No. 12747
I N T E SUPREME C U T O THE STATE O M N A A
H O R F F OTN
M A H R COUNTY N W A CREEK
EGE E LN
W T R DISTRICT, I n c o r p o r a t e d
AE
under t h e Laws of t h e S t a t e o f
Montana, and M A H R COUNTY, a
EGE
P o l i t i c a l S u b d i v i s i o n of t h e
S t a t e of Montana,
P l a i n t i f f s and Respondents,
LESTER J. W L E AND L N MAE
ATR EA
WALTER, husband and w i f e , and
t h e UNITED STATES O AMERICA,
F
Defendants and Appellants.
Appeal from: D i s t r i c t Court of t h e F o u r t e e n t h J u d i c i a l D i s t r i c t ,
Honorable Nat A l l e n , Judge p r e s i d i n g .
Counsel of Record:
For A p p e l l a n t s :
B o l i n g e r and Wellcome, Bozeman, Montana
H. A. B o l i n g e r argued, Bozeman, Montana
For Respondents:
John V. P o t t e r , Jr. argued, White Sulphur S p r i n g s ,
Montana
Submitted: November 4, 1975
Decided: 'Mkk - w
5 1376
ii
Filed :
M r . J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e C o u r t .
T h i s i s a n a p p e a l from judgment e n t e r e d on a j u r y v e r -
d i c t i n a condemnation a c t i o n t r i e d b e f o r e t h e d i s t r i c t c o u r t ,
Meagher County. Defendants L e s t e r J . W a l t e r and I n a Mae W a l t e r ,
were owners o f r a n c h l a n d s condemned by p l a i n t i f f s i n o r d e r t o
c o n s t r u c t a multi-purpose r e s e r v o i r .
Walters' l a n d was condemned f o r c o n s t r u c t i o n by t h e
Meagher County Newlan Creek Water D i s t r i c t f o r a dam on Newlan
Creek. I n c i d e n t t o c o n s t r u c t i o n of t h e dam, it w a s n e c e s s a r y
t o a c q u i r e a d d i t i o n a l l a n d f o r t h e p o o l a r e a above t h e dam and
t h e o u t f l o w s t r u c t u r e s below t h e dam. The dam i t s e l f , t h e o u t -
f l o w area, and much o f t h e p o o l a r e a s a r e l o c a t e d on what w a s
Walters' l a n d .
The work p l a n f o r t h e dam c a l l e d f o r t h e u s e of t h r e e
s e p a r a t e p a r c e l s o f l a n d i n S e c t i o n s Eleven (11) and F o u r t e e n
( 1 4 ) , Township Ten ( 1 0 ) North, Range S i x ( 6 ) E a s t , M.P.M. Tract
One w a s s u b j e c t t o a f e e t a k i n g c o n s i s t i n g of 283.597 acres.
T r a c t Two w a s s u b j e c t t o a temporary easement g i v i n g t h e Water
D i s t r i c t t h e r i g h t t o e n t e r and remove f i l l materials f o r a p e r i o d
o f f i v e y e a r s on 96.682 acres. T r a c t T h r e e was s u b j e c t t o a
permanent easement on 1 5 . 1 a c r e s f o r c o n s t r u c t i o n , m a i n t e n a n c e ,
and u s e of a d i s c h a r g e c a n a l . The l a n d s u b j e c t t o t h e f e e t a k i n g
and t h e permanent easement c o n s i s t s o f a p p r o x i m a t e l y 70 a c r e s
of b o t t o m b n d a l o n g Newlan Creek and 230 a c r e s immediately a d j o i n -
ing the bottombnd. I n a d d i t i o n , W a l t e r s ' home was t a k e n .
