motion to strike. Weaffirm. ISSUES 1. Whether real property adjacent to a condominium development, which wasnever submitted to Montana's Unit Ownership Act by description on the condominium declaration or amendment thereto, is subject to the act and the declaration. 2. Whether the owner of real property adjacent to a condominium development may use the roads running through the condominium property to access the adjacent land. 3. Whether the owner of real property adjacent to a condominium development mayuse the water and sewer mains running through the condominium property to serve the adjacent land. BACKGROUND On December 15, 1980, the Gallatin County Board of County Commissioners approved Big Sky Camper Village Inc.'s preliminary application for aplanned unit development (PUD) located on the site of the existing Big SkyCamper Village for the construction of

a maximum of 198 condominium units. The proposed development consisted of 37.E acres located approximately one and one-half miles west of MeadowVillage. Those 37.8 acres encompass the Big Sky Hidden Village Condominium and HVI's remaining property. The findings of fact andorder approving the PUDdid not restrict where

onthe 37.8 acres the 198units were to beplaced. The findings of

2fact and order approving the PUDstated that "adequate access to

all units should beprovided even though the roads will beprivate ones," and ordered that "the roads are the responsibility of the developer until they are turned over to the Property Owner's Association andthat the roads will beprivate roads, for which the County will have no responsibility." TheGallatin County Board of County Commissioners' order further stated that "water supply and sewage disposal will behandled byexisting central systems." The rural improvement district agreed to provide sewage collection and disposal tothe 198condominium units. Additionally, Lone Mountain Springs, Inc., agreed to provide domestic water to the 198 condominium units. Pursuant to 570-23-103, MCA, Big Sky Camper Village, Inc., filed the declaration andby-laws for the Big Sky Hidden Village Condominium. Thedeclaration provides in pertinent part: Declarant reserves the right from time to time (but onor before 10years from the date of the initial recording of this Declaration) to expand the number of units to be included in this condominium by subjecting the condominium site plan as shown in Exhibit "CT'to the construction of additional units, andto provide for up to 198 additional units for an over-all total of 198 units of one, two, or three bedroom units. Thedeclaration submitted Tract I-A to the Condominium Act andhas at various times submitted additional lands contained within certificate of survey 1605 (COS1605). Specifically, the original declaration describes the real property submitted by the declaration and subject to the Montana Unit Ownership Act as Tract I-A of the Condominium Subdivision known asHidden Village Condominium recorded on 1980, in Book of Plats at Page situated within the-d Gallatmounty, Montana and l/4 of Section 35 Township L South, Range 3 East, M.P.M., Gallatin County, Montana. 3Tract I-A does not include the entire area covered by co.9 1605.

Although the land in dispute in the instant case is neither part of Tract I-A nor has been submitted as an amendment to the declaration, it is included within the description of the PUD. HVI is the successor in interest to Camper Village, the original declarant/developer. Ofthe approved 198units, 141have been constructed asBig Sky Hidden Village Condominiums. WhenBVI conveyed the condominium units, it did not reserve any easement, right of access, or right of use for the roads, water lines, or

sewer lines. However, the roads and the sewer and water lines

cross HVI's property in order to reach the Big Sky Hidden Village Condominium. The land included in COS1605but not included in the declaration belongs to HVI. This remaining land surrounds the Big Sky Hidden Village Condominium onthree sides. Seediagram. OnApril 2, 1991, HVIapplied to the Department of Health and Environmental Sciences, Lone Mountain Springs, and Rural Improvement District #305for approval of 57additional units. Big Sky then filed suit in the Eighteenth Judicial District Court, Gallatin County, seeking a declaratory judgment that the land within COS1605 is subject to the declaration, that the roads within the Condominium are private and not available for public use, andthat the water and sewer systems are the property of the unit owners and cannot beexpanded without their permission. HVI moved for partial summary judgment, seeking adeclaratory judgment that the real property ownedbyHVIwithin COS1605 is not subject to the Big Sky Hidden Village Condominium declaration or bylaws.

