No. 13599 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

THE STATE OF MONTANA, ACTING BY AND THROUGH 

THE STATE HIGHWAY COF@TISSION OF THE STATE OF 

MONTANA, 

Plaintiff and Appellant, 

HAZEL MARSH, 

Defendant and Respondent. 

Appeal from: District Court of the Third Judicial District, 

Honorable Robert J. Boyd, Judge presiding. 

Counsel of Record: 

For Appellant: 

Daniel J. Sullivan argued, Helena, Montana 

For Respondent: 

Mulroney, Delaney, Dalby and Mudd, Missoula, Montana 

Dexter L. Delaney argued, Missoula, Montana 

submitted: November 30, 1977 

~ecided :JAN 2 0 1970 
Mr. Justice Frank I. Haswell delivered the Opinion of the Court. 

This is an appeal from a judgment rendered in a condemnation action involving the acquisition of property by the state 

for the purpose of interstate highway construction. 

This case came before this Court previously on an appeal 

brought by the landowner, Hazel Marsh, from the judgment rendered 

in the original District Court trial, State Hwy Comm'n v. Marsh 

(1974), 165 Mont. 198, 527 P.2d 573. In that case we ordered a 

new trial, holding that the District Court committed reversible 

error in not allowing the landowner to express an opinion on the 

value of her land. 

The land condemned by the state consists of 152.5 acres 

in 13 different parcels of irregular shape. The parcels range in 

size from .04 acre to 113.53 acres. As a result of the "take", 

46.08 other acres are landlocked and the landowner is totally deprived of the use of this land. The total "take" is therefore 

198.58 acres. The parcels of land taken are immediately adjacent 

to 4-1/2 miles of Clark Fork River frontage in Granite County, 

Montana. 

This case was retried to a jury in April, 1976. At trial 

the landowner testified as to her ownership of the land in question and that the land was being used as a cattle ranch. She 

testified that her ranch consisted of some 7,000 acres of deeded 

land along with 1,860 acres of leased land. The landowner expressed her familiarity with the boundaries and terrain of both 

her ranch in toto and the condemned land. She testified that 

the portion of her ranch which abuts the Clark Fork River is the 

most valuable portion because it contains rich cropland, water 

for her livestock, and in addition, recreational potential. The 

carrying capacity of the ranch was 450 animal units prior to the 

taking and as a direct result of the taking the capacity has been 

decreased by approximately 125 animal units. 
The landowner was allowed to testify as to her opinion 

of the value of the taken land. She placed the value of the 

198.58 acres at $800 per acre. The record clearly reflects 

that the basis for this opinion was a comparison of her land 

with land involved in three sales of small tracts of river frontage located in the immediate area. Two of these tracts were 

sold for recreational uses and the third for a use unrelated to 

cattle ranching. 

Thereafter, the landowner's appraiser, Roy Rodenberger, 

testified that the highest and best use of the property in question was as an operating cattle ranch with the strong potential 

for river frontage tracts. Rodenberger valued the property according to "the animal unit method". Under this method the total 

ranch value was computed by multiplying the market price per animal unit as derived from similar ranch operations by the total 

carrying capacity. The decrease in carrying capacity directly 

attributable to the take, 123 animal units, was then multiplied 

by market value per unit in order to determine the loss to the 

total ranch operation caused by the take. 

Rodenberger also testified as to other sales of small 

parcels of river frontage of which he was aware. He compared 

the price per acre paid in the other sales with his loss per acre 

calculated from the animal unit method as a cross check. The loss 

per acre calculated from the animal unit method was computed by 

use of the following formula: 

animal units lost x value of an animal unit 

number of acres taken 

A figure of $732 per acre was determined by use of this formula 

and Rodenberger testified that this figure compared fairly with 

the amounts paid per acre for similar properties. 

On April 23, 1976, the jury returned a verdict for the 

landowner for $92,096. The landowner then moved for an additional 
award of $32,312.23 to be included in the judgment. This amount 

represented her alleged necessary expenses of litigation. At 

the hearing on her motion, the District Court took oral argument 

and received various affidavits in support of the expenses she 

claimed. The record does not reveal whether oral testimony or 

exhibits other than affidavits supporting the expenses were presented. 

