NO. 93-183

IN THE SUPREME COURT OF THE STATE OF MONTANA

1993

DAN BUCKLEY and ROBERT DOUGLAS and

DONNA DOUGLAS, ALBERT ADAMS and

MARILYN ADAMS, GLORIA DOYLE, CHET

DREHER and VERA DREHER, LOUIS DYLL,

JAMES DYLL, DONALD FREDRICKSON,

LOUISE FULBRIGHT, GARY GUTHRIE and

JILL GUTHRIE, DAVID HARTNETT, RICHARD

JORGENSEN, DONALD LAIS, KATE LAWLER,

VICTORIA MACLEAN, THOMAS MCBRIDE,

INDIA SUPERA and LAUGHING WATER,

CHRIS YAHVAH, DOUG POWELL and SONIA

POWELL, JAMES POWELL, GAIL WILSON and

PAUL WILSON, EUGENE NIXON and NORMA

NIXON and STEVE BALAZS and JANELLE BAIAZS,

Plaintiffs and Respondents,

BLAKE WORDAL, LINDA STOLL-ANDERSON,

and DAVID FULLER, in their capacity

as Lewis and Clark County Commissioners,

LEWIS AND CLARK COUNTY, a local

governmental unit and political division

of state government, and MONTANA ATTORNEY

GENERAL MARC RACICOT,

Defendants and Appellants.

APPEAL FROM: District Court of the First Judicial District,

In and for the County of Lewis and Clark,

The Honorable James E. Purcell Judge presiding.

COUNSEL OF RECORD:

For Appellants:

K. Paul Stahl,

Montana

Deputy County Attorney, Helena,

For Respondents:

John C. 'Doubek 8 Carl A. Hatch, Small, Hatch,

Doubek and Pyfer, Helena, Montana

Submitted on briefs: October 28, 1993

Decided: December 7, 1993
Justice James C. Nelson delivered the Opinion of the Court,

Defendants/Appellants appeal an order of the First Judicial

District Court, Lewis and Clark County, stating that the

Defendants/Appellants had not complied with a prior modified order

and ordering them to delete or refund rural improvement district

assessments and re-notice the hearings which initiated the rural

improvement district process. We reverse.

We state the issues on appeal as follows:

1 . Did the Board of County Commissioners for Lewis and Clark

County (BOCC) timely file its notice of appeal?

2. Did the BOCC follow the correct statutory procedures when

it created the Colorado Gulch Rural Improvement District (CGRID)?

3 . Did the District Court err in holding that the BOCC

failed to hold adequate public hearings when creating the CGRID?

The BOCC also contends that the plaintiffs did not file a

timely complaint. Given our holdings on the above issues, that

issue is moot.

The current controversy began in 1991, when landowners in the

Colorado Gulch area formed a committee to address various road

problems. However, the controversy regarding improvements to the

road in question has a long history, and the BOCC has been actively

involved since as early as 1984 or 1985.

On March 23, 1992, the committee called a meeting of all

landowners in the Colorado Gulch area to vote on whether to form a

rural improvement district. At this meeting, each parcel of

property in the area for which a property identification number

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could be traced was given a vote, and the assessed value of each

parcel was not taken into consideration. A vote regarding the

rural improvement district was taken, and the majority of

landowners present opposed creating the district.

After the March, 1992, meeting, the original committee was

disbanded. Thereafter, a *'splinter group " from the committee sent

a letter to all Colorado Gulch landowners, revealing their intent

to attempt to persuade the BOCC to create a rural improvement

district for the purpose of having the road chip-sealed.

The BOCC requires that, prior to any formal action on a

proposed improvement district, a petition from the potentiallyaffected landowners be filed evidencing a "significant interest" in

the creation of such a district. The purpose of this requirement

is to avoid county staff time being wasted if no interest exists

for the creation of a district.

In this case, the "splinter group" filed the required

petition. Based on that petition, the BOCC found significant

public interest in the rural improvement district, and adopted a

resolution of intent to create the CGRID on April 28, 1992. After

the adoption of the resolution to create the CGRID, a Notice of

Resolution of Intent and Public Hearing was sent to all property

owners in the proposed district. The notice informed the

landowners of the adoption of the resolution to create the CGRID,

indicated the nature of the proposed improvements and maintenance,

and proposed a formula to be used for assessments. The notice also

provided estimated costs, informed the landowners of their right to

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file a written protest within fifteen days (by 5:00 p.m. on May 18,

1992), and informed the landowners that the public hearing was

scheduled for May 19, 1992.

