No. 13243 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977

GEORGE RAUSER and PHYLLIS A. RAUSER, husband and wife,Plaintiffsand Respondents,

THE TOSTON IRRIGATION DISTRICT, MAURICE L. HUNSAKER, FRANK J. SLIFKA, and SAMUEL F. KIRSKEY, the members of the Board of Commissioners of said TOSTON IRRIGATION DISTRICT, Defendants and Appellants.

Appeal from: District Court of the First Judicial District, Honorable PeterMeloy, Judge presiding. Counsel of Record: For Appellants: Corette, Smith and Dean, Butte, Montana Kendrick Smith argued and Gerald Allen argued, Butte,

Montana Holter, Heath and Kirwan, Bozeman, Montana For Respondents: Harrison, Loendorf and Poston, Helena, Montana James T. Harrison, Jr. argued, Helena, Montana For Amicus Curiae: Thomas Olson, Billings, Montana Alvin E. Bielefeld argued, Billings, Montana

Submitted: March 17, 1977 Decided:

## bjUN -6 Filed: 

### f 

## 6

# i$nMr. Justice John Conway Harrison delivered the Opinion of the Court. George Rauser and Phyllis Rauser, husband and wife, brought this action inthe district court, Broadwater County, against the Toston Irrigation District and members of the Board of Commissioners of that District. The complaint alleged a portion of Rausers' land

was taken without compensation, and construction of the irrigation project with resultant seepage caused water to stand stagnant on approximately forty acres of plaintiffs' land situated alongWarm Spring Creek. It alleged this amounted to the taking of a flood easement. Defendant's motion to strike the individualboard members

aspartieswas granted. Trialwas had before a jury and a verdict returned infavor of Rausers inthe amount of $100,000. The Toston IrrigationProject consists of the Crow Creek pump unit and a water delivery systembuilt as a part of the Missouri River Basin Project. The land tobe irrigated was to serve as a replacement for lands flooded by Canyon Ferry Reservoir. The project began in 1955 with fewer than a thousand acres under irrigation. Atpresent it covers nearly five thousand acres. Plaintiffs arenot members of the Toston Irrigation District but their land 

### isbounded one one sideby land inthe District. The acreage alleged taken 

### is ata lower elevation than land inthe District. Each party presented expert hydrological testimony and expert valuation testimony. Plaintiffs' hydrological expert testified the source of the water on the Rauser property was to the south and east, basing his opinion on well readings taken over a substantialnumber of years. Along with other factors, he took into consideration the extent of irrigation inthe District and the rainfall. He alsoread into evidence from a United States Geological Survey document entitled "Geology and Occurrence of Ground Water inTownsend Valley,Montana" the following statement: "The application of additional irrigationwater to the benchland flankingWarm Spring Creek 

### willincrease the extent of waterlogging inthe bottom land unless provision 

### ismade for more adequate drainage. In thispart of the valley the Tertiary sand and gravel deposits, which aremantled by permeable windblown soil, are underlain by beds of hardened clay, locally referred toas 'hardpan. I If water 

### is applied tothese lands, 

### a gradual rise inthe water table

### willtake place. This rise

### willresult inthe increased flow of existing springs inthe lower part of the valley, and new springs

### willappear along the slope from the benchland to the valley bottom. In this area the valley bottom 

### isunderlain by relatively impermeable finetextured clay. The capillary fringe above the water table 

### willrise to the surface inmuch of the bottom land, saline soilwilldevelop, and the land willeventually become unproductive. Water logging 

### willbecome more extensive if 

### irrigationwater 

### isapplied to the benchland that lies ata higher elevation than the present irrigated land unless provision 

### ismade for more adequate drainage. This condition

### willexist not only inthe Crow Creek area but also inother parts of the valley where additional irrigation 

### is planned.I1 The expert indicated his findings confirmed thisprediction, George Ranser testified the diminution of value because of the "taking" totaled $100,000. Plaintiffs' expert valuation

### witness testified the losswas inthe range of $35,000 basing his opinion on comparable sales of three nearby parcels. Defendant's hydrological expert testified the cause of the flooding on plaintiffs' land was the enlargement of plaintiffs'

own irrigation ditchwhich created a barrier to the natural drainage of the land. Defendant's valuation expert placed the total loss at$26,000. 

