No. 92-153 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1993 

ROBERT J. SCHELLIN, ELDON GILMORE, 

EUGENE MONSON, and LAWRENCE SIEMENS, . .. . .. . 

Petitioners and Respondents, 

-vNORTH CHINOOK IRRIGATION ASSOCIATION, 

a corporation registered in Montana, 

Respondent and Appellant. CL:I,RK ,,:.rn.rE r)F SUP.8-. o- ';"":: :'"OR"+ - 8. *vroiyrfii~'\ 

APPEAL FROM: District Court of the Seventeenth Judicial District, 

In and for the County of Blaine, 

The Honorable Leonard Langen, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Thomas J. Sheehy, Big Sandy, Montana; Russ McElyea, 

Moore, OfConnell, Refling & Manos, Bozeman, Montana 

For Respondent: 

Sarah Arnott Ozment, Livingston, Montana 

Filed: 

Submitted on Briefs: December 10, 1992 

Decided: March 10, 1993 

dlerk 
Justice R. C. McDonough delivered the Opinion of the Court. 

The North Chinook Irrigation Association appeals from an order 

of the District Court forthe Seventeenth Judicial District, Blaine 

County, concerning the use of water from Lodge Creek, north of 

Chinook, Montana. We vacate the District Court's order and remand 

for further proceedings consistent with this opinion. 

We conclude that the District Judge should have recused 

himself after participating in negotiations between the parties. 

Because we vacate the court's order on that basis, we do not 

consider the other issues raised on appeal. 

North Chinook Irrigation Association is a corporation held by 

farmers and ranchers who use water from Lodge Creek, in northcentral Montana. The Association maintains a dam across the creek 

approximately twenty-six miles north of Chinook, Montana. Headgates above the dam direct water down a canal to the Association's 

off-stream reservoir about six miles to the east. 

Petitioners Robert J. Schellin, Eldon Gilmore, Eugene Monson, 

and Lawrence Siemens are farmers and ranchers who are not 

Association members and whose property lies along Lodge Creek at 

and downstream from the Association's dam. They brought this 

action in 1987, seeking an injunction preventing the Association 

from continuing to operate its dam and canal. They also sought 

transfer of this controversy to the Water Court pursuant to 5 85-2- 

216, MCA, so that the parties' water rights could be adjudicated 

and a water commissioner could be appointed to administer the 

resulting decree. 

2 
The case was transferred from the District Court to the Water 

court. In 1990, the Water Court transferred it back to District 

Court "for interim settlement ofthe water distribution controversy 

until such time as the Montana Water Court's general adjudication 

is undertaken for the waters of Lodge Creek, a tributary of the 

Milk River Basin (40J)." The Water Court ruled that under 5 85-2- 

406, MCA, the District Court is the proper forum for this matter 

because it is a water distribution controversy. This Court denied 

the petitioners' request for supervisory control on that ruling. 

Just before a scheduled October 10, 1991 District Court 

hearing on the petitioners' motion for a preliminary injunction, 

the parties' attorneys and the District Judge inspected the 

Association's dam and canal. At the court's suggestion, settlement 

meetings between the parties were commenced that evening. As the 

court pointed out, any decision it would reach would only be 

temporary, until the Water Court determines water rights. 

After negotiations continued for most of the next day, the 

court announced, over objections by the Association, that a 

settlement had been reached. The court caused a partial record to 

be made of the settlement discussions. Working from its 

understanding of the settlement discussions and from the 

transcript, on March 13, 1992, the court issued a final order 

together with a memorandum opinion and findings of fact which 

purported to memorialize the agreement reached by the parties. The 

Association appeals. 
Should the District Judge have recused himself after 

participating in negotiations between the parties? 

In Shields v. Thunem (l986), 220 Mont. 449, 452, 716 P.2d 217, 

219, this Court concluded that 

where a judge is to be the trier of fact, and he 

participates in pre-trial settlement negotiations which 

subsequently fail, he should, upon request, disqualify 

himself from sitting as the trial judge. 

In reaching that conclusion, this Court cited with approval cases 

from several other jurisdictions. As discussed in the quotations 

from those cases, the aim is to eliminate any impression of impropriety or bias on the part of the trial judge resulting from participation in pretrial negotiations. Shields, 716 P.2d at 218-19. 

The petitioners attempt to minimize the extent of the District 

Judge's participation in the settlement negotiations in this case. 

They state that he was not demanding in his suggestion that the 

parties attempt settlement, that he did not actively participate in 

or control the direction of negotiations between the parties, and 

that he did not order counsel to refrain from advising their 

clients during the negotiation process. 

This Court's review of the record, however, leaves us with the 

firm impression that the District Judge was a participant in the 

settlement negotiations. He "really strongly recommend[ed]" that 

the parties "get this case settled." He offered to give advice if 

impasses were reached in negotiations. He made suggestions 

concerning use of a headgate, employment of a contractor to do dirt 

work on a ditch, and sharing of the cost of the transcript. He 

suggested a clause in the settlement agreement limiting its purpose 
and dictated settlement terms under which the Association could 

spray on petitioner Schellin's land. Finally, he took it upon 

himself to reduce the claimed settlement agreement to writing. 

The settlement discussions between the parties occurred on 

October 10 and 11, 1991. No written agreement was immediately 

composed. On October 16, 1991, the Association moved that the 

District Judge be disqualified for cause. It also moved that the 

temporary restraining order be continued and that its application 

for a preliminary injunction be set for hearing. The court issued 

an order denying the motion for disqualification. Six months 

later, the court entered its final order and memorandum opinion 

memorializing the claimed settlement. 

The petitioners reason that Shields does not apply because 

settlement negotiations did not fail in this case. We do not 

agree. When the Association made its October 16, 1991 motions, it 

was clear there was a serious question about the success of the 

pre-trial settlement negotiations in which the court had 

participated. We approve of the judge's attempts to mediate and to 

have the parties reach an interim settlement of a complex 

controversy. We hold, however, that pursuant to our opinion in 

Shields, the Association's objections and the October 16, 1991 

motions required the District Judge to disqualify himself. 

We vacate the District Court's final order and memorandum 

opinion and findings of fact, and remand this case for further 

proceedings before a new district judge to determine whether the 
agreement obtained between the parties is binding, and for such 

other proceedings that may come before the court in this cause. 

We Concur: 

i Chief Justi