4OnJune 15, 1994, the District Court granted HVI's motion, stating

that HVI's property within COS1605 is not subject to the Big Sky Hidden Village Condominium declaration or bylaws. OnJune 30, 1994, Big Sky moved for partial summary judgment

on the remaining issues. In its March 31, 1995 memorandum and order, the District Court denied Big Sky's motion ruling that the roads, while private, are not the exclusive property of Big Skyor its members; that the roads are a public right-of-way for all purposes other than maintenance; that HVI has the right to use the roads for ingress and egress to its property because it has acquired easements by implication andnecessity; and that HVI has the right to use the water and sewer systems. OnApril 14, 1995, Big Sky filed its notice of appeal from the District Court's judgment andmemorandum andorder granting HVI's cross motion for partial summary judgment. HVI filed in this Court amotion to dismiss the appeal arguing that neither District Court order is reviewable because there were multiple claims and because the orders were not final. Citing Hennen v. OmegaEnterprises, Inc. (1994), 264 Mont. 505, 507-08, 872 P.2d 797, 799, we held in a June 1, 1995 order that the District Court's March 1995order is appealable under Rule l(b) (2), M.R.App.P., because it wasadenial of injunctive relief andthat the June 15, 1994 judgment is appealable because it is an intermediate order or decision.

-,STANDARDOFREVIEW

Wereview agrant of summary judgment de ZIOVOusing the same criteria initially used by the District Court under Rule 56, M.R.Civ.P. Meadv. M.S.B., Inc. (19941, 264Mont. 465, 470, 872 P.2d 782, 785. Therefore, wedetermine whether there is anabsence of genuine issues of material fact andwhether the moving party is entitled to judgment asamatter of law. Mead, 872 P.2d at 705. DISCUSSION 1. Whether real property adjacent to a condominium development, which wasnever submitted to Montana's Unit Ownership Act by description on the condominium declaration or amendment thereto, is subject to the act andthe declaration. Big Sky claims that the District Court erred in finding that the land owned byHVI is not subject to the Big Sky Hidden Village Condominium declaration or bylaws, and thus is not subject to Montana's Unit Ownership Act, Title 70, chapter 23, MCA. HVI argues that the District Court correctly determined that the tenyear time limit in the declaration only applies to land included in that declaration or added byamendment thereto and does not limit HVI's right to develop its remaining land. Section 70-23-103, MCA, sets forth the applicability of the Unit Ownership Act establishing acondominium as follows: Applicability -- submission bydeclaration required. In order to submit any property to the provisions of this chapter, the sole owner or sole lessee or all of the owners or all of the lessees thereof shall execute, acknowledge, and record adeclaration in the office of the recording officer of the county inwhich the property is located. The declaration shall be executed in accordance with 70-23-301.

6Section 70-23-102(6), MCA, provides that a declaration is the

instrument bywhich property is submitted to the provisions of the Unit Ownership Act. Actual filing of the declaration is the action "which subjects the property in question to the provisions of the act." Jordan v. Elizabethan Manor (1979), 181Mont. 424, 430, 593 P.2d 1049, 1053. Adeclaration shall contain amongother things "a description of the land, whether leased or in fee simple, onwhich the building is or is to be located." Section 70-23-301, MCA. A certificate of survey, onthe other hand, is not adeclaration and does not submit land to the Unit Ownership Act. Accordingly, the declaration for the Big Sky Hidden Village Condominium and not COS1605 determines the land subject to the provisions of the Unit Ownership Act. Specifically, the original declaration included only Tract I-A. Subsequent amendments to the declaration included Tracts I-XI andthe Recreation Tract. Big Sky concedes that if the property in question is not onBig Sky Hidden Village Condominium land, then it is not subject to the declaration. However, Big Sky argues that the description of property in the original declaration is incomplete and therefore COS 1605 properly determines the property included in the Big Sky Hidden Village Condominium. While section II of the declaration broadly states that the property included in the Condominium is located in "the SWl/4 of Section 35, Township 6South, Range 3East, M.P.M., Gallatin County, Montana," the original site plan (Exhibit B), incorporated within the original declaration andrecorded with it,

7specifically includes a metes and bounds description of the

property submitted to the act. Similar site plans were submitted with each amendment tothe declaration. Therefore, the declaration contained acomplete andspecific description of the property. HVI argues that the ten-year limitation contained in the declaration only governs the addition of units to the Big Sky Hidden Village Condominium, not development of land outside the Condominium. HVI further argues that the term "expansion" in the declaration refers to the addition of units or land to the Condominium andnot to other property ownedbyHVI. Moreover, HVI notes that the ownership and voting section of the declaration states that 'I[‘clheHidden Village Condominium consists of the real property described above

. . .'I Exhibit Cto the declaration shows "the proposed or projected location of the additional buildings and lands which may be added by the declarant." Therefore, for other land tobeincluded within the Condominium, it would have to beadded byamendment. Because the amendments to the declaration donot include HVI's land in question, HVI argues that the land is not part of the Condominium. There are noprovisions within the declaration that purport to prevent HVI from developing land not placed within the Big Sky Hidden Village Condominium. The ten-year limitation in the declaration only governs the addition to units to the Big Sky Hidden Village Condominium, not the separate development of HVI's land outside the Condominium. Thus the term "expansion" and the limitation thereof, applies only to additional units to the Big Sky