On May 18, 1976, the ~istrict Court entered judgment 

awarding the landowner, Hazel Marsh, $104,726.70. This amount 

represented the balance of the verdict which she had not previously withdrawn, plus LO percent interest on that balance from 

the date the state took possession of the property in question, 

plus $32,312.23 as her necessary expenses of litigation. The 

state appeals. 

Four issues are before this Court on appeal: 

1. Whether the District Court erred in refusing to strike 

the landowner's appraisal when said appraisal was based on a 

valuation derived from the sale of three small tracts of land 

whose use was different than that of landowner's ranch? 

2. Whether the District Court erred in admitting the 

testimony of Rodenberger, the landowner's appraiser, relative to 

the valuation of the landowner's property for a recreational use 

in small tracts rather than as a whole? 

3. Whether the District Court erred in allowing the 

landowner her necessary expenses of litigation based on a record 

which did not include oral testimony nor exhibits other than the 

affidavits presented here? 

4. Whether the District Court properly computed the rate 

of interest to be paid upon the judgment? 

Both parties agree that State v. Marsh, supra, and the 

cases cited therein are controlling in the resolution of appellant's 
first issue. In Marsh, quoting in part from Alexander v. State 

(1963), 142 Mont. 93, 110, 381 P.2d 780, we stated: 

"'We now restate the rule to be that an owner, 

upon prima facie proof of ownership, shall be 

qualified to estimate in a reasonable way the 

value of his property for the use to which he 

has been putting it. Such owner is not qualified by virtue of ownership alone to testify as 

to its value for other purposes unless he possess, 

as any other witness as to value, "some peculiar 

means of forming an intelligent and correct judgment as to the value of the property in question 

beyond what is presumed to be possessed by men 

generally"'. 

"It should be noted that as stated, this basic 

landowner-witness rule consists of two parts: 

"(1) The landowner on prima facie showing of 

ownership may testify as to value so long as: 

"(a) His testimony is 'reasonable', and 

" (b) The value testified to is for the uses to 

which he is putting the land. 

"(2) However, if the landowner desires to testify 

as to value 'as to other purposes', then: 

"(a) We must have 'some peculiar means of forming an intelligent and correct judgment * * * beyond what is presumed to be possessed by men 

generally. ' " 165 Mont. 203. 

See also: Alexander v. State Highway Commission, supra; 

Rauser v. Toston Irrigation District (1977), Mont . , 565 

The state contends that the landowner has a qualified 

right to express an opinion as to the value of her property for 

the purpose to which the property is being used. The state, 

however, argues that here the landowner lacks the requisite knowledge to enable her to testify as to the value of her land for 

purposes other than the purpose for which it is being used. We 

disagree. 

The landowner had lived on the ranch in question for a 

number of years. She was well aware of the recreational amenities 

of her Clark Fork River frontage. She carefully studied two 
sales of small tracts of property for recreational purposes in 

the area. She participated in the third sale which she used as 

a basis for her opinion. The sum total of these facts certainly 

bestowed upon the landowner herein a means of forming an intelligent and correct judgment of the value of her land beyond 

what is possessed by men generally. 

In the second issue the state urges that the District 

Court erred in allowing the landowner's expert, Roy Rodenberqer, 

to check his animal unit valuation of the ranch with the price 

per acre paid for various small tracts of recreational property. 

The basis for this contention is an argument that the property's 

highest and best use was for a cattle ranch and testimony as to 

recreational purposes was not admissible. Such is not the case. 

Rodenberger testified on two occasions that the highest and best 

use of the property was as an operating cattle ranch with a strong 

potential for river frontage tracts. The District Court, in the 

exercise of its discretion, chose to admit such evidence and we 

find no reason to overturn its decision. 

