No. 13243
I N THE SUPREME COURT OF THE S T A T E O F MONTANA
1977
GEORGE RAUSER and P H Y L L I S A .
RAUSER, h u s b a n d and w i f e ,
P l a i n t i f f s and R e s p o n d e n t s ,
THE TOSTON I R R I G A T I O N D I S T R I C T , MAURICE L .
HUNSAKER, FRANK J . S L I F K A , and SAMUEL F .
K I R S K E Y , t h e m e m b e r s of t h e B o a r d o f C o m m i s s i o n e r s
of s a i d TOSTON I R R I G A T I O N D I S T R I C T ,
D e f e n d a n t s and A p p e l l a n t s .
Appeal from: D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t ,
H o n o r a b l e P e t e r M e l o y , Judge p r e s i d i n g .
C o u n s e l of R e c o r d :
For A p p e l l a n t s :
C o r e t t e , S m i t h and D e a n , B u t t e , M o n t a n a
K e n d r i c k S m i t h a r g u e d and G e r a l d A l l e n a r g u e d , B u t t e ,
Montana
Holter, H e a t h and K i r w a n , Bozeman, Montana
For R e s p o n d e n t s :
H a r r i s o n , L o e n d o r f and P o s t o n , H e l e n a , Montana
J a m e s T . H a r r i s o n , Jr. a r g u e d , H e l e n a , Montana
For A m i c u s C u r i a e :
Thomas O l s o n , B i l l i n g s , Montana
A l v i n E. B i e l e f e l d a r g u e d , B i l l i n g s , Montana
Submitted: March 17, 1977
Decided: bjUN - 6
Filed: f 6 i$n
M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e
Court.
George Rauser and P h y l l i s Rauser, husband and wife, brought
t h i s a c t i o n i n t h e d i s t r i c t c o u r t , Broadwater County, a g a i n s t t h e
Toston I r r i g a t i o n D i s t r i c t and members of t h e Board of Commissioners
of t h a t D i s t r i c t . The complaint a l l e g e d a p o r t i o n of Rausers' land
was taken without compensation, and c o n s t r u c t i o n of t h e i r r i g a t i o n
p r o j e c t with r e s u l t a n t seepage caused water t o stand stagnant on
approximately f o r t y a c r e s of p l a i n t i f f s ' land s i t u a t e d along Warm
Spring Creek. I t a l l e g e d t h i s amounted t o t h e t a k i n g of a flood
easement.
Defendant's motion t o s t r i k e t h e i n d i v i d u a l board members
a s p a r t i e s was granted. T r i a l was had before a jury and a v e r d i c t
returned i n favor of Rausers i n t h e amount of $100,000.
The Toston I r r i g a t i o n P r o j e c t c o n s i s t s of t h e Crow Creek pump
u n i t and a water d e l i v e r y system b u i l t a s a p a r t of t h e Missouri
River Basin P r o j e c t . The land t o be i r r i g a t e d was t o serve a s a
replacement f o r lands flooded by Canyon Ferry Reservoir. The pro-
j e c t began i n 1955 with fewer than a thousand a c r e s under i r r i g a t i o n .
A t present i t covers n e a r l y f i v e thousand a c r e s .
P l a i n t i f f s a r e not members of t h e Toston I r r i g a t i o n D i s t r i c t
b u t t h e i r land i s bounded one one s i d e by land i n t h e D i s t r i c t .
The acreage a l l e g e d taken i s a t a lower e l e v a t i o n than land i n t h e
District.
Each p a r t y presented e x p e r t hydrological testimony and expert
v a l u a t i o n testimony. P l a i n t i f f s ' hydrological expert t e s t i f i e d
t h e source of t h e water on t h e Rauser property was t o t h e south and
e a s t , basing h i s opinion on w e l l readings taken over a s u b s t a n t i a l
number of years. Along w i t h o t h e r f a c t o r s , h e took i n t o consider-
a t i o n t h e e x t e n t of i r r i g a t i o n i n t h e D i s t r i c t and t h e r a i n f a l l .