8

### Hidden Village Condominium, not the separate construction of

separate improvements onlandownedbyHVIoutside theCondominium. TheGallatin BoardofCountyCommissioners approved 198units; Lone Mountain Springs agreed toprovide service for 198units, andRID 305agreed to provide service for 198units. TheGallatin County Clerk andRecorder hasthe declaration onfile togive notice to anyinterested party exactly what land is included in the BigSky HiddenVillage Condominium. Accordingly, wehold that theDistrict Court correctly found that HVI's real property adjacent tothe Big SkyHidden Village Condominium wasnever submitted to Montana's Unit Ownership Actbydescription ontheCondominiumdeclaration or amendmentthereto. 2. Whether the owner of real property adjacent to a condominium development mayuse the roads running through the condominium property to access the adjacent land. BigSkycontends that the roads going through theCondominium

are private andtherefore HVImaynot usethem. HVIargues that the roads are public and in the alternative that HVI has an easement by implication andaneasement bynecessity to usethe roads.As early as 1973, what is now Big Sky Hidden Village CondominiumandHVI's remaining property waslaced with asystemof roads accommodating vehicles for useasanR.V. park. Therefore, in 1980, whenCamperVillage sought approval of the PUD,aseries of roads already existed onthe land to bedeveloped. Theroads extended through what is nowHVI's remaining property andwhat is

nowthe Big SkyHidden Village Condominium. Those roads which

9predated the PUDapproval, the filing of the declaration, and the

construction of the first condominium unit, are the sameroads that continue to serve the Condominium and HVI's land today. Additionally, in approving the PUD, the Gallatin County Board of County Commissioners found that "to preserve to the maximum extent possible the natural characteristics of the land

. . .adequate

access to all units should beprovided even though the roads will beprivate ones." Camper Village, Inc., and HVI developed the Big Sky Hidden Village Condominium in phases. Camper Village, Inc., initially submitted to the declaration Tract I-A comprised of afew acres and 14units. Camper Village Inc., and HVI continued to develop the Condominium in phases, adding small parcels of land to the declaration. During this phased development, unit owners had to

cross property owned by Camper Village or HVI to obtain access to their condominiums. Similarly, to obtain access to the remaining land to construct additional units, CamperVillage andHVIused the existing roads that cross the property that is already part of the Condominium. Thus HVI claims that it had aneasement bynecessity allowing it to use the existing road system. Aneasement by necessity is asubspecies of an easement by implication that arises through strict necessity for exit and

access to aparcel of property. Graham v. Mack (1984), 216 Mont. 165, 175, 699 P.Zd 590, 596; see also Schmid v. McDowell (19821, 199Mont. 233, 237, 649P.2d 431, 432. In Schmid, aproperty owner brought action against a neighboring property owner seeking a

10declaration of aneasement bynecessity. Wedefined aneasement by

necessity asfollows: [wlhere anowner of land conveys aparcel thereof which has no outlet to ahighway except over the remaining lands of the grantor orover the land of strangers, away of necessity exists over the remaining lands of the grantor. Similarly, awayof necessity is found whenthe owner of lands retains the inner portion conveying to another the balance, across which hemust gofor exit and access. Schmid, 649 P.2d at 433 (citations omitted); see also Peters v. Johnson (1983), 203 Mont. 120, 661 P.Zd 24. Further, we distinguished aneasement bynecessity from other implied easements in noting aneasement bynecessity need not bein existence at the time of conveyance, but rather the conveyance gives rise to the easement. However, the tracts over which the easement is claimed

must have had acommon ownership or unity of title immediately prior to the severance giving rise to the necessity. Schmid, 649 P.2d at 433. Subsequently in Graham, weset forth two basic elements of an easement by necessity: 1) unity of ownership, and 2) strict necessity at the time the unified tracts are separated. Graham, 699 P.Zd at 596. In Graham, weheld that no implied easement existed absent unified title of the property involved. We reiterated the strong public policy against shutting off atract of land and thus rendering it unusable. "Where an owner of land conveys aparcel which has nooutlet to ahighway except over the remaining lands of the grantor or over the lands of strangers, a wayof necessity exists over the remaining lands of the grantor." Graham, 699 P.2d at 596 (quoting Schmid, 649 P.2d at 433). 11However, the waygranted maynot beover the land of athird party