### -3-

### The parcel affectedby the water includes the land where plaintiffs' home, shop and outbuildings are located. The United Statesgovernment built and owns the physical assets of the irrigation system. Almost from the beginning of irrigationon the project, therehave been negotiations between Rausers and the District about the flooding of the land and proposals to drain it. 

### The District went so far astodraw up plans and obtain bids for a drain system, but because the bidwas substantially more than expected nothing furtherwas done. The Toston IrrigationDistrict appeals. We summarize the issues asthese: (1) May an irrigationdistrict exercise thepower of eminent domain on a project whose-.physicalassets are owned by the federal government? (2) 

### May therebe a condemnation of property without a showing of negligent design, construction, or operation of the project. (3) Was the actionbarred by laches? 

### (4) Was the verdict supported by substantial credible evidence? 

### (5) Are

### attorney fees allowable? 

### (6)Was there an adequate description of the land here involved? Issue (1) The power to condemn property isgranted to irrigationdistrictsby Montana statute, section 89-1301(3), R.C.M. 

### 1947, and states: "(3) The board

# *

# * * shall alsohave power and authority to acquireby purchase, lease, contract, condemnation, or other legalmeans, lands (and rights inlands) for rights of way, for reservoirs, for the storage of needful waters, and for dam sites, and necessary appurtenances, and such other lands and property asmay be 

### necessary for the construction, use, maintenance, repair, improvement, enlargement and operation of any district system of irrigationworks."That the physical assets are owned by the United States government does not limitthe power to condemn. Section 89-1301(7) clearly indicates substantial federal involvement 

### iscontemplated in "construction, operation, and maintenance of the necessary works for the delivery and distribution of water therefrom

# ** *.'I Defendant argues the trialcourt lacked jurisdiction because the physical assets are owned-bythe United States. This argument must fail forno effortswere made on the part of defendant toremove the

case tofederal court and no case authority 

### is cited or relied upon to support defendant

## 's position. While the District questions whether therewas in fact a taking here and the compensability of it, case law holds there can be a taking without a totalphysical appropriation of land. Here the District didnot condemn the land, rather it caused the land to be permanently invaded by the percolation of water. Similar fact

cases have been considered by the United States Supreme Court recognizing the rights of the damaged landowner. United Statesv. Kansas City Life Ins. Co., 339 U.S. 799, 70 S.Ct. 885, 94 L ed 1277; United Statesv. Lynah, 188U.S. 445, 23 S.Ct. 349, 47 Led 539; 2Nichols

on Eminent Domain, Taking and Damage 56.32. Issue (2). Whether there may be a taking by the District without

a showing of negligence indesign, construction, or operation of the District? In actions for damage for seepage the rule as stated in Fleming v. Lockwood, 36 Mont. 384, 391, 92 P. 962, and quoted in Rhodes v. Weigand, 145Mont. 542, 549, 402 P.2d 588, is: 

# "** * If, in fact, the seepage occurred asplaintiff contends, it must have been the result of negligence on ~ockwood's part, either in constructing or operating the ditch, since it 

### isnot contended that it was the result of inevitable accident orwas caused'byan.act

### of God; and therefore the plaintiff had the burden of proof, in the first instance, to shownegligence on the part of the defendant." The District cites Fleming as authority for the fact that to have a recovery here there must be intentional or negligent acts. Fleming,anegligence case,provided for payment in the case of intentionally caused torts. TheDistrict citesRhodes as authority, but there this Court provided for the issuance of an injunction, noting: 

### "The record in this cause discloses with clarity that appellant in the year 1947,again in 1961and again, after complainthad been made to him of flooding in the year 1962,persisted inhis negligent and deliberate acts.I1 

### Montana's case law does not require a showing of negligence

or a theory of negligencewhen facedwith deliberate or intentional acts. InCalvertv. Anderson, 73Mont. 551, 555, 236 

### P. 

### 847,the Court held: "It is the rule in this state that the owner of an irrigating ditch is not an insurer thereof and is liable only for damages caused by his willful acts or by his negligence in constructing,maintaining or using his ditch." However, as we will discuss later,Fleming and Rhodes are not applicable to the facts of the instant case. InRhodes the court found that the rulewhich requires a showing of negligencewas met by deliberate acts, the flooding of plaintiff's land.The instant action is one for inverse condemnation. The 1972 Montana Constitution,Art. 11, Section 29,

### provides: "Private property shallnot be taken or damaged for public use without just compensation to the full extent of the losshaving been firstmade to 

### or paid into court for the owner. In the event of litigation, just compensation shall includenecessary expenses of litigation to be awarded by the courtwhen the private property owner prevails."