He a l s o read i n t o evidence from a United S t a t e s Geological Survey
document e n t i t l e d "Geology and Occurrence of Ground Water i n Town-
send Valley, Montana" t h e following statement :
"The a p p l i c a t i o n of a d d i t i o n a l i r r i g a t i o n water t o t h e
benchland f l a n k i n g Warm Spring Creek w i l l i n c r e a s e t h e
e x t e n t of waterlogging i n t h e bottom land unless provi-
s i o n i s made f o r more adequate drainage. I n t h i s p a r t of
t h e v a l l e y t h e T e r t i a r y sand and g r a v e l d e p o s i t s , which
a r e mantled by permeable windblown s o i l , a r e underlain by
beds of hardened c l a y , l o c a l l y r e f e r r e d t o a s 'hardpan. I
I f water i s applied t o t h e s e lands, a gradual r i s e i n t h e
water t a b l e w i l l take place. This r i s e w i l l r e s u l t i n t h e
increased flow of e x i s t i n g s p r i n g s i n t h e lower p a r t of
t h e v a l l e y , and new springs w i l l appear along t h e slope
from t h e benchland t o t h e v a l l e y bottom. I n t h i s a r e a t h e
v a l l e y bottom i s underlain by r e l a t i v e l y impermeable f i n e -
t e x t u r e d c l a y . The c a p i l l a r y f r i n g e above t h e water t a b l e
w i l l r i s e t o t h e s u r f a c e i n much of t h e bottom land, s a l i n e
s o i l w i l l develop, and t h e land w i l l eventually become unpro-
ductive. Water logging w i l l become more extensive i f i r r i -
g a t i o n water i s applied t o t h e benchland t h a t l i e s a t a
higher e l e v a t i o n than t h e present i r r i g a t e d land u n l e s s
provision i s made f o r more adequate drainage. This condi-
t i o n w i l l e x i s t not only i n t h e Crow Creek a r e a but a l s o
i n o t h e r p a r t s of t h e v a l l e y where a d d i t i o n a l i r r i g a t i o n i s
planned . I 1
The expert i n d i c a t e d h i s findings confirmed t h i s p r e d i c t i o n ,
George Ranser t e s t i f i e d t h e diminution of value because of
t h e "taking" t o t a l e d $100,000. P l a i n t i f f s ' expert v a l u a t i o n w i t -
ness t e s t i f i e d t h e l o s s was i n t h e range of $35,000 basing h i s
opinion on comparable s a l e s of t h r e e nearby p a r c e l s .
Defendant's hydrological expert t e s t i f i e d t h e cause of t h e
flooding on p l a i n t i f f s ' land was t h e enlargement of p l a i n t i f f s '
own i r r i g a t i o n d i t c h which c r e a t e d a b a r r i e r t o t h e n a t u r a l drainage
of t h e land. Defendant's v a l u a t i o n e x p e r t placed t h e t o t a l l o s s
a t $26,000.
- 3 -
The p a r c e l a f f e c t e d by t h e water includes t h e land where
p l a i n t i f f s ' home, shop and outbuildings a r e located. The United
S t a t e s government b u i l t and owns t h e p h y s i c a l a s s e t s of t h e i r r i g a -
t i o n system. Almost from t h e beginning of i r r i g a t i o n on t h e p r o j e c t ,
t h e r e have been n e g o t i a t i o n s between Rausers and t h e D i s t r i c t about
t h e flooding of t h e land and proposals t o d r a i n it. The D i s t r i c t
went so f a r a s t o draw up plans and o b t a i n b i d s f o r a d r a i n system,
b u t because t h e b i d was s u b s t a n t i a l l y more than expected nothing
f u r t h e r was done.
The Toston I r r i g a t i o n D i s t r i c t appeals. W summarize t h e
e
i s s u e s a s these:
(1) May an i r r i g a t i o n d i s t r i c t e x e r c i s e t h e power of eminent
domain on a p r o j e c t whose-.physical a s s e t s a r e owned by t h e f e d e r a l
government?
(2) May t h e r e be a condemnation of property without a showing
of n e g l i g e n t design, c o n s t r u c t i o n , o r o p e r a t i o n of t h e p r o j e c t .
(3) Was t h e a c t i o n barred by l a c h e s ?
(4) Was t h e v e r d i c t supported by s u b s t a n t i a l c r e d i b l e
evidence ?
(5) A r e a t t o r n e y f e e s allowable?
( 6 ) Was t h e r e an adequate d e s c r i p t i o n of t h e land h e r e involved?
I s s u e (1) The power t o condemn property i s granted t o
i r r i g a t i o n d i s t r i c t s by Montana s t a t u t e , s e c t i o n 89-1301(3), R.C.M.
1947, and s t a t e s :
"(3) The board * ** s h a l l a l s o have power and a u t h o r i t y t o
a c q u i r e by purchase, l e a s e , c o n t r a c t , condemnation, o r o t h e r
l e g a l means, lands (and r i g h t s i n lands) f o r r i g h t s of way,
f o r r e s e r v o i r s , f o r t h e s t o r a g e of needful waters, and f o r
dam s i t e s , and necessary appurtenances, and such o t h e r lands
and property a s may be necessary f o r t h e c o n s t r u c t i o n , use,
maintenance, r e p a i r , improvement, enlargement and o p e r a t i o n
of any d i s t r i c t system of i r r i g a t i o n works."
That t h e p h y s i c a l a s s e t s a r e owned by t h e United S t a t e s
government does not l i m i t t h e power t o condemn. Section 89-1301(7)
c l e a r l y i n d i c a t e s s u b s t a n t i a l f e d e r a l involvement i s contemplated
i n " c o n s t r u c t i o n , o p e r a t i o n , and maintenance of t h e necessary works
f o r t h e d e l i v e r y and d i s t r i b u t i o n of water therefrom ** *.'I De-
fendant argues t h e t r i a l c o u r t lacked j u r i s d i c t i o n because t h e
physical a s s e t s a r e owned-by t h e United S t a t e s . This argument must
f a i l f o r no e f f o r t s were made on t h e p a r t of defendant t o remove t h e
case t o f e d e r a l c o u r t and no c a s e a u t h o r i t y i s c i t e d o r r e l i e d upon
t o support defendant ' s p o s i t i o n .
