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No. 00-809 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

2001 MT 142 

DARL ENGER, C.P. BROOKE, MICHAEL 

BROOKE, and RICHARD BULEY,

Plaintiffs and Appellants,

v.

CITY OF MISSOULA,

Defendant and Respondent.

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula,

The Honorable Ed McLean, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Richard R. Buley, Tipp & Bulley, Missoula, Montana

For Respondent:

Jim Nugen, Missoula City Attorney, Missoula, Montana

Submitted on Briefs: March 22, 2001 

Decided: August 2, 2001 

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Filed:

__________________________________________

Clerk

Justice Terry N. Trieweiler delivered the Opinion of the Court.

¶1 The Plaintiffs filed a complaint in the District Court for the Fourth Judicial District in 

Missoula County requesting a declaratory judgment that the Missoula City Council 

illegally included them in a special improvement district. The City of Missoula filed a 

motion for summary judgment and after a hearing the District Court entered judgment in 

favor of the City. The Plaintiffs now appeal from the order of the District Court. We 

affirm the District Court.

¶2 The following issues are presented on appeal:

1. Were Plaintiffs adequately notified of the City's motion for summary judgment?

2. Did the District Court err when it granted the City's motion for summary 

judgment? 

FACTUAL BACKGROUND

¶3 Missoula City Council Resolution Number 6278 declared the City's intention to create 

Special Improvement District 524 for the purpose of financing and constructing storm 

sewer drainage improvements for south Missoula. The Resolution also created two Special 

Improvement Sub-Districts: the Valley Area Sub-District and the Farviews Sub-District. 

The City determined that the hillside properties within the Farviews Sub-District would 

benefit from the storm sewer drain project and accordingly assessed 23% of the costs of 

the project to those property owners. 

¶4 The Plaintiffs, several real property owners in the Farviews Sub-District, filed a 

complaint in the District Court for the Fourth Judicial District in Missoula County on 

March 16, 2000. The Complaint requested a declaratory judgment that the Missoula City 

Council illegally created a special improvement district and assessed costs for storm sewer 

improvements that did not benefit the Plaintiffs' property.

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¶5 On April 20, 2000, the City of Missoula made a motion entitled "Defendant City of 

Missoula's Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim Upon Which 

Relief Can be Granted or Alternatively Defendant City of Missoula's Rule 12 (b)(6) 

Motion for Summary Judgment." The City contemporaneously submitted a brief in 

support of the motion and attached the public record of the City Council's deliberations. 

¶6 On May 4, 2000, the Plaintiffs filed "Plaintiff's Response Brief." On May 8, 2000, the 

Plaintiffs filed the affidavit of Steven Hall, a real estate appraiser who concluded that the 

project did not benefit the Plaintiffs' properties. 

¶7 On May 12, 2000, the City filed an Answer which included 24 defenses and requested 

that the District Court dismiss the action. On May 18, 2000, the City filed "Defendant City 

of Missoula's Revised Motion for Summary Judgment" and a "Reply Brief in Support of 

Defendant City of Missoula's Motion Requesting Summary Judgment." Attached to the 

brief were the affidavits of the City Engineer, a real estate appraiser, and the Director of 

Public Works.

¶8 On June 23, 2000, the City requested "that oral argument be scheduled pertaining to 

Defendant City of Missoula's motion for summary judgment only." On June 26, 2000, the 

Honorable Ed McLean filed a Notice of Hearing. The Notice set the hearing "regarding 

Defendant City of Missoula's Revised Motion for Summary Judgment..." for August 2, 

2000.

¶9 Although clearly notified that the hearing was to consider the City's motion for 

summary judgment - not its motion to dismiss - Plaintiffs' counsel did not object, at the 

hearing, to being denied the opportunity to respond to the City's motion. Following the 

hearing, the District Court filed its Opinion and Order of Dismissal on September 27, 

2000. The District Court determined that the Plaintiffs failed to present any evidence 

which suggested the presence of fraud or mistake. Furthermore, the District Court 

specifically referred to the affidavits attached as exhibits to the "Reply Brief in Support of 

Defendant City of Missoula's Motion Requesting Summary Judgment" in support of its 

finding the "benefits presented by the City to be reasonably and rationally related to the 

storm sewer drainage project, and that Plaintiffs have failed to prove otherwise under the 

'fraud or mistakes' standard." Consequently, the District Court entered judgment in favor 

of the City on October 10, 2000. 

STANDARD OF REVIEW

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¶10 Our standard of review of appeals from summary judgment is de novo. Motarie v. 

Northern Montana Joint Refuse Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 

156. We apply the same criteria which is applied by the district court pursuant to Rule 56

(c), M.R.Civ.P. Spinler v. Allen, 1999 MT 1960, ¶ 14, 295 Mont. 139, ¶ 14, 983 P.2d 348, 

¶ 14. The moving party must establish both the absence of genuine issues of material fact 

and entitlement to judgment as a matter of law. Hadford v. Credit Bureau of Havre, Inc., 

1998 MT 179, ¶ 14, 289 Mont. 529, ¶ 14, 962 P.2d 1198, ¶ 14. Once the moving party has 

met its burden, the opposing party must present material and substantial evidence, rather 

than mere conclusory or speculative statements, to raise a genuine issue of material fact. 