All written protests were properly filed by May 18, 1992. On

the morning of May 19, 1992, two landowners filed rescissions of

their prior written protests.

The BOCC held the public hearing on May 19, 1992. At that

time, staff members informed the BOCC that further work was

required to answer questions raised by various protests. After

some discussion, the BOCC chairperson requested comments from the

audience, and one person spoke. Following that person's comments,

the chairperson again requested questions or comments, but no one

responded. The chairperson of the BOCC then publicly announced

that the hearing was adjourned and continued until May 26, 1992, in

order to allow the staff time to address the validity of certain

protests.

At the May 26, 1992, hearing, staff members again informed the

BOCC that additional time was needed to complete a review of the

protests. The chairperson of the BOCC again publicly announced

that the hearing was adjourned and continued until May 28, 1992.

At the May 28, 1992, hearing, the BOCC heard and passed on all

protests submitted prior to the May 18 deadline. Dorothy Carrico

and Leah Tursich rescinded their protests by written request, and

the BOCC accepted those rescissions. The BOCC rejected a protest

filed by Don Dais because both record landowners did not sign the

protest. A protest filed by James Powell was rejected for one

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parcel because the parcel had been deeded to the Smiths, who did

not wish to protest. The BOCC rejected three protests signed by

Laughing Water because the joint tenant, India Supera, did not sign

the protests and Mr. Water did not present a written power of

attorney to sign on her behalf. The protest total, after the BOCC

accepted the rescissions and rejected the above protests, was 44.5%

of the landowners. After this hearing, the BOCC adopted a

resolution creating the CGRID.

On July 1, 1992, the plaintiffs, all of whom own real property

affected by the CGRID, filed a complaint alleging violations of

Montana statutes and constitutional provisions. The plaintiffs

sought temporary and injunctive relief and a writ of prohibition,

as well as a declaratory ruling that gg 7-12-2101, et seq., MCA,

were unconstitutional.

District Judge Thomas Honzel deemed himself disqualified and

invited District Judge James Purcell to assume jurisdiction, which

Judge Purcell did on July 7, 1992. On July 22, 1992, the District

Court ordered the BOCC to show cause why injunctive relief should

not be granted. A hearing was held on August 11, 1992. During

that hearing, the protest total calculated at the May 28, 1992,

meeting was revised to 45.45%. as Don Isis' protest was accepted

after he submitted a quit claim deed evidencing his sole ownership

of the property in question.

On August 13, 1992, the District Court issued findings of

fact, conclusions of law, and an order denying relief to the

landowners "under any theory." However, the District Court

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chastised the BOCC for taking the "most convenient statutory route

. . . without debating the substantive nature of the protestor's

complaints."

The plaintiffs moved the District Court to modify its August

13, 1992, order and the BOCC failed to file a response. On August

18, 1992, the BOCC adopted a resolution levying and assessing a tax

upon all benefitted property within the CGRID. On September 3,

1992, the l3OCC held a hearing to receive and consider objections to

the assessments proposed to be levied on the landowners' property.

The chairperson opened the discussion to comments about the

assessments and to questions and comments regarding the creation of

the CGRID and the BOCC's actions. After this hearing, the BOCC

delivered the final resolution creating the CGRID to the county

treasurer for assessment purposes.

On September 16, 1992, the District Court "amended" its

original order dated August 13, 1992, apparently based on the

BOCC's failure to respond to the plaintiffs' motion to modify. In

that modified order, the District Court ordered the BOCC to renotice the hearings and allow all the Colorado Gulch landowners an

opportunity to participate in the hearings. By this time, the

chip-sealing of the road had been completed.

On September 17, 1992, the BOCC moved the District Court to

modify its "modified order" and requested a hearing. The District

Court took no action on the BOCC motion and did not hold a hearing.

Then, on November 27, 1992, the plaintiffs moved the District Court

to enforce the September 16, 1992, modified order. On January 8,

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1993, the District Court ordered the BOCC to show how it had

complied with the modified order or to re-notice the hearings. The

BOCC filed proof of compliance with the modified order on January

15, 1993, and the District Court heard oral argument on February 9,

1993.

