Court Opinion

ID: 880045
Source: CourtListenerOpinion
Date Created: 2013-06-04 23:56:14.016041+00
Date Added: 2024-06-11T12:18:22.203665
License: Public Domain

No. 87-255

                IN THE SUPREME COURT OF THE STATE OF MONTANA

JACK E. GALT, LOUISE R. GALT, PHIL
ROSTAD, ROBERT E. SAUNDERS, CLARENCE
EDWARD (TED) LUCAS, JAMES BOTTOMLY,
J. HARRISON SAUNDERS, JAKE FRANK,
FRANKLIN GROSFIELD, and LOWELL E.
HILDRETH,
              Plaintiffs and Respondents,
       -vs-

STATE OF MONTANA, acting by and through
THE DEPARTMENT OF FISH, WILDLIFE and PARKS,
                 Defendant and

APPEAL FROM:     District Court of the First Judicial District,
                 In and for the County of Lewis & Clark,
                 The Honorable Henry Loble, Judge presiding.
COUNSEL OF RECORD:
         For Appellant:

                 Poore, Roth & Robinson; Urban L. Roth argued, Butte,
                 Montana
                 Bob Lane, Dept. of Fish, Wildlife & Parks, Helena,
                 Montana
         For Respondent :
                Harrison, Loendorf & Poston; Philip W. Strope argued,
                Helena, Montana
         For An~icusCuriae:
                Hon. Mike Greely, Attorney General. He1 ?am-Montana
                Joe Roberts, Asst. Atty. General, Helena
                                  Submitted: November 12, 1987
                                      Decided:   February 11, 1988

Filed:    -
          FEB   11 t8'
                    98

                                    Clerk
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.