or stranger to the title. Graham, 699 P.2d at 596-97; see also Woodsv. Houle (1988), 235Mont. 158, 163, 766 P.2d 250, 253. InWoods, the district court granted aneasement bynecessity. In reversing the district court, weheld that the respondent was not able to meet the requirements of aneasement by necessity as set forth in Graham. The easement bynecessity did not give the respondent access to apublic road but only to athird party's land, and asweheld in Graham, away granted may not be onthe land of athird party. Moreover, the respondent hadaneasement by prescription which is incompatible with aneasement bynecessity. Woods, 766 P.2d at 253. In Smith v. Moran (1985), 215 Mont. 31, 38, 693 P.2d 1246, 1251, we considered the Gallatin County Subdivision Regulation 4.4.2, which provides that: [wlhen anew subdivision adjoins unsubdivided land and reasonable access thereto must pass through the new subdivision, streets and rights of wayshall beprovided to allow suitable access to the unsubdivided land. In Smith, there wasevidence that plaintiffs hadample alternative

access to their property, andthere wasnoevidence to suggest that

access across the subdivision wasessential. Wefurther noted that "any unique property interest in abutting landowners is limited to the right only to adequate access necessary to connect the landowner to the general street system." Smith, 693 P.2d at 1251 (citing Wynia v. City of Great Falls (19791, 183 Mont. 458, 600 P.Zd 802).

12In the instant case, HVI meets both the unity of title

requirement andthe requirement of strict necessity at the time the unified tracts were separated. Camper Village, HVI's predecessor, owned all of COS1605 and conveyed part of that tract to the Big Sky unit owners. At the time Camper Village conveyed Tract I-A to the Big Sky unit owners, submitting Tract I-A to the declaration, the strict necessity of access andexit to the public roads arose. In his affidavit, Jack Schunke, an engineer, stated that if not afforded access across the existing roads, HVI will have great difficulty developing additional property, if it maydosoat all. Moreover, hestated that the road someof the unit owners use to enter the Condominium crosses HVI's land. Carlisle Neithold, president of HVI stated in his affidavit that HVI does not own abutting land outside COS1605, and cannot obtain access to its remaining land without using the existing roadways. Thus there is evidence that HVI does not have ample alternative access to its property. Big Sky's argument that the ten-year limitation in the declaration precludes aneasement by implication andby necessity because it negates the presumed intent to reserve easements andthe necessity for those easements does not persuade us. As stated above, the ten-year limitation in the declaration only addresses HVI's right to continue to add land or units to the Big Sky Hidden Village Condominium and does not address HVI's right to use the roads.

13Accordingly, the District Court correctly granted summary

judgment in favor of HVI, determining that HVI has aneasement by necessity. Because we hold that the District Court correctly granted summary judgment onthe easement bynecessity, weneed not reach the issue of HVI's alleged easement by implication. 3. Whether the owner of real property adjacent to a condominium development mayuse the water andsewer mains running through the condominium property to serve the adjacent land. Big Sky contends that the sewer andwater systems are common elements andtherefore HVI hasnoright to use them. HVI concedes that the water andsewer systems maybecommonelements held bythe condominium unit owners astenants in common, but contends that Big Sky does not have exclusive ownership of the water and sewer systems. In fact, HVI argues that public utilities ownthe water and sewer systems, have the responsibility for maintaining the systems, and therefore have the exclusive right and duty to determine who hooks upto the systems. In its definition section, the declaration includes water and

sewer lines asgeneral commonelements. Section 70-23-102(S) (d), MCA, also includes water and waste disposal as general common elements. Section 70-23-404, MCA, explains the nature of the ownership interest in general commonelements as follows: The undivided interest in the commonelements shall not be separated from the unit to which it appertains and shall beconveyed or encumbered with the unit even though such interest is not expressly mentioned or described in the conveyance or other instrument. Consequently, each unit owner mayusethe commonelements for their intended purposes. See § 70-23-503, MCA. The bylaws of a

14condominium provide for the maintenance, repair, andreplacement of

the common elements or the additions and improvements thereto. Section 70-23-504, MCA. HVI argues that while the Condominium members may own the water and sewer lines, they dosoastenants in commonand cannot preclude another party from aright to aneasement to use the same

common elements. In fact, HVI argues that Big Sky's claim to exclusive LlSCS and ownership of the water and sewer lines contradicts the fact that LoneMountain Springs andWater andSewer District (WSD)#363exercise the right todetermine whohooks upto the respective systems and contradicts the approval of the PUD allowing HVI to obtain water andsewer service through the existing systems. Prior to 1973, adeveloper installed the water distribution mains located within what is now Big Sky Hidden Village Condominium. When the Gallatin county Board of county Commissioners approved the PUDin 1980, the water distribution system consisting of a storage tank on the hill above the development and numerous water distribution mains and loops therefore already existed. Additionally, prior to 1972, a developer installed a series of sewer collection mains on the development. Rural Improvement District #305obtained ownership of the sewer collection mains that transported waste water from the development to atreatment facility that it owned andoperated. After the PUDwas approved, Camper Village, Inc. and HVI developed the Big SkyHidden Village Condominium in phases. During