### An early Montana case,Less v. City of Butte, 28Mont. 27, 32, 

### 72 P. 140, in construing this identical language in the 1889 Constitution "Private property shall not be taken or damaged forpublic use without just compensa-tion 

# *

# * *I' 

### said: 

# "**

# * Under constitutionswhich provide that property shallnot be 'takenor damaged' it is universally held that 'it isnot necessary that there be any physical invasion of the individual's property forpublic use to entitle him to compensation.' 

# *

# * *'These easements are property,protected by the constitution from being taken or damaged without just compensation.

## '

# ***Moreover, it may frequently occur that 'the consequentialdamage may impose a more serious loss upon the owner than a temporary spoliation or invasion of the property.

## '" 

### In the ordinary condemnation case necessity,valuation and the like are the issues to be determined---faultor negligence are not considered authority. The rule stated in Fleming that an irrigation district is not an insurer of its ditches from damage

as a result of acts of God or against occasionaldamage which occurs

even though the district has exercised due care,does not apply to the factshere. Here the damage done by the project was foreseeable and foreseen. It was inevitable that Rausers' land would be damaged by the construction of the project, absent remedialwork. Almost from the outset Rausers sought to have the damage remedied and as the amount of water used by the project increased, so did the Rausers' complaints. Where, ashere, the damages are known or knowable and are an inevitable result of the intentional undertaking of the project, there isno need to shownegligent design, construction

or operation. It is enough to show the damageswere proximately caused by the undertaking of the project and a reasonable foreseeable consequence of the undertaking. It is implicit in inverse condemnation that the extent of the damage be of such a degree as to amount to a taking of an interest in the property damaged. Albers

v. County of Los Angeles, 42Cal.Rptr. 89, 96, 398 P.2d 129, 136; 20Hastings Law Journal 431.Historically it appears inevitable to eachnew irrigation project that certain unexplained and unplanned forproblems arise that damage adjacent property owners. Inmany instances there 

### is

no negligence or other wrongful conduct or omission on the part of defendant. The injured property owners have sought redress for damages on the alternative theories of inverse condemnation and tort,

as applied to the facts. Bauer v. County of Ventura, 45 Cal.2d 276, 289 P.2d 

### 1; Granone v. County of Los Angeles, 231 Cal.App.2d 629, 42

Outstanding inthe cases of this type 

### is the holding of the California Supreme Court inAlbers: "From the foregoing analysis of the cases and other legal authorities it 

### is apparent that we arenot required to choose between two absolute rules, one of liability and one of nonliability, but are faced with a more limited issue. The question 

### isnot whether in allcases, a property owner should not be permitted to recover inan inverse condemnation action if a private party would not be liable for damages similarly inflicted, but whether there 

### is or should be a qualification or limitation of that rule to the effect that the property owner may recover in such an action where actualphysical damage 

### isproximately caused tohisproperty by a public improvement as deliberately planned and built 

# ** *." 398 P.2d 136. The California Court concluded that such damages are compensable and adopted five factors for consideration. We find this case applicable to the instant case and adopt asguides the five factors. 1) The damage tothisproperty, if reasonably foreseeable, would have entitled the property owners to compensation; 

### 2) the likelihood of public works not being engaged inbecause of unforeseen and unforeseeable possible direct physical damage to real estate is remote; 3) the property owners did suffer direct physical damage to their properties as the proximate result of theworks as deliberately planned and carried out; 

### 4) the cost of such damage can betterbe absorbed, and with infinitely lesshardship, by the taxpayers as

### awhole, than by owners of the individual parcels, and t5) toquote from Clement v. StateReclamation Board, 35 Cal.2d 628,642, 220 P.2d 897, 905, "the owner of the damaged property ifuncompensated would contribute more than hisproper share to the public undertaking." The California Court then noted, quoting from an ea~rly opinion, Bacich v. Board of Control, 23 Cal.2d 343, 351, 144 P.2d 818, 823, quoting from Sedgwick on Constitutional Law: ""'The tendency under our system 

### is too often to sacrifice the individual to the community; and it seems very difficult in reason to show why the State should not pay for property which it destroys or impairs the value, aswell as forwhat it physically takes. 