       Appellant/defendant State of Montana        (the State)
appeals a District Court award of $21,080 in attorneys' fees
made to respondent/plaintiffs Galt et al. (Galt)      .     Galt
brought this action pursuant to the Uniform Declaratory
Judgment Act, 5 27-8-101 through S; 27-8-313, MCA, and sought
an order declaring House Bill 265, the "Stream Access Bill, "
S; 23-2-301 et seq., MCA (1985), unconstitutional as a taking
of private property without just compensation in violation of
the Fifth and Fourteenth Amendments to the United States
Constitution     and   Article   11,   S; 29 of   the   Montana
Constitution. The District Court granted summary judgment to
the State and Galt appealed.
       This Court, in Galt v. State Department of Fish,
Wildlife, and Parks (Mont. 1987), 731 P.2d 912, 44 St.Rep.
103, partially reversed the District Court and found
S; 23-2-302 (2)(d), (e), (f), and portions of 5 23-2-311 (3)(e),
MCA (1985), unconstitutional. This Court entered declaratory
judgment in Galt's favor.
       On February 17, 1987, Galt filed a "Memorandum of
Costs, Disbursements and Attorneys' Fees" in the ~istrict
Court.    The State objected to Galt's bill of costs and
attorneyst fees and moved that the same be taxed by the
District Court.     The District Court heard the motion orally
and ordered that the State pay plaintiffs' attorneyst fees
and costs pursuant to Mont. Const. Art. 11, S 29 which
provides the following:
           Eminent domain.   Private property shall
           not be taken for public use without just
           compensation to the full extent of the
           loss having first been made to or paid
           into the court for the owner.     In the
                                             - -
           - - of litigation, just compensation
           event
           shall include necessary expenses of
           litisation to be awarded bv the court
           -- added.)
           when the private property owner prevails.
           (Emphasis
      We affirm with instructions.
      The District Court reasoned that the unconstitutional
provisions   "[ilmposed  easements   for public    use   upon
Plaintiffs' private property without any compensation" and
found that plaintiffs were entitled to attorneys' fees and
costs because they prevailed in this action when the Supreme
Court ruled in their favor. The State of Montana appeals the
District Court award of attorneys' fees and raises the
following issues:
      (1) Whether Article 11, 5 29 of the 1972 Montana
Constitution applies to declaratory judgment actions brought
solely to challenge the constitutionality of a legislative
enactment?
      (2) Did the District Court err in concluding that
private property was taken or damaged for public use?
      The District Court's award of attorneys' fees will not
be reversed absent a clear showing of an abuse of discretion.
Simkins-Hallin Lumber Co. v. Simonson (Mont. 19841, 692 P.2d
424, 427, 41 St.Rep. 2305, 2309.    As a preliminary matter,
both parties recognize that attorneys' fees are not
recoverable absent an express agreement between the parties
or statutory authority. Thorton v. Commissioner of Dept. of
Labor and Industry (Mont. 1980), 621 P.2d 1062, 1066, 37
St.Rep.   2026,   2030.   It   is   undisputed   that   no   express
agreement allowing attorneys' fees exists between the
parties.   Galt contends that Mont. Const. Art. 11, S 29
specifically authorizes an award of attorneys' fees in this
case.
      The State of Montana does not question the amount of
attorneys' fees awarded to Galt.    The State does, however,
argue in its first issue that Mont. Const. Art. 11, 5 29
applies strictly to condemnation proceedings or actions for
inverse condemnation.   A private property owner, the State
contends, is entitled to "just compensation" only when
private property is actually "taken or damaged" for public
use.   The District Court found that the State's "argument
places form over substance" and awarded attorneys' fees and
costs to Galt under Mont. Const. Art. 11, 5 29.      We agree
with the District Court's analysis and conclusions concerning
the applicability of Mont. Const. Art. 11, 5 29 to the
particular circumstances of this case.
      The State claims that the plain meaning of the statute
requires either a condemnation proceeding or an action for
inverse condemnation and that a declaratory judgment action
cannot qualify Galt for an award of attorneys' fees.
Although we must, when possible, determine the intent of the
legislature from the plain meaning of the words used in the
statute, our reading of the statute does not coincide with
the State's interpretation.   State v. Cardwell (198O), 187
Mont. 370, 373, 609 P.2d 1230, 1232. The statute does not
define what legal procedures must be followed to qualify a
particular legal action as an eminent domain proceeding.
      We recognize that the legislature has provided
statutory procedures for the State's exercise of its eminent
domain rights.    Section 70-30-101, et seq., MCA.     These
statutes specifically authorize an award of the necessary
expenses of litigation to the private property owner who
"prevails by receiving an award in excess of the [State's]
final offer  ..  . " Section 70-30-305 (2), MCA. Statutory
condemnation proceedings, however, are not the exclusive
method by which the State may be taken to task by a private
property owner for exercising its right of eminent domain.
The State has, in some circumstances, taken private property
without an actual physical appropriation of land. Knight v.
City of Billings (1982), 197 Mont. 165, 642 P.2d 141; Rauser
v. Toston Irr. Dist. (1977), 172 Mont. 530, 565 P.2d 632.
The    private   property owner   often  responds in     such
circumstances by filing an action for inverse condemnation.
Rauser, 565 P.2d 632.
        This Court held in Rauser, supra, that the private
property owner who prevails in an action for inverse
condemnation may recover attorneys' fees pursuant to Mont.
Const. Art. 11, 5 29.     Rauser, 565 P.2d at 641.     In so
holding, this Court reasoned that the State's failure to
follow the statutory condemnation proceedings "may not be
used to deny [the private property owners] their attorney
fees. "     Rauser, 565 P.2d at 641.       (Additions ours.)
Similarly, Galt's   election   to   settle   this   matter   in   a
declaratory judgment action cannot be used by the State to
deny an award of attorneys' fees in this case.