P r i o r t o t r i a l , a commissioners' h e a r i n g w a s h e l d . The
commissioners d e t e r m i n e d j u s t compensation t o be i n t h e amount
of $160,079.65. T h i s award w a s a p p e a l e d by t h e Water D i s t r i c t
t h r o u g h t h e f i l i n g o f a c o m p l a i n t i n condemnation on J a n u a r y 30,
1974. The Landowners a p p e a r e d by motion t o d i s m i s s and answer,
o b j e c t i n g t o t h e Water D i s t r i c t ' s power o f condemnation. The
m a t t e r proceeded t o h e a r i n g b e f o r e t h e d i s t r i c t c o u r t on
F e b r u a r y 21, 1974. On March 29, 1974, t h e d i s t r i c t c o u r t
e n t e r e d a "PRELIMINARY ORDER O CONDEMNATION" wherein it
F
o r d e r e d t h a t t h e l a n d and i n t e r e s t s i n l a n d be t a k e n by t h e
Water D i s t r i c t upon making j u s c compensation a s p r o v i d e d by
law. O A p r i l 1 6 , 1974, Landowners p e t i t i o n e d t h i s C o u r t e x
n
p a r t e f o r e x t r a o r d i n a r y r e l i e f i n t h e form of a w r i t o f pro-
hibition. An o r d e r t o show c a u s e w a s i s s u e d , a n a d v e r s a r y
h e a r i n g f o l l o w e d w i t h s u b s e q u e n t d e n i a l of t h e r e l i e f s o u g h t
by t h i s C o u r t ' s o r d e r ( S t a t e e x r e l . Walter v . D i s t r i c t C o u r t ,
164 Mont. 539, 521 P.2d 1 9 3 ) . P r i o r t o t r i a l , an o f f e r w a s
made by t h e Water D i s t r i c t i n t h e amount o f $81,010. The o f f e r
w a s n o t a c c e p t e d and t h e m a t t e r proceeded t o t r i a l . The j u r y
awarded :
(1) T o t a l f a i r market v a l u e of p r o p e r t y s o u g h t t o be
a p p r o p r i a t e d ( i n c l u d i n g f e e t a k i n g , permanent and
temporary easement) .....................$ 60,268
(2) Depreciation accruing t o
remainder ...............................$ 9,000
( 3 ) Amount r e m a i n d e r w i l l be
benefitted ..............................$ None.
Judgment was e n t e r e d on t h e v e r d i c t . Walters f i l e d a
motion f o r new t r i a l , which w a s d e n i e d . I t i s from t h e judgment
and d e n i a l of a new t r i a l t h a t W a l t e r s a p p e a l .
Appellants p r e s e n t s e v e r a l i s s u e s f o r review b u t w e
d i s c u s s o n l y two.
First: Was t h e i s s u e o f t h e Newland Creek Water D i s -
t r i c t ' s power of condemnation res j u d i c a t a by v i r t u e o f t h i s
C o u r t ' s o r d e r of A p r i l 29, 1974? ( S t a t e ex r e l . Walter v . D i s -
t r i c t C o u r t , 164 Mont. 539, 521 P.2d 193.)
Second: Did a p p e l l a n t s r e c e i v e j u s t compensation f o r
t h e p u b l i c t a k i n g of t h e i r l a n d a s r e q u i r e d by A r t i c l e 11, Sec-
t i o n 29, 1972 Montana C o n s t i t u t i o n ?
First. The d o c t r i n e o f res j u d i c a t a s t a t e s t h a t a f i n a l
judgment on t h e m e r i t s by a c o u r t o f competent j u r i s d i c t i o n
i s c o n c l u s i v e a s t o c a u s e s of a c t i o n o r i s s u e s t h e r e b y l i t i g a t e d ,
a s t o t h e p a r t i e s and t h e i r p r i v i e s , i n a l l o t h e r a c t i o n s i n
t h e same o r any o t h e r j u d i c i a l t r i b u n a l o f c o n c u r r e n t j u r i s -
diction. 46 Am J u r 2d, Judgments, 5 394. Appellants argue t h a t
t h i s C o u r t ' s o r d e r o f A p r i l 29, 1974, d e n y i n g t h e e x t r a o r d i n a r y
r e l i e f s o u g h t was n o t on t h e m e r i t s and t h e r e f o r e was n o t res
judicata. With t h i s c o n t e n t i o n , w e c a n n o t a g r e e . The o r d e r i n
c a u s e #12742, S t a t e ex r e l . Walter v . D i s t r i c t C o u r t , 164 Mont.
539, 540, 521 P.2d 1 9 3 , s t a t e s :
"On t h e r e t u r n day b r i e f s w e r e f i l e d , a motion
t o quash by r e s p o n d e n t s , c o u n s e l w e r e h e a r d i n
o r a l argument and t h e m a t t e r t a k e n under a d v i s e -
ment. The C o u r t now b e i n g a d v i s e d , and g i v i n g
consideration t o the petition, exhibits, briefs,
and o r a l a r g u m e n t s , it i s o r d e r e d t h a t t h e r e l i e f
s o u g h t be d e n i e d and t h e p r o c e e d i n g i s o r d e r e d
dismissed. "
I t w a s d u r i n g t h e show c a u s e h e a r i n g on a p p e l l a n t s ' p e t i t i o n
f o r a w r i t o f p r o h i b i t i o n t h a t t h e Water D i s t r i c t ' s power t o con-
demn w a s c h a l l e n g e d by a p p e l l a n t s . This Court denied t h e r e l i e f
s o u g h t b e c a u s e b r i e f s and o r a l argument d e m o n s t r a t e d t h e r e w a s
no m e r i t t o a p p e l l a n t s ' c o n t e n t i o n under Montana l a w . It is
established t h a t a r i g h t , question, o r f a c t d i s t i n c t l y put i n
i s s u e , a s was done h e r e , and d i r e c t l y d e t e r m i n e d by a c o u r t o f
competent j u r i s d i c t i o n c a n n o t be d i s p u t e d i n s u b s e q u e n t a c t i o n s
between t h e same p a r t i e s o r t h e i r p r i v i e s . Montana E a s t e r n P i p e
L i n e Company v. S h e l l O i l Company, (D.C. Mont.) 216 F.Supp. 214.