On March 10, 1993, the District Court issued a final order

stating that the ROCC had failed to comply with the September 16,

1992, modified order by refusing to re-notice the hearings, and

ordered the county to mail retroactive notices to delete or refund

the CGRID assessments, and to re-notice the hearings which

initiated the CGRID process. From that order, the BOCC appeals.

Our standard of review relating to conclusions of law is

whether the trial judge's interpretation of the law is correct.

Steer, Inc. v. Dep't of Revenue (1990), 245 Mont. 470, 474-75, SO3

P.2d 601, 603.

I - NOTICE OF APPEAL

Plaintiffs contend that the BOCC did not timely file its

notice of appeal and that this appeal should be dismissed. We

disagree.

The basis for the plaintiffs' argument is that the BOCC is

appealing from the District Court's decision filed September 16,

1992, and that the notice of appeal filed March 12, 1993, is not

timely. The plaintiffs contend that, although the District Court

issued an order on March 10, 1993, that order simply determined

that the BOCC had not complied with the "final" judgment of the

District Court entered on September 16, 1992.
Rule 5(a)(l), M.R.App.P., requires that, when the appellant is

. . a political subdivision of the state, the notice of appeal must be

filed within sixty days from the entry of the judgment z from the

service of notice of entry of judgment. We have previously held

that the time for filing an appeal does not begin to run until the

prevailing party serves a notice of entry of judgment. In re

Marriage of Robertson (1989), 237 Mont. 406, 411, 773 P.2d 1213,

1217. If the prevailing party does not serve a notice of entry of

judgment, the time for appeal never begins to run. See Robertson,

773 P.2d at 1217.

In this case, the plaintiffs never served a notice of entry of

judgment on the BCCC, either for the September 16, 1992, order,

which the plaintiffs contend is the "final" judgment in this case,

or for the March 10, 1993, order. Therefore, because no notice of

entry of judgment was filed and served, the sixty-day appeal time

never began to run on either order. Thus, the BOCC's appeal was

timely, and we need not address the issue of whether the September

16, 1992, order or the March 10, 1993, order was the VXfinala

judgment in this case.

II - STATUTORY PROCEDURES

The BCCC contends that, contrary to the District Court's

conclusion, it followed the correct statutory procedures when it

created the CGRID. We agree.

Sections 7-12-2101, et seq., MCA, provide the statutory

framework by which a county may create a rural improvement

district. This statutory scheme provides a nine-step process which

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requires notice and the opportunity to be heard. We will address

each step in turn.

A. RESOLUTION OF INTENTION

The first step in the statutory process of creating a rural

improvement district requires a resolution of intention. Section

7-12-2103, MCA, provides, in pertinent part:

(1) Before creating any special improvement district for

the purpose of making any of the improvements or

acquiring any private property for any purpose authorized

by this part, the board of county commissioners shall

pass a resolution of intention to do so.

(2) The resolution shall:

(a) designate the number of such district:

(b) describe the boundaries thereof:

(cl state therein the general character

of the improvements which are to be

made:

(d) designate the name of the engineer

who is to have charge of the work

and an approximate estimate of the

cost thereof: and

(e) specify the method or methods by

which the costs of the improvements

will be assessed against property in

the district. . . .

"The resolution of intention is the primary step to be taken in

every [proposed creation of a rural improvement district]. It is

the basis of the whole proceeding." Billings Bench Water Ass'n v.

Yellowstone County (1924), 70 Mont. 401, 408, 225 P. 996, 999. In

this case, the BOCC adopted Resolution of Intention No. 1992-51 at

a public hearing on April 28, 1992. The plaintiffs have not

challenged the contents or the adoption of the resolution of

intention.

B. NOTICE OF RESOLUTION OF INTENTION

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After the resolution of intention is passed, notice of that

resolution must be given. Section 7-12-2105, MCA, provides, in

pertinent part:

(1) Upon having passed the resolution of intention

pursuant to 7-12-2103, the board of county commissioners

must publish notice of the passage of such resolution of

intention as provided in 7-12-2121.