# **,*.""'

a Issue 3. The District argues the action 

### isbarred by laches. The project was begun in 1955 and this actionswas not initiateduntil 1973. The evidence reveals that complaints were made to the District almost from the outset and remedial actionwas discussed until sometime just prior to the commencement of this action. Laches 

### is an equitable defense. This Court inDavis v. Steingruber, 131Mont. 468, 470, 311P.2d 784, said: "Laches means negligence inthe assertion of a right, and existswhere there has been a delay of such duration as to render enforcement of the asserted right inequitable

# ."
there isno unexplained delay which would justify

>, ths application of the doctrine of laches and there 

### isno prejudice sufficient tojustify the application of.laches. Thus the action 

### isnot barred by laches. The districtI1sactions lulled plaintiffs throughout the years between the beginning of the District and the filing of the action. Issue (4). 

### Is the verdict supported by the evidence? This involves two questions. First, was the United States Geological report entitled "Geology and Occurrence of Ground Water inthe Townsend Valley,Montana1' admissible into evidence over a hearsay objection? This document contains a detailed description of thegeography, geomorphology, geology, ground water, and chemical quality of the water and has a short summary and conclusion section. Plaintiffs' hydrology expert used the data inthe nearly 50 pages of measurements of water level observation wells along with the general information in the document, as an aid inhis analysis of the ~ausers' probdkm. The expert testified as foundation that (1) the information

was available to the public and others inhisprofession; 

### (2) the document and others like it were recognized as authorities and relied upon by professionals intheir field of work, and 

### (3) the document was prepared inthe normal course of business by the agency prior to the building of the irrigationproject. Section 93-1101-8, R.C.'M. 1947, states: "Historical works, books of science or art, and published maps orcharts, when made by persons indifferent between theparties, areprima-facie evidence of facts of general notoriety and interest." I An early case interpreting section 93-1101-8, Lynes v. Northern Pacific Ry. Co., 

### 43 Mont. 317, 329, 117 P. 81, discussed this section

as it related tothe admissibility of certain tables of results of tests made on airbrakes on trains of different tonnage. The tables were offered to corroborate the expert's opinion and as independent evidence of the facts shown. The Court said: 

# "** * if the proper preliminary proof 

### ismade, viz., that the book or chart offered isby a person indifferent between the parties litigant, 

### is standard among the profession, trade or occupation towhich it relates, and 

### is accepted and acted upon as accurate, it should be admitted, upon the theory that the matters which it contains are facts

, ,of,general riotariety'and inte?est

# ."
The document here involved is similar to the one involved inLynes and was offered for substantially the same purposes. The foundation required for the admission, that it was prepared prior to litigationby parties indifferent between the parties and that it 

### isaccepted as an authority and relied on as such, is sufficient

assurance of the truthof the matters contained therein and thus excepts it from the requirement that the speaker be available for cross-examination. We note here that the portion of the summary and conclusion read into evidence does not speak to the existence of present harm, only predicts such harm. It goes not to the truth of the issue, but to the knowledge or intent of thebuilders of the project. The District argued the jury disregarded the evidence that the District was not responsible for any seepage past the point of delivery attheheadgates. The evidence of where the seepage came from was a matter for thejury todecide and was decided against the contentions of the District. There was considerable evidence to support thejury'

### s decision. Second, asto the other challenges made to the determination of cause and the valuation--is there substantial credible evidence to support the verdict and judgment? That is the scope of this Courts review, StateHighway ~omrn'n v. Vaughan, 155Mont. 