Where, a s h e r e , t h e r e w a s no w r i t t e n o p i n i o n e x p l a i n i n g t h e b a s i s
f o r t h e C o u r t ' s o r d e r b u t t h e d e n i a l was i n t e n d e d t o be on t h e
m e r i t s , t h e d e n i a l of r e l i e f s o u g h t i s r e s j u d i c a t a . McDonough
v . G a r r i s o n , 68 Cal.App.2d 318, 156 P.2d 983. Finally, t h i s Court
i n B u t l e r v. Brownlee and D i s t . C t . , 152 Mont. 453, 457, 451
P.2d 836, s t a t e d :
"A judgment n o t a p p e a l e d from i s c o n c l u s i v e between
the parties as to all issues raised by pleadings
actually litigated and adjudged as shown on the
face of the judgment and reasonably determined
in order to reach the conclusion announced."
(Emphasis supplied.)
Second. Appellants contend they were denied just com-
pensation for the public condemnation of their land. We agree.
Just compensation for a public taking of private land
is to be computed as: fair market value of land taken plus
(value of remainder before taking - value of remainder after
taking?),Section 93-9912, R.C.M. 1947; State Highway Commission
v. Emery, 156 Mont. 507, 481 P.2d 686; Montana State Highway
Comm'n v. Jacobs, 150 Mont. 322, 435 P.2d 274. Upon review of
the entire record in this case, this Court finds that neither
the award of severance damages to the remainder nor the compen-
sation for property taken were supported by substantial evidence.
Considering first the severance damages to that part of
appellants' land not taken, it is obvious that the condemnation
resulted in excising the very heart out of their ranch. A re-
view of the trial transcript demonstrates this to be the case.
The fee taking will result in the permanent loss of 70 acres
of appellants' bottomhnd leaving only 8 acres for immediate
use and 15 acres in the temporary easement area which are
not usable until after reclamation five years hence. Because
this bottom Bnd provides hay, pasture, and wintering grounds for
appellants' cattle, it is important to the operation of the ranch.
In addition, appellant Lester Walter testified that two of his
best stodcwater springs were within the fee taking area. Other
springs are still available to appellants, but several of these
either dry up, have poor access, or are situated on land owned
by someone else.
This uncontradicted testimony becomes extremely important
when the highest and best use of appellants' land is considered.
By the Water District appraiser's own admission, such highest
and best use of the land is as a small stock ranch. That the
condemnation action would be detrimental to such an operation
is easily perceived. Before the taking, appellants ran 40 or
more head of cattle without purchasing hay and rented out pasture
for approximately 200 additional head. Norman Wheeler, a farm
and ranch consultant, testified appellants' land prior to the
taking could carry 125 head. However, after the taking an
entirely different situation exists. With the disappearance of
two good stock water springs and most of the bottomland used
for pasture and hay, much of what the cattle ranch depended upon
for sustenance is gone, with the resulting substantial deprecia-
That
tion in the remainder. /damages to remaining land have been
allowed in such situations becomes apparent upon a survey of
authority. 27 Am Jur 2d, Eminent Domain, S 311, provides:
"Damages to remaining land that have been allowed
or considered in determining compensation include
* * * permanent interference with farming, as dis-
tinguished from temporary interference or incon-
venience. * * * " (Emphasis supplied.)
See also Trunkline Gas Company v. O'Bryan, 21 I11.2d 95, 171
In the instant case, the interference with the operation
of appellants' property as a stock ranch by the condemnation
is permanent and so substantial that the $9,000 awarded by the
jury as damages to the remainder can hardly be considered adequate.
As to compensation for that part of appellants' land
taken, this Court finds the jury award to be inadequate as it was
not based on substantial evidence.
The method of valuation for the land taken used by the
Water District's appraiser Howard Sparhawk was comparable sales.