Appellant's third issue concerns the District Court's 

award of necessary expenses of litigation. After the verdict, 

the landowner filed a "Motion for Award of Necessary Expenses 

of Litigation and Memorandum of Costs and Disbursements" and a 

"blotion for Award of Necessary Expenses of Litigation and Motion 

for Judgment for Final Order of Condemnation". 

The necessary expenses the landowner claimed were: 

Appraisal fee of expert appraiser Roy Rodenberger 

for appraisal and attendance at five days of 

trial in the above captioned action at $150 per 

day including mileage, Missoula to Philipsburg; 

preparation of trial exhibits and other matters 

related to appraisal and testimony at trial . . . .$ 3,300.00 

Expert witness fee of James Lackman for testimony 

at trial and in preparation for trial testimony . . . 400.00 

Expert witness fee of Hank Deschenes for testimony 

at trial and in preparation for trial testimony . . . 400.00 
Aerial photographs, Scott Brown Photography ...... 562.70 

Evergreen Air Service incident to taking 

aerial photographs .................. 66.00 

Appellate costs in State vs. Marsh, including 

preparation of transcript, printing of brief, 

and attorney fees incurred by Defendant to 

Wade Dahood ............ $2,560.00 

Raymond Fox ............ 642.37 

TOTAL .................... .3,202.37 

Attorneyfees ................... 24,138.16 

Motel charges, meals and mileage incurred by 

Dexter L. Delaney in pretrial preparation 

during the period of the trial ............ 243.00 

TOTAL $32,312.23 

In support of these motions the landowner's attorney 

filed an affidavit justifying the expenditures. Regarding the 

attorney fees, affiant stated that the claim represented the 

amount the landowner owed her attorney under a contingent fee 

contract in which the landowner's attorneys were to receive 

33-1/3 percent of the difference between the verdict received in 

the previous trial of this cause ($52,000) and the net judgment 

including interest recovered by the landowner in the new trial. 

In addition, the landowner filed affidavits from three other 

attorneys experienced in condemnation litigation who stated that 

the 33-1/3 percent contingent fee contract that the landowner 

had with her attorneys was the standard fee arrangement in 

condemnation cases. 

The District Court allowed the landowner the full 

$32,312.23 as her necessary expenses of litigation. 

The state contends that affidavits justifying these 

expenditures are not sufficient to support their award, but 

that such an award must be based on other evidence. The landowner contends that because the record does not reveal whether 

oral testimony or exhibits other than these affidavits were 

presented, the award of her necessary expenses of litigation 
must stand. 

We have previously considered what kind of evidence 

must be introduced to support an award of attorney fees. 

First Security Bank v. Tholkes (1976), 169 Mont. 422, 547 P.2d 

1328, 1332, 33 St. Rep. 341; Crncevich v. Georgetown Recreation 

Corp. (1975), 168 Mont. 113, 119-20, 541 P.2d 56, 59. The 

reasonableness of the attorney fee claimed must be shown by 

evidence. Rauser v. Toston Irrigation District, Supra. A 

contingent fee contract is not controlling in demonstrating the 

reasonableness of an attorney fee. Olson v. Carter (1977), 

Mont . I - P.2d , 34 St.Rep. 1539, 1543; Engebretson 

v. Putnam (1977), Mont . , 571 P.2d 368, 34 St.Rep. 1241, 

1247. An award of attorney fees must be based on a hearing 

allowing for oral testimony, the introduction of exhibits, and 

an opportunity to cross-examine in which the reasonableness of 

the attorney fees claimed is demonstrated. Such an award may 

not be based solely on a contingent fee contract between attorney and client. 

In eminent domain proceedings in which contingent fee 

contracts are entered into after July 1, 1977, we note that the 

1977 legislature specifically provided reasonable and necessary 

attorney fees shall be determined on the basis of evidence demonstrating the customary hourly rate for an attorney's services 

in the county in which the trial is held and not on the basis 

of the contingent fee contract. 1977 Mont. Laws, Ch. 48, S1 

(codified at section 93-9921.2, R.C.M. 1947) . 