### 277, 470 P.2d 

### 967. As tocause, both parties presented a number of witnesses, including two highly qualified and extremely convincing expert witnesses who gave conflicting explanations of the cause of the injury. There is substantial credible evidence for thejury's findings of cause. As tovaluation, it is true the amount thejury returned as ~ts verdict is the highest amount testified to and this testimony

was by the landowner. This Court has permitted the landowner to testify as to the value of his land within certain limits. In State Highway Comm'n v. Barnes, 151Mont. 300, 305, 443 P.2d 

### 16, this Court, quoting a prior case, said:"we now restate the rule tobe that an owner, upon prima facieproof of ownership, shallbe qualified to estimate in a reasonable way the value of his property for the use towhich he has been putting it. Such owner 

### isnot qualified by virtue of ownership alone to testify as to 

### itsvalue for other purposes unless he possesses, as any other witness as tovalue, "some peculiar means of forming an intelligent and correctjudgment as to the value of the property inquestion beyond what ispresumed tobe possessed by men generally."

## '" Here, as inBarnes, the landowner testified to the value of the land as it was being used. While the District argues that Rauser's value ..testimony

### is incredible, it should be noted that within the

### 40 acres involved

are allthe buildings of the ranch. He testified the water problems began with the commencement of the project: that his two separate basements were flooded; the septic tank would not function; that land near the home 

### is inundated the year around; that he could not 

### - use his calving area in the winter and a new one had tobe built; that he could not keep corrals clean because of the water; and that he had toget out of the hog business a value to the ranch operation. With that as a background, he went on to testify as tothe value of his ranch before and after the taking. The trialjudge did not abuse his discretion inallowing this testimony. Issue 

### (5). This issue involves attorney fees and consists of two questions. First, does the court have the power to award attorney fees inan inverse condemnation case? Second, were attorney fees properly awarded inthis case? First. Art. 

### XI, Section 29, 1972Montana Constitution provides: "Private property shallnot be taken or damaged for public use without just compensation tothe fullextent of the loss having been firstmade to or paid into court for the owner. In the event of litigation,just compensation shall include necessary expenses of litigation tobe awarded by the court when the private property owner prevails.I IThe statute implementing the last sentence of Art. 11, Section 29, is section 93-9921.1, R.C.M. 1947, which provides: 

### h he condemnor, shallwithin thirty (30) days after an appeal 

### isperfected from the commissioner's award or report, submit to condemnee a written final offer of judgment for the property tobe condemned, together with necessary expenses of condemnee then accrued. "If any time prior to ten (10) days before trial the condemnee serves written notice that the offer is accepted, eitherparty may then filethe offer and notice of acceptance together with proof of service thereof and thereupon judgment shallbe entered. An offernot accepted shallbe deemed withdrawn and evidence thereof 

### isnot admissible atthe trialexcept ina proceeding to determine costs. The fact that an offer ismade but not accepted does not preclude a subsequent offer. Inthe event of litigation, and when the private property owner prevails, by receiving an award inexcess of the final offer of the condemnor, the court shallaward necessary expenses of litigation to the condemnee

# ." For future reference in such controversies, we note here that the 1977 Montana Legislature passed House BillNo. 483, now Chapter 

### 48, 1977 Session Laws. This is an act to define and provide a manner for computing the amount of necessary expenses of litigation required by section 93-9921.1, R.C.M. 1947. While not effective for the instant case, allcases arising afterJuly 1, 1977, the effective date of the act, willcome under this act. In Statev. Olsen, 166 Mont. 139, 147, 531P.2d 1330, the Court found the 1972 Constitution and the statute implementing it required payment of expert witnesses and attorney fees. We note that section 93-9921.1, R.C.M. 1947, does not use the terms "plaintiff" and "defendant" as do most of the prior sections in the eminent domain chapter, Chapter 99, Title 93. InFrustuck v. City of Fairfax, 41Cal.Rptr. 56, attorney fees

were denied in an inverse condemnation case. There the court rested its decision on two factors (1) that the word "defendant" was used in the eminent domain attorney's fee statute indicating that the

### attorneyFs fee statute applied only to the statutoryprocedure, and (2) therewas no constitutional requirement that attorney fees be paid in an eminent domain action in California. However, in a recent case,Holtz v. San FranciscoBay Area Rapid Transit District, 131Cal.Rptr. 646, 552 P.2d 430, 436, footnote the court notes: 

### "It is asserted that since federal lawmakes it clear that litigation costs are not recoverable in an inverse condemnation if a 'tort' is alleged, section 1246.3 must be interpreted so as to prohibit the award of litigation costs in actions alleging damage to realproperty. Aside from the fact that no such limitation is made by section 1246.3 and that, as we conclude above, the loss of lateral supportmay be characterized as a taking of an interest in realproperty, this argument ignores the established principle that recovery in inverse condemnation isbased on the constitutionalprovision requiring just compensation,not on a theory of tort.