(2) The board shall also cause a copy of such notice to

be posted in three public places within the boundaries of

such special improvement district. A copy of such notice

shall be mailed as provided in 7-1-2122 to every person

. . . owning real property within the proposed district

listed in his name upon the last completed assessment

roll for state, county, and school district taxes.

In addition, subsection (3) of § 7-12-2105, MCA, lists a number of

specific details which must be provided in the notice.

Compliance with the notice requirement is essential, as the

failure to give notice of the intention to create a rural

improvement district deprives the county of jurisdiction to

proceed. Billinas Bench Water Ass'n, 225 P. at 999. In this case,

the BOCC published, posted, and mailed notice to all the landowners

in the proposed district, and its actions complied with the

statute. All landowners were given notice and, in fact, none of

the plaintiffs have contended that the required notice was not

given. Therefore, the BOCC met this statutory requirement.

C. RIGHT TO PROTEST CREATION OF DISTRICT

After notice of the intent to create the resolution is given,

the affected landowners must be given the opportunity to protest

the creation of the district. Section 7-12-2109, MCA, provides, in

pertinent part:

At any time within 15 days after the date of the first

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publication of the notice of the passage of the

resolution of intention, any owner of property liable to

be assessed for said work may make written protest

against the proposed work or against the extending or

creation of the district to be assessed, or both. Such

protest must be in writing, identify the property in the

district owned by the protestor, and be signed by all

owners of the property. . . .

Here, the BOCC mailed the Notice of Resolution of Intent and public

Hearing on April 30, 1992. This notice contained the following

language:

Any owner of property within the proposed district may

make protest against the creation of the district. Such

protest must be in writing, identify the property in the

proposed district by legal description or PIN number, and

be signed by all owners of the property. Protests must

be deliveredtothe Countv Treasurer/Clerk and Recorder's

Office no later than 5~00 v.m.. on Mondav, Mav 18. 1992.

. . .

This notice contained all the statutory requirements and gave the

affected landowners the opportunity to protest the creation of the

CGRID. Again, the plaintiffs have not alleged that they were not

given the statutory fifteen days to file written protests. The

BOCC complied with the third step in the statutory process.

D. HEARING ON PROTESTS

After all written protests have been filed, a hearing on those

protests must be held. Section 7-12-2111, MCA, provides, in

pertinent part:

(1) At the next regular meeting of the board of county

commissioners after the expiration of time within which

protest may be made, the board shall proceed to hear and

pass upon all protests so made, and its decision shall be

final and conclusive. The board may adjourn said hearing

from time to time.

The importance of hearing and passing on the protests is

illustrated by 5 7-12-2112, MCA, which provides, in pertinent part:

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(1) Except as provided in subsection (2), no further

proceedings shall be taken for a period of 6 months from

the date when said protest was received by the county

clerk when the board of county commissioners finds that

such protest is made by the owners of property in the

district to be assessed for more than 50% of the cost of

the proposed work, in accordance with the method or

methods of assessment described in the resolution of

intention.

Pursuant to this statute, the affected landowners can 'Ublock*' the

proposed district, for a period of six months, by filing an

adequate amount of protests.

On May 19, 1992, the BOCC held a public hearing to determine

the validity of the protests which had been filed by affected

landowners. At that time, staff members informed the BOCC that

more time was required to research the validity of certain

protests. The hearing was then publicly adjourned and continued to

May 26, 1992. At the May 26 hearing, staff members again requested

additional time, and the BCCC again publicly adjourned and

continued the hearing until May 25, 1992.

One of the primary issues raised by the county staff at the

May 28 hearing was that of ownership. The BOCC was required to

determine ownership of each affected parcel to determine the

validity of certain protests and to ascertain if the proper owners

registered a protest.

Section 7-12-2110, MCA, defines "owner*' as the person owning

the fee, the person with legal title, or the person in possession

of the land. Section 7-12-2105, MCA, requires that the names of

the owners of the affected land be taken from the last completed

assessment roll for state, county, and school district taxes.

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Based on these statutes, and on 5 7-12-2109, MCA, which requires

that the written protest be signed by all owners of the property,

the BDCC required that all owners listed on the assessment roll

sign the written protest. If that was not done, the BOCC rejected

the protest.