Hadford, ¶ 14.

DISCUSSION

ISSUE 1

¶11 Were Plaintiffs adequately notified of the City's motion for summary judgment?

¶12 The Plaintiffs contend that the District Court improperly converted a Rule 12(b)(6) 

motion to dismiss to a Rule 56 motion for summary judgment. Based on that premise, the 

Plaintiffs argue that they were denied the opportunity to respond to affidavits submitted by 

the City with its reply brief, that the District Court erred because it did not assume the 

facts stated in the complaint to be true, and that as a result the District Court improperly 

resolved contested issues of fact. 

¶13 Rule 12 (b), M.R.Civ.P., allows a district court to treat Rule 12(b)(6), M.R.Civ.P. 

motions to dismiss as motions for summary judgment pursuant to Rule 56, M.R.Civ.P., 

whenever the district court considers matters outside the pleadings in making its decision. 

This Court has held that when a district court intends to convert a Rule 12(b)(6) motion to 

dismiss to a Rule 56 motion for summary judgment, it should give notice to the parties of 

its intention to consider matters outside the pleadings. Gebhardt v. D.A. Davidson & Co.

(1983), 203 Mont. 384, 390, 661 P.2d 855, 858. The reason for this requirement is to 

afford the party opposing summary judgment or the motion to dismiss an opportunity to 

produce additional facts by affidavit or otherwise which would establish a genuine issue of 

material fact and thereby avoid summary judgment if possible. First Fed. Savings & Loan 

Assoc. of Missoula v. Anderson (1989), 238 Mont. 296, 298, 777 P.2d 1281, 1283. 

¶14 Based on the record, we conclude that the District Court did not improperly convert a 

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Rule 12(b)(6) motion to dismiss to a motion for summary judgment at a point when the 

Plaintiffs had no opportunity to respond. The record indicates that the City made a Rule 12

(b)(6) motion. The Plaintiffs responded and filed an affidavit. The City then filed a revised 

motion for summary judgment, brief in support, and affidavits. The Plaintiffs, for reasons 

not apparent from the record, did not respond to the revised motion. Nor at the time the 

motion was heard did they complain or ask for an opportunity to respond even though they 

were clearly notified that it was the motion for summary judgment that would be heard. 

The record suggests that both sides knew the August 2, 2000, hearing concerned the City's 

motion for summary judgment, not a Rule 12(b)(6) motion to dismiss. 

¶15 Significantly, the Plaintiffs went beyond the pleadings when they filed an affidavit 

with "Plaintiff's Response Brief," but offered no further proof, instead arguing that the 

factual allegations in their complaint must be taken as true for the purposes of a Rule 12(b)

(6) motion to dismiss. There is no indication that the Plaintiffs were denied an opportunity 

to present additional evidence - the Plaintiffs had notice that the District Court would treat 

the motion as a motion for summary judgment, a decision they encouraged by filing an 

affidavit in conjunction with the "Plaintiff's Response Brief." We conclude that Plaintiffs 

had adequate notice of and an opportunity to fully respond to the City's motion for 

summary judgment.

ISSUE 2

¶16 Did the District Court err when it granted the City's motion for summary judgment? 

¶17 Plaintiffs contend that pursuant to § 7-12-4162, MCA, they could not be included in 

the special improvement district created to finance storm sewers absent some benefit to 

them from the proposed drainage system. They contend that whether there was benefit to 

them presented at least an issue of fact and that therefore summary judgment should not 

have been awarded to the City.

¶18 Although the affidavit of the Plaintiffs' expert and the three affidavits submitted by the 

City contradicted each other on the question of benefit, the District Court concluded that 

the Plaintiffs failed to produce evidence of fraud or mistake as required by our holding in

Stevens v. City of Missoula (1983), 205 Mont. 274, 667 P.2d 440. In Stevens, we held that 

a city's determination of benefit and creation of special improvement district boundaries is 

conclusive absent proof of fraud or mistake which preclude the exercise of sound 

judgment. Stevens, 205 Mont. at 280, 667 P.2d at 444. Because the Plaintiffs did not 

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produce any evidence of fraud or mistake by the City, the District Court held that they did 

not satisfy the threshold requirement of Stevens and therefore could not prevail, even if the 

facts as articulated in the complaint and affidavit were deemed to be true.

¶19 Section 7-12-4162(1)(a), MCA, provides that assessments for the costs of 

improvements shall be made only against property which is directly benefitted by the 

improvements. However, the District Court correctly interpreted and applied our decision 

in Stevens and our own review of the record confirms that the Plaintiffs presented no 

evidence to suggest that the City's finding of benefit was based on fraud or mistake as 

required by Stevens. Therefore, we conclude that the District Court did not err when it 

granted summary judgment to the City of Missoula. Accordingly, the judgment of the 

District Court is affirmed. 

/ S/ TERRY N. TRIEWEILER

We Concur:

/S/ PATRICIA COTTER

/S/ JIM REGNIER

/S/ JAMES C. NELSON

/S/ W. WILLIAM LEAPHART

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