      The Fifth Amendment of the United States Constitution
has also been construed by the United States Supreme Court to
allow compensation to the private property owner in legal
proceedings other than traditional condemnation actions.
Jacobs v. United States (19331, 290 U.S. 13, 54 S.Ct. 26, 78
L.Ed.   142.   In recognizing inverse condemnation actions,
Jacobs noted the following with respect to the compensation
requirements of the Fifth Amendment:
           [The right to recover just compensation
           for property taken by the United States]
           was guaranteed by the Constitution. The
           fact that condemnation proceedings were
           not instituted and that the right was
           asserted in suits by the owners did not
           change the essential nature of the claim.
           The form of the remedy did not qualify
           the right.     It rested upon the Fifth
           Amendment. Statutory recognition was not
           necessary.    A promise to pay was not
           necessary.   Such a promise was implied
           because of the duty imposed by the
           Amendment.   The suits were founded upon
           the Constitution of the United States.
           (Additions ours.)
Jacobs, 290 U.S. at 16, 54 S.Ct. at 27.          We find the
reasoning in Jacobs to be equally applicable to the instant
case. The right to recover just compensation is guaranteed
in Montana by both the Fifth Amendment of the United States
Constitution   and   Article   11,   §29    of  the   Montana
Constitution.    The form of the action, in this case a
declaratory judgment, does not qualify the right to
compensation. The right to just compensation rests upon the
constitutional mandates.      Just compensation in Montana
includes attorneys' fees. Mont. Const. Art. 11, § 29.
      The State also claims that the legislative intent of
the eminent domain statute does not include situations as
presented by this appeal.    In our review of the legislative
history of Article 11, § 29, we will construe the statute to
give effect to the legislature's intent.     Section 1-2-102,
MCA; Caldwell v. Great Western Sugar Co. (Mont. 1987), 746
P.2d 627, 628, 44 St.Rep. 2123, 2124.      The object of the
statute must be given foremost consideration and our
interpretation of the statute must give effect to that
object.   Section 1-2-103, MCA; Dover Ranch v. Yellowstone
County (1980), 187 Mont. 276, 284, 609 P.2d 711, 715.
      This Court reviewed the legislative history of Article
11, S 29, in Callant v. Federal Land Bank of Spokane (1979),
181 Mont. 400, 593 P.2d 1036, and noted the following:
           [I]n the case of the state taking private
           property there is an imbalance between
           the resources available to the parties
           which should be redressed by requiring
           the state to bear full financial burden
           of the individual whose property is being
           condemned . . . Excerpts from the Montana
           Constitutional Convention Vol. VII, pages
           5631-5633, indicate that this imbalance
           underlay the adoption of Article 11,
           Section 29, 1972 Montana Constitution.
Callant, 593 P.2d at 1039. In State Department of Highways
v. Olsen (1975), 166 Mont. 139, 531 P.2d 1330, this Court
described the legislature's intent as follows:
           The proceedings at the Constitutional
           Convention make it abundantly clear that
           it intended Article 11, Section 29 to
           make the landowner whole in eminent
           domain proceedings to the extent that the
           amount of the judgment for the taking of
           his land and improvements would be a "net
           recovery" with expenses of litigation
           assessed against the State, where the
           landowner prevailed.
Olsen, 531 P.2d at 1335.
      We have again reviewed the legislative history      of
Article 11, § 29, and are convinced that an award         of
attorneys' fees in this case is consistent with the intent of
the constitutional framers. The 1972 Constitutional Bill of
Rights Committee comments on Article 11, S 29, include the
following:
          Delegate [George] James : [ T I he committee
          unanimously approved substantive changes
          in the eminent domain section.           The
          thrust of the committee effort was to
          assure the full and just compensation
          -- that full and just compensation be
          made in all eminent domain actions.
          Without it, some of the costs of eminent
          domain action fall where they do not
          belong -- on the person whose property is
          being condemned.      In order to give
          substance to the citizen's effort to
          challenge the compensation figure of the
          condemnor, the last sentence of this
          provision was added. Those testifying in
           opposition to the committee's original
           eminent domain proposal agreed that this
           sentence which awards necessary expenses
           of litigation to the private property
           owner when he is the prevailing party, is
           just.      The    committee   intends, by
           "necessary expenses of litigation", all
           costs including appraiser's fee, attorney
           fees and court costs.      It is felt that
           when -- this stipulation will produce a
           climate in which the condemnor's offer
           for compensation will be more -- will
           more adequately reflect the compensation
           to which the property owner is entitled.
           The property owner will have a chance to
           collect expenses he incurs in challenging
           the condemnor's action. In addition, it
           will redress the imbalance between the
           vast resources brought to bear by the
           state   and    those   available   to   the
           individual property owner in contested
           cases.    The committee recommends this
           section     to     the     [Constitutional]
           Convention    as    insurance    that   the
           compensation to the private property
           owner will, in fact, be just. Delegate
           Proposal Number      75 was    amended   to
           accomplish this provision.         I think
           you're all familiar with the term "the
           public good".    Sometimes this is rather
           elusive and is used to condemn property