Such a basis for expert opinion has been ruled an acceptable
means of valuation for a taking of this nature, with the extent
of comparability going to the weight of the evidence rather than
to its admissibility. Montana Power Co. v. Wolfe, Mont .
-P.2d , 33 St.Rep. 172; U.S. v. 45,131.44 Acres of
Land, 483 F.2d 569; U.S. ex rel. T.V.A. v. Easement and Right
of Way, 405 F.2d 305.
We find the problem in the instant case is that the
weight given to such appraisal by the jury is simply not support-
ed by the evidence. At trial, Sparhawk testified that since
he believed there were ample comparable sales in Meagher County
from which an evaluation could be made, he did not feel the need
to investigate the possibility of comparable sales in surround-
ing counties. However, upon review of the evidence presented,
it becomes apparent that Sparhawk's reliance on Meagher County
sales was misplaced. Of the approximately forty-seven Meagher
County ranch sales pointed out on a map by Sparhawk, he readily
admitted, through nine pages of testimony, that all but four or
five such sales were low and not comparable.
Then upon cross-examination, Sparhawk's testimony re-
vealed serious deficiencies in the basis for his opinion that
these few sales were in fact comparable to the appellants' prop-
erty and thus could be used in determining the fair market value
of appellants' property. When questioned about the allegedly
comparable Holiday to Jorgenson sale, Sparhawk admitted he had
not computed the carrying capacity of the ranch land involved
in that sale. As to sale #29, the Weingartner property, Sparhawk
admitted the water facilities on such property were poor in
contrast to appellants' property. Concerning sales #5 and #47
relied upon by Sparhawk, it was revealed the property was situated
at an altitude of 6,500 feet and no mention was made of bottom
land. Appellants' property was situated at a considerably lower
altitude, 5,500 feet, and contained good bottom land. Sale #30,
the Cook to Ward sale, was an estate sale but there was some
question as to whether any competitive bidding had taken place
before that sale. Finally, Sparhawk's testimony as to his
evaluation of the Manger property (#39, #40, #41), the sale
which he placed the most credence on in appraising appellants'
land revealed serious shortcomings. Under the persistent ques-
tioning of appellants' attorney, Sparhawk admitted he had no
knowledge of the carrying capacity of the Manger property nor
had he made an appraisal of that property or even investigated
its range land in detail. As the final blow to the basis of
Sparhawk's appraisal, he admitted that actual comparable sales
did not exist in Meagher County!
On the basis of the testimony of the Water District's
own appraiser, this Court finds it impossible to accept the
weight given by the jury to his valuation of appellants' property
in its compensation award for land taken. This is so especially
in view of the fact Sparhawk did not go outside Meagher County
in his search for comparable sales whereas Wheeler, one of
appellants' expert appraisers, testified as to sales in other
counties which he believed to be comparable, sales which indi-
cated a considerably higher price per acre.
It is an established principle of law in condemnation
proceedings, as well as other types of actions, that a jury find-
ing will not be disturbed unless obviously and palpably out of
proportion to the injury done. State Highway Commission v.
Bennett, 162 Mont. 386, 513 P.2d 5; State Highway Commission v.
Jacobs, 150 Mont. 322, 435 P.2d 274; State Highway Commission v.
Manry, 143 Mont. 382, 390 P.2d 97. Such a situation exists in
the instant case. With the heart taken out of appellants' land,
substantial evidence does not exist to support the inadequate
award of $9,000 damage to the remainder. Weighing the weak
attempts by respondent to establish comparable sales in
Meagher County as a basis for Sparhawk's appraisal against
evidence presented by one of appellants' appraisers of much
higher comparable sales in surrounding counties, the compen-
sation given for land was also inadequate.
Jury Instruction No. 9 states that the proper amount
to be paid by the Water District for the use of Tract Two
consists of consideration for the removal of the fill material
" * * * added to the damages that would accrue by loss of use
of such parcel for a period of five years." (Emphasis supplied.)
However, the testimony of the Water District's appraiser indi-
cates that he calculated the compensation for use of Tract Two
as mere rental value in the amount of $4,285, over a period of
five years with no consideration given for the taking of 800,000
cubic yards of fill material. An examination of the jury award
for the right to enter and remove fill material indicates com-
pensation in the amount of $4,544. Thus it would seem the jury
awarded very little for the removal of 800,000 cubic yards of
fill material, with most of the award on Tract Two going to
rent, as calculated by the Water ~istrict'sappraiser. To that
extent the compensation for Tract Two is inadequate.
Accordingly, the judgment of the district court is
reversed and the cause is remanded with orders to grant a new
trial.
.We concur:
*
Chief Justice