15the phased development, the unit owners had to use the water

distribution mains and sewer collection mains passing underneath CamperVillage, Inc. property. Similarly, whenCamperVillage, Inc. andHVI constructed units for inclusion into the Condominium, they hooked those units upto the existing water distribution andsewer collection mains running, in part, under the Condominium property. Lone Mountain Springs owns the water tank and wells serving Big SkyHidden Village Condominium andhas repaired andmaintained the lines servicing the Condominium. Twowater sources serve the Big Sky Hidden Village Condominium, a well not far from the condominiums and a well that serves the Sweetgrass Hills Subdivision. Therefore, two water distribution mains enter the Condominium, onefrom the nearby well andonefrom the water system that serves the Sweetgrass Hills Subdivision. These mains intersect and travel to the water storage tank on Big Sky Lumber Company's property. The Condominium derives water pressure and capacity from the water storage tank. That tank is crucial to Big Sky Hidden Village Condominium's continued service. The water distribution mains that transport water through HVI's property to the Condominium andonto athird party's property existed before Camper Village bought the property it then conveyed to HVI and to the Condominium. Those samemains nowtransport water from athird party's property, through HVI's property, through the Condominium through HVI's property and to the water storage tank. Lone Mountain Springs has maintained and repaired the water system serving the Condominium. Big Sky does not pay for the

16repair andmaintenance expenses to the water system. Lone Mountain

Springs installed atelemetry system to regulate the flow of water into the storage tank to prevent the tank from overflowing or becoming empty. After a well had become contaminated, Lone Mountain Springs connected the water distribution pipes in the Big Sky Hidden Village condominium to the Sweetgrass Hills Subdivision water system. Section 69-4-511 Cl), MCA, provides for the financial responsibility and liability for water service asfollows: A property owner is responsible for the costs of constructing privately supplied water service pipelines from the main tohis premises andfor maintaining service pipelines from his property line to his premises. Big Sky Hidden Village Condominium did not construct the water lines on its premises or the lines from its premises to the main water lines, nor has it paid for the maintenance or repair of the water lines from its property line to its premises. Thesewer collection mains also pass through property ownedby HVI, the Condominium and on to property owned by third parties. Originally, Rural Improvement District #305serviced CamperVillage Inc.'s property andthen serviced both HVI's andthe Condominium's property. Rural Improvement District #305transferred its assets, debts, and liabilities to WSD#363; it included in the assets transferred existing sewer collection pipes serving the Big Sky Hidden Village Condominium. WSD#363wasorganized byvote of the citizens of the Big Sky area. All of the sewer and waste water generated bythe Big Sky Hidden Village Condominium flows into the

17sewer collection mains and sewage treatment facility owned byWSD

#363.RID#305maintained the sewer collection system servicing the condominium. RID#305 hired afirm to conduct avideo inspection of the sewer mains and hired an irrigation company to dig upand repair portions of the sewer mains serving the Condominium. WSD #363 has also maintained the lines within the Condominium andhas given approvals and disapprovals for hook up of additional users within the Condominium. Therefore, WSD#363 clearly exercises indicia of ownership of the sewer lines in the Big Sky Hidden Village Condominium. WSD#363agreed toprovide service to all 198 units in the PUD. Consequently, the annual assessment HVIpays to Gallatin County includes payment to WSD#363. Theundisputed evidence contained in the affidavits indicates that Lone Mountain Springs and WSD#363 claim ownership of the systems they operate andmaintain. Theevidence of maintenance and repair substantiates that claim. Tothe contrary, although Big Sky Hidden Village Condominium claims ownership of the systems, it provides noevidence to support its claim. TheCondominium failed to present apersuasive argument in its brief to support ownership of the water and sewer systems. Therefore, because WSD#363 owns the sewer system that services the Big Sky Hidden Village Condominium and Lone Mountain Springs owns the water system that services the Big SkyHidden Village Condominium, the District Court correctly determined that Big Skymaynot interfere with orcontrol Lone Mountain Springs' or WSD#363's service and hook ups.

18Affirmed.

i9