No. 90-505 IN THE SUPREME COURT OF THE STATE OF MONTANA 1991

JAMES PAUL SANDERS and KATHY SANDERS, Plaintiffs and Appellants,

SCRATCH GRAVEL LANDFILL DISTRICT and DOES ONE THROUGH TEN. Defendants and Respondents. CLERKOFEjUPRENlECOUR? STATEOF MBNYAPdA

APPEAL FROM: District Court of the First Judicial District, In and for the County of Lewis and Clark, TheHonorableJeffreyM. Sherlock,Judgepresiding.

COUNSEL OF RECORD: For Appellants: CarlA. Hatch; Small, Hatch,Doubek & Pyfer, Helena, Montana For Respondents: Mike McGrath, County Attorney, Lewis and Clark County, Helena, Montana

Submitted on Briefs: May 30, 1991 Decided: July 15, 1991 Filed:Justice John Conway Harrison delivered the Opinion of the Court.

James and Kathy Sanders appeal from an order of the District Court of the First Judicial District, Lewis and Clark County, Montana, granting the motion of Scratch Gravel Landfill District to dismiss their suit. TheDistrict Courtheld that ScratchGravel Landfill District was immune from suit. We reverse and remand to the District Court. The issue iswhether the District Court erred in determining that, as an agent of a legislative body, Scratch Gravel Landfill District was immune from suit. James and Kathy Sanders bought a home in Western Hills Subdivision, a few miles north of Helena, Montana, in 1987. In 1989 the couple learned that the aquifer from which they obtained their water hadbecome contaminated with toxic chemicalswhich they alleged were leached from a nearby dump owned and operated by Scratch Gravel Landfill District. The Landfill District claimed that the chemicals came from a different source, namely from cleaning solvents dumped for years by laundry and dry cleaning establishments into a mine shaft above the property owned by the Landfill District. Because of the contaminated water supply, the Sanders eventually moved from their home, even though they were unable to sell it. The Sanders filed suit against the Landfill District seeking to recover damages resulting from contamination of their water supply. The Sanders learned of the water contamination when theLandfill District called a meeting on January 24, 1989, to inform local homeowners that the aquifer from which they obtained their water had become contaminated with toxic chemicals. The Landfill District offered toprovide bottled water fordrinking and cooking to those whowere using contaminatedwater. The contaminatedwater

was said tobe safe forbathing, washing dishes, andwatering lawns and gardens. The Landfill District held other meetings to keep property

owners informed and eventually offered a plan to the affected landowners. Ina written agreement signedby the Sanders and other homeowners, the Landfill District agreed to provide a new water

source and delivery system. In exchange, thehomeowners agreed to release the Landfill District from I1liabilityfor inconvenience, mental anguish and temporary loss of propertyvalues resulting from alleged degradation of ground water." The agreement allowed the homeownersto retainall "rightsto seek compensation forany longterm or permanent loss of property value 

# . . ." except for llpotentialpersonal injury claims for damages due to alleged contamination of Homeowners1ground water." Before the Landfill District could implement a new water

sourceand system,the Sandersdecided inJanuary 1990tomove from their home claiming they wanted to escape further health risks. According to the Sanders, realtorsrefused to list theirhome until thenewwater supplywas in operation. 

### A realtoreventually agreed to list their house with the understanding that full disclosure of the toxicwaterproblems beprovided topotential buyers. When the Sanders were unable to sell their house, they filed suit againstthe Landfill District and "allunknown defendants Does One through Ten" seeking damages for permanent or long-term loss of value to the property.

The issue is whether the District Court erred in determining that ScratchGravel Landfill Districtwas immune from suitpursuant to 5 2-9-111, MCA. The Landfill District argues that it is immune from suit according to our holding in Burgessv. Lewis and Clark City-County Board of Health (Mont. 1990), 796 P.2d 1079, 47 St.Rep. 1619. In Burqess, we held that an employee of the Scratch Gravel Landfill District could not sue the Lewis and Clark City-County Board of Health, which serves as the board of directors of the Landfill District. The Board, as an agent of a legislative body, the Lewis and Clark County Board of Commissioners,was immune from suitunder S 2-9-ll(2) MCA, extending governmental immunity to a I1legislativebody or a member, officer, or agent thereof.I1 For the past number of years this Court has been divided on the question of legislative immunity granted by 2-9-111, MCA, enacted in 1977. Case after case has brought dissent. See Love

v. Harlem Irrigation District (Mont. 1990), 802 P.2d 611, 47 St.Rep. 2190;Kochv. Yellowstone County (1990),243 Mont. 447, 795 P.2d 454 (Judge Larry Moran, specially concurring); Eccleston v. Third Judicial District Court (1989), 240 Mont. 44, 783 P.2d 363; and Petersonv. Great Falls School DistrictNo. 1and A (1989),237 Mont. 376, 773 P.2d 316. District Court Judge Larry W. Moran, sitting with the Courtin Koch, noted in a concurring opinion: How beneficial it would be to see (or to write) an opinion on governmental immunity considering provisions of 5 2-9-111, MCA, simply concluding: "the act giving rise to the cause of action is clearly administrative or executive, not legislative. Hence,governmental immunity does not attach1'--or the reverse, in applicable situations. That day has now arrived. The 1991 legislature amended § 2-9- 111, MCA, by SB 0154 to read: Immunity from suit for legislative acts and omissions. (1) As used in this section: (a) the term I1governmentalentityv1 means only the state, counties, municipalities, school districts, and any other local government entity or local political subdivisionvested with legislative power by statute; (b) the term lllegislativebody1' means only the legislature vested with legislative power by Article V of The Constitution of the State of Montana and that branch orportion of any other local governmental entity or local political subdivision empowered by law to consider and enact statutes, charters, ordinances, orders, rules,policies, resolutions, or resolves; (c) (i)the term lllegislative actv1 means: (A) actions by a legislative body that result in creation of law or declaration of public policy; (B) other actions of the legislature authorized by Article V of The Constitution of the State of Montana; or (C) actionsby a schoolboard thatresult inadoption of school board policies pursuant to 20-3-323(1); (ii) the term legislative act does not include administrative actions undertaken in the execution of a law or public policy. (2) A governmental entity is immune from suit for a legislative act or omission by its legislativebody, or any member or staff of the legislative body, engaged in legislative acts. (3) 

### Any member or staff of a 

### legislative body is immune from suit for damages arising from the lawfula 

### - i 1 discharge of an officialduty~associated with legislative acts of the legislativebody. (4) Theacquisitionof insurance coverage, including self-insurance orgroup self-insurance,by agovernmental entity does not waive the immunity provided by this section. (5) The immunity provided for in this section does not extend to any tort committed by the use of a motor vehicle, aircraft, or other means of transportation.

Section 3. Effective date 

## -- retroactive applicability. [This act] is effective on passage and approval and applies retroactively, within the meaning of 1-2-109, to causes of action that have not been reduced to final judgment on or before [the effective date of this act]. Section 2-9-111,MCA (1991). We conclude that Buraess is no longer controlling. In view of the revisions in 3 2-9-111,MCA, as above set forth, including the effectivedate,this issue must be reconsideredby the District Court. We reverse the decision of the District Court and remand for reconsideration.

We concur:

Chief Justice