For example, Laughing Water signed a written protest on three

parcels owned jointly by him and India Supera. However, Ms. Supera

was out of the country and did not sign the protest. Mr. Water

attempted to file a protest and signed Ms. Supera's name by power

of attorney. However, it was discovered that Mr. Water had no

written power of attorney from Ms. Supera. To have any legal

authority, a power of attorney must be given pursuant to a written

instrument. See 95 70-15-304 and 72-5-501, WCA. In this case, Mr.

Water presented no written power of attorney, and the BOCC properly

concluded that the protest filed by Mr. Water must be rejected,

because all owners did not sign the protest as required by 5 7-12-

2109, MCA. Bob Scow also filed a protest by power of attorney on

behalf of Mohammad Iianif, which was accepted by the SOCC, because

Mr. Scow presented a written power of attorney.

The BOCC rejected the protest of Don Lais on two parcels,

because the county assessment records revealed that the two parcels

were owned by Don Lais and Luanna Cowen. Because Ms. Cowen did not

sign the protest, it was rejected. At the District Court hearing

on August 11, 1992, the plaintiffs admitted a quit claim deed from

Ms. Cowen to Mr. Lais, and the protest was subsequently accepted.

In addition, the BDCC allowed two landowners, who had filed

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written protests prior to the Way 18, 1992, deadline, to rescind

the protests after that deadline. Leah Tursich filed a written

protest: however, it was not signed by the other owner of the

parcel, Joe Tursich. Both parties signed the rescission. In

addition, Dorothy Carrico signed a protest and then rescinded the

same. We note that, based on the analysis above, Ms. Tursich's

protest was not valid in any case, because all owners of the

property had not signed the protest. Therefore, whether the BCCC

properly accepted her rescission is moot. However, we must address

whether the BCCC properly accepted the rescission of Ms. Carrico.

We have not previously ruled on whether a board can accept a

rescission under its discretionary authority "to hear and pass upon

all protests." Section 7-12-2111, MCA. However, we have

previously ruled on a similar issue in Ford v. Mitchell (1936), 103

Mont. 99, 61 P.2d 815. In Ford, the plaintiff sought to restrain

the Secretary of State from certifying an initiative. I n

discussing the withdrawal of names from the initiative petition, we

stated that '*any person signing the petition has an absolute right

to withdraw his name at any time before the person or body created

by law to determine the matter submitted by the petition has

finally acted.n Ford, 61 P.2d at 822. We apply this reasoning to

the case at hand, and hold that a landowner has the right to

withdraw his or her protest prior to the time the board holds the

hearing to pass on the protests. Therefore, when Ms. Carrico

rescinded her written protest prior to the May 19, 1992, hearing,

her rescission was valid and the BOCC properly accepted the same.

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After the SOCC heard and passed on all the protests, the total

protest vote on May 28, 1992, totaled 44.5% of the eligible

property values. We note that, notwithstanding, had the BOCC

accepted every written protest which was filed, including those of

Mr. Water, Ms. Supera, and Mr. Lais, and rescinded those who no

longer wished to protest, including Ms. Tursich and Ms. Carrico,

the total amount of protests would have been 48.65%, which was not

enough, under 5 7-12-2112, MCA, to prevent the BOCC from proceeding

to create the CGRID.

The plaintiffs have made issue of the fact that the 8OCC

adjourned the Way 19, 1992, meeting until Way 26, 1992, and then

again until Way 28, 1992. However, we note that 5 7-12-2111, MCA,

specifically states that the "board may adjourn said hearing from

time to time." In this case, the adjournment of the hearing was

necessary to allaw the staff to adequately research and prepare

responses to certain protests. The BOCC adjourned each hearing

with a specific time and place given for continuation of the

hearing, and was authorized to do so under 5 7-12-2111, MCA. We

hold that the BOCC complied with the statutory requirements for

holding a public hearing to pass on the protests.

E. RESOLUTION CREATING DISTRICT

If, pursuant to § 7-12-2112, MCA, the proposed district is not

*'blocked*t by the affected landowners, the board has the power to

create the proposed district. Section 7-12-2113, MCA, provides, in

pertinent part:

(1) Before ordering any of the proposed improvements, the

board of county commissioners shall pass a resolution

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creating the special improvement district in accordance

with the resolution of intention theretofore introduced

and passed by the board.