           and a figure which may be unjust to the
           property owner is not contested because
           of the cost of litigation.             This
           [provision], I believe, will correct this
           situation. (Additions ours.)
Verbatim transcript, Montana Constitutional Convention, March
9, 1972, Vol. VI at 1825-1826.      If we adopt the State's
argument in this case, the costs of this litigation would
undoubtedly fall where they do not belong -- on private
property owners who are forced to    bring a legal action in
defense of their property rights.   We believe that an award
of attorneys' fees to the private    property owners in this
case reflects the compensation to   which they are entitled.
Such an award will also serve to redress the imbalance of
resources between the State and the private property owners.
      It   is   obvious   that   the   instant   case   is   not   a
traditional eminent domain proceeding in the form of a
condemnation proceeding or inverse condemnation action.    In
bringing this action, Galt sought a declaratory judgment that
certain portions of the Stream Access Bill, S § 23-2-301, et
seq., MCA, were unconstitutional as a taking of private
property without just compensation.       Eminent domain is
defined as the State's right I' [tlo take private property for
public use."     Section 70-30-101, MCA.          It was the
legislature's enactment of statutes which resulted in an
unconstitutional taking of private property without just
compensation that characterizes this case as an eminent
domain proceeding.  As previously noted, the right to just
compensation does not depend on the form of the action.
Jacobs, supra. Accordingly, Article 11, 5 29 is applicable
to the specific circumstances of this case.
      In its second issue, the State argues that, even if
Article 11, 5 29 applies, there was no actual "taking" for
which Galt can be compensated. The District Court correctly
identified the prerequisites of an award of attorneys' fees
under Article 11, 5 29 as being (1) a taking or damaging of
private property for public use, (2) litigation, and (3) the
private property owner prevailing in the litigation. State
v. Standley Brothers (Mont. 1985), 693 P.2d 60, 64, 42
St.Rep. 563, 568; Bozeman parking Com'n. v. First Trust Co.
(Mont. 1980), 619 P.2d 168, 171, 37 St.Rep. 1610, 1614. The
State agrees that these are the statutory prerequisites and
concedes that the second and third prerequisites have been
met.
      The State asserts that the District Court erred in
concluding that private property had been taken or damaged
for public use.     The District Court relied on language in
Galt, supra, to conclude that private property was taken for
a public use easement. The State contends that Galt did not
consider or determine whether private property was taken or
damaged for public use and that Galt simply determined that
portions of the Stream Access Bill were invalid.
      The State overlooks the fact that portions of the
stream Access Bill were held to be unconstitutional for the
very reason that those statutes served to take private
property without just compensation. Galt, 731 P.2d at 913.
The Galt decision specifically "reaffirms well established
constitutional principles protecting    [private] property
interests from confiscation [by the State.]"  Galt at 916.
(Additions ours.)   Because of our decision in Galt, the State
is collaterally estopped from now raising the "taking" issue.
Accordingly, the District Court was correct in concluding
that all three of the statutory prerequisites for an award of
attorneys' fees were met in this case.
      We hold that Article 11, § 29, specifically authorizes
an award of attorneys' fees to the private property owners
under the particular circumstances of this case.     We limit
this holding to the facts of this case and to the recognition
that just compensation, including necessary expenses of
litigation, is constitutionally required where the State
takes private property for public use.
       Galt requests an award of expenses of this appeal. An
award to Galt of expenses on appeal, including attorneys'
fees, is proper as "necessary expenses of litigation" under
Article 11, § 29 of the Montana Constitution. In addition,
5 25-10-104(2), MCA, provides that costs of appeal must be
awarded to the successful party.         See also Rule 33,
M.R.App.P.   This Court requires that the District Court hold
an evidentiary hearing to determine the amount of reasonable
attorneys'        f e e s and c o s t s .      S t a t e v.   Helehan     (Mont.    1980),
615 P.2d        925,    37   St.Rep.        1516.       Accordingly,      t h i s case is
r e f e r r e d t o t h e District Court with i n s t r u c t i o n s t o c a l c u l a t e
and award r e a s o n a b l e a t t o r n e y s ' f e e s and c o s t o f t h i s a p p e a l
t o Galt.
                                                                           , "
                                                                            -
      Affirmed w i t h i n s t r u c t i o n s t o c a l c u l a t e +d     award
a t t o r n e y s ' f e e s and c o s t s o f t h i s

                                                        !Justice,   ',
                                                                                                I
                                                               1
W e concur:             A
d4.T
   i;kf J u s t i c e

Justices
Mr. Justice John C. Sheehy, dissenting:

     I dissent, though in so doing I realize that the
District Court judge, in granting attorney fees, found his
hands tied by the improvident decision of the majority in
Jack E. Galt v. State of Montana and the Department of Fish,
                                        . ,
Wildlife and Parks (1987), - Mont - 731 P.2d 912, 44
St.Rep. 103.
     That majority decision took away from the people of this
State and from the legislature the right to the full use of
riverbeds up to the high water mark, a right before that
decision recognized by state and federal statutes and courts.
It is classic irony that the people now have to pay attorney
fees to the parties that diminished their rights to use the
riverbeds.    Such are the consequences of departure from
settled case law.

                                    c J P h n -   &,%_
                                                  Justice

Mr. Justice William E. Hunt, Sr.:

     I concur in the dissent of Mr. Justice Sheehy.