(Reardon v. San Francisco, supra, 66Cal. 492, 505, 6 P. 317.) We have consistently rejected the contention that the right to recover in eminent doxhafn .derives from'tortdoetrine,'emphasizing that as a matter ofpolicy the owner of property taken or damagd for public use should not contribute a disproportionate share of the cost of a public undertaking. {Citing cases]" InMontana,precisely the opposite is true. "Condemnor" and

11

### condemneel'are used in the attorney's fee statute in contrast to the rest of the chapterwhich speaks of "defendant1'and "plaintiff"

# . Further, there is a clear constitutional requirement that attorney feesbe paid in condemnation cases where the landownerprevails. Attorney fees are permissible in inverse condemnation cases in Montana. Second. The District alleges no attorney fee is proper in this case because therewas no final offer as required by statute. This same objectionwas discussed in Olsenwhere the Court said: "To adopt such a theory here would contravene the intent of the statute and would violate the constitutionalmandate. Article 11,Section 29, 1972Constitution requires that a landownerbe compensated for necessary expenses of litigation if he prevails. This constitutional directive cannotbe frustratedby inadvertent or intentional violations of statutory procedure." 166Mont. 147.While it 

### isunderstandable the District inthis inverse condemnation action did not wish to follow the statutory condemnation procedure, that may not be used to deny plaintiffs their attorney fees. In the instant case a $30,000 bid forwork that would have cured the problem was rejected asbeing too costly. The amount the project was expected to costwas around $6,000. By inference it seems clear the $100,000 verdict exceeded the "final offer" of the condemnor. Defendant next questions whether such fee may be awarded where

no evidence was taken as required by Crncevich v. Georgetown Recreation Corp., 168Mont. 113, 541 P.2d 56, 59, 32 St.Rep. 963 and First SecurityBank of Bozeman v. Tholkes, Mont *-9 547 P.2d 1328, 33 St. Rep. 

### 341'. InTholkes this Court vacated the judgment on attorney fees and remanded the cause for an evidentiary hearing on attorney fees. Here, since the stateorpolitical subdivisionmust pay the attorney fees, there 

### is even stronger reason to remaidcl the instant case for consideration of the factors set out inCrncevich and Tholkes. Under the 1889 Constitution fees in condemnation cases were percentage contingency fees. In the private agreements the parties protected their own interestsbut where the fee 

### is tobe paid by the statethere isno incentive for the landowner tobargain tokeep the percentage reasonable. Clearly success 

### is an important factor in setting an attorney fee. The "result secured" 

### is among the factors set out inCrncevich and Tholkes, but it 

### isnot the only factor and allmust be considered and weighed toarrive ata reasonable fee. Wewish to make clear that there 

### is absolutely no intent to imply inany way that the fee inthe instant case 

### isunreasonable, but only to require that the

### reasonablenessof the feebe shown by evidence. Often those unfamiliarwith the difficultiesand complexities involved in

an action, especially such a one as the instant inverse condemnation action, see only the lump sum figure for attorney fees and think it unreasonable. 

### By producing evidence as to the amount of time and effort involved, that simplistic judgment should disappear. Issue 

### (6). The sufficiency of the description ofwhat was taken. Itwas clear to the jury,whichhad viewed the land,and the parties what landwas involved,but as to third parties and subsequent takers a legal description of the land including a survey of metes and bounds shouldbe furnished and made a part of the judgment.Judgment is affirmed inpart, and remanded inpart to the trial court for furtherhearings as directed by this opinion.

We Concur:

- --



### Justices.

Mr. Justice Frank I. Haswell: I concur in the result.