In this case, the affected landowners did not present sufficient

valid protests to prohibit the DOCC from passing a resolution

creating the CGRID and the DOCC, within its authority, passed

Resolution No. 1992-65 on Way 28, 1992, in compliance with

statutory requirements.

F. RESOLUTION FOR LEW AND ASSESSMENT OF TAX

After the board passes the resolution which creates the rural

improvement district, it must pass a resolution to levy and assess

a tax against the affected landowners. Section 7-12-2158, MCA,

provides, in pertinent part:

(1) To defray the cost of making or acquiring

improvements in any special improvement district, the

board of county commissioners shall by resolution levy

and assess a tax upon all benefited property in the

district created for such purpose, by using for a basis

for such assessment the method or methods provided for by

this part and described in the resolution of intention.

The statute further provides a list of particulars the resolution

must contain. In this case, the BOCC adopted a resolution to levy

and assess taxes on August 18, 1992. The resolution adopted by the

ROCC complied with the statutory requirements, and the plaintiffs

have not alleged otherwise.

G. NOTICE OF RESOLUTION FOR LEW AND ASSESSMENT OF TAX

After adopting the resolution for levy and assessment of

taxes, the board must give notice of that resolution. Section 7-

12-2159, RCA, provides, in pertinent part:

(1) A notice, signed by the county clerk and stating that

the resolution levying a special assessment to defray the

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cost of making the improvements is on file in the office

of the county clerk and is subject to inspection, shall

be:

(a) published as provided in 7-1-2121;

(b) mailed to the owner of each lot, tract,

or parcel of land to be assessed . . .;

and

Cc) mailed to such other persons known

to the clerk to have an ownership

interest in the property.

In addition, the notice must state the time and place in which

objections to the final adoption of the resolution will be heard by

the board. Section 7-12-2159(2), RCA.

In this case, legal notice was mailed on August 20, 1992, and

published as required by statute on August 21 and 28, 1992. Again,

the plaintiffs have not alleged that proper notice of the

resolution for levy and assessment of taxes was not given, and we

hold that the DOCC complied with the seventh step in the process of

creating a rural improvement district.

H. HEARING ON PROTEST

After notice of the resolution for levy and assessment of

taxes is given, the board must "meet and hear all such objections"

as the affected landowners may present. Section 7-12-2160, RCA.

In this case, the DOCC held a hearing on September 3, 1992, in

which it heard all objections, both regarding the assessment and

the CGRID process itself. By holding the hearing, the DOCC

satisfied its statutory requirement. The DOCC chose not to

reconsider the adoption of the CGRID, and it was not required to do

so under the statutory scheme enacted by the legislature.

I . DELIVERY OF RESOLUTION

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The last reguirement in the creation of a rural improvement

district mandates that the final resolution creating the rural

improvement district be delivered to the county treasurer within

two days after its passage. Section 7-12-2160(2), FICA. Here, the

BOCC properly forwarded the resolution to the treasurer for

assessment purposes, and the plaintiffs have not challenged the

BOCC's compliance with this final statutory step.

In summary, after reviewing each and every one of the nine

statutory steps required to complete the process of creating a

rural improvement district, we conclude that the BOCC complied with

each of these requirements.

III - FAILURE TO HOLD ADEQUATE PUBLIC HEARINC

The District Court held that the BOCC failed to hold adequate

public hearings when it created the CGRID. We disagree.

In its March 10, 1993, order, the District Court stated that

the plaintiffs had been denied their constitutional and statutory

rights of a fair hearing and public participation, as no public

comment or participation was solicited at the May 26, 1992, or May

28, 1992, hearings. As stated above, § 7-12-2111, MCA, allows the

board to adjourn these hearings. Based on our discussion above, it

is clear that the BOCC followed each and every step in the ninestep statutory process when it created the CGRID. The legislature

has designed the process a board of county commissioners must

follow to create a rural improvement district. Whether or not the

opportunity for more public participation should be given is a

matter left to the discretion of the legislature. Given the

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statutory requirements now in place, we hold that the BOW's

hearings complied with those mandates. The District Court erred in

concluding that the BOCC failed to comply with the statutes and in

requiring the BOCC to delete or refund the CGRID assessments and to

re-notice the hearings and provide further opportunity to

participate.

Reversed.

We Concur:

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