The state argues that we should extend these requirements to the other items claimed as necessary expenses of 

litigation. A statutory procedure for such a hearing which 

allows for taking of oral testimony, introduction of exhibits, 

and cross-examination already exists. Section 93-8619, R.C.M. 

1947. 
Appellant's final issue concerns the District Court's 

award of 10 percent interest per annum on the condemnation award. 

The state initially filed this condemnation suit on April 29, 

1968, and took possession of the property in question some 

time after that. 

From that time until July 1, 1975, condemnation awards 

drew "lawful interest" (6 percent) from the date on which the 

property owner surrendered possession of the property. Section 

93-9913, R.C.M. 1947 (amended 1975). In 1975 the legislature 

raised the interest rate payable to 10 percent. 1975 Mont. Laws, 

Ch. 534, S1. The jury in Marsh's new trial rendered a verdict 

after the effective date of this amendment. 

The state contends that the proper rate of interest payable in this case is 6 percent for the whole period in question 

and cites in its support the Louisiana case of Long Leaf Lumber, 

Inc. v. Svolos (1972), La.App., 258 So.2d 121. It points out, 

however, that New York cases hold that the old interest rate 

applies up to the date of amendment and the new interest rate 

applies from that time onward. Board of Education v. Sapsin 

(1970), 35 A.D.2d 973, 317 N.Y.S.2d 918; In Re Incorporated Village of Hempstead (1970), 33 A.D.2d 1036, 308 N.Y.S.2d 798. 

Marsh contends that the amendment of the statute should 

be applied retroactively in her case and that the proper interest 

rate payable is 10 percent from the date the state took possession 

of her property. 

In our view it is more equitable to apply the 6 percent 

interest rate up to the effective date of the amendment and to 

apply the 10 percent interest rate from the effective date thereafter. We are supported by the early Montana case of Stanford V. 

Coram (1903), 28 Mont. 288, 293-94, 72 P. 655. In Stanford the 

interest rate payable on judgments received prior to 1899 was 
10 percent. In 1899 the legislature decreased the interest rate 

payable to 8 percent. The Stanford court held the rate of interest payable was 10 percent up to the date of amendment and 8 percent thereafter. When interest is allowed by statute, it is 

given as damages for delay in payment of the principal obligation. Although the legislature can change this measure of 

damages, the rate of interest payable should be that rate current 

in the periods during which the delay in payment has occurred. 

Stanford v. Coram, supra; People v. Sexton (1940), 284 N.Y. 57, 

Marsh argues that although amendments to statutes usually 

apply only prospectively, the legislature in amending section 

93-9913 intended the 10 percent interest rate to be retroactive. 

She points to the following statutory language as evidencing that 

intent: 

" * * * the full amount finally awarded shall 

draw interest at the rate of ten percent (10%) 

per annum from the date on which the property 

owner surrenders possession of the property * * *." Section 93-9913, R.C.M. 1947, (Emphasis supplied by Marsh.) 

"No law contained in any of the codes or other statutes 

of Montana is retroactive unless expressly so declared." Section 12-201, R.C.M. 1947. Although a statute need not say "this 

statute shall be retroactive", the intent that it operate retroactively must be expressed and unmistakable. Davidson v. Love 

(1953), 127 Mont. 366, 370, 264 P.2d 705. That unmistakable 

intent does not exist here. 

The 1975 amendment to section 93-9913 merely substituted 

"interest at the rate of ten percent per annum" for "lawful 

interest". 1975 Mont. Laws, Ch. 534, 81. The language which 

Marsh emphasizes, " * * * from the date on which the property 

owner surrenders possession of the property * * *", was already 

in the statute and was left unchanged. We do not think this 
amendment demonstrates unmistakable intent that the 10 percent 

interest rate apply to periods before July 1, 1975. 

This case must, therefore, be remanded to determine the 

proper amount of interest due applying the 6 percent interest 

rate from the date the state took possession of the property up 

to the effective date of the 1975 amendment and applying the 10 

percent interest rate thereafter and for determination of reasonable attorney fees. 

The cause is remanded to the District Court for further 

proceedings in accordance with this opinion.