While t h e D i s t r i c t questions whether t h e r e was i n f a c t a
taking here and t h e compensability of i t , c a s e law holds t h e r e can
be a t a k i n g without a t o t a l physical a p p r o p r i a t i o n of land. Here
t h e D i s t r i c t d i d n o t condemn t h e land, r a t h e r i t caused t h e land t o
be permanently invaded by t h e p e r c o l a t i o n of water. Similar f a c t
cases have been considered by t h e United S t a t e s Supreme Court recog-
n i z i n g t h e r i g h t s of t h e damaged landowner. United S t a t e s v. Kansas
City L i f e I n s . Co., 339 U.S. 799, 70 S.Ct. 885, 94 L ed 1277; United
S t a t e s v. Lynah, 188 U.S. 445, 23 S.Ct. 349, 47 L ed 539; 2 Nichols
on Eminent Domain, Taking and Damage 56.32.
I s s u e (2). Whether t h e r e may be a t a k i n g by t h e D i s t r i c t without
a showing of negligence i n design, c o n s t r u c t i o n , o r operation of t h e
District?
I n a c t i o n s f o r damage f o r seepage t h e r u l e a s s t a t e d i n
Fleming v. Lockwood, 36 Mont. 384, 391, 92 P. 962, and quoted i n
Rhodes v. Weigand, 145 Mont. 542, 549, 402 P.2d 588, i s :
"* * * I f , i n f a c t , t h e seepage occurred a s p l a i n t i f f
contends, it must have been t h e r e s u l t of negligence
on ~ockwood'sp a r t , e i t h e r i n c o n s t r u c t i n g o r operating
t h e d i t c h , s i n c e it i s n o t contended t h a t it was t h e
r e s u l t of i n e v i t a b l e accident o r was caused'by a n . a c t
of God; and therefore the plaintiff had the burden of
proof, in the first instance, to show negligence 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,a negligence case, provided for payment in the case of
intentionally caused torts. The District cites Rhodes 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 1961 and again,
after complaint had been made to him of flooding in
the year 1962, persisted in his negligent and deliberate
acts .I1
Montana's case law does not require a showing of negligence
or a theory of negligence when faced with deliberate or intentional
acts. In Calvert v. Anderson, 73 Mont. 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.
In Rhodes the court found that the rule which requires a showing
of negligence was 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 shall not be taken or damaged for
public use without just compensation to the full extent
of the loss having been first made to or paid into court
for the owner. In the event of litigation, just compensation
shall include necessary expenses of litigation to be awarded
by the court when the private property owner prevails."
An early Montana case, Less v. City of Butte, 28 Mont. 27, 32,
72 P. 140, in construing this identical language in the 1889 Consti-
tution "Private property shall not be taken or damaged for public
use without just compensa-tion* * *I' said:
"* * * Under constitutions which provide that property
shall not be 'taken or damaged' it is universally held
that 'it is not necessary that there be any physical
invasion of the individual's property for public 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 consequential damage 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---fault or 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 occasional damage which occurs
even though the district has exercised due care, does not apply to
the facts here. 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 remedial work. 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, as here, the damages are known or
knowable and are an inevitable result of the intentional undertaking
of the project, there is no need to show negligent design, construction
or operation. It is enough to show the damages were proximately
caused by the undertaking of the project and a reasonable foresee-
able consequence of the undertaking. It is implicit in inverse con-
demnation 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, 42 Cal.Rptr. 89, 96, 398 P.2d 129, 136;
20 Hastings Law Journal 431.
H i s t o r i c a l l y it appears i n e v i t a b l e t o each new i r r i g a t i o n
p r o j e c t t h a t c e r t a i n unexplained and unplanned f o r problems a r i s e
t h a t damage adjacent property owners. I n many i n s t a n c e s t h e r e i s
no negligence o r o t h e r wrongful conduct o r omission on t h e p a r t of
defendant. The i n j u r e d property owners have sought r e d r e s s f o r
damages on t h e a l t e r n a t i v e t h e o r i e s of i n v e r s e condemnation and t o r t ,
a s applied t o 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 i n t h e cases of t h i s type i s t h e holding of t h e
C a l i f o r n i a Supreme Court i n Albers:
"From t h e foregoing a n a l y s i s of t h e cases and o t h e r
l e g a l a u t h o r i t i e s it i s apparent t h a t we a r e n o t required
t o choose between two a b s o l u t e r u l e s , one of l i a b i l i t y and
one of n o n l i a b i l i t y , b u t a r e faced w i t h a more l i m i t e d i s s u e .
The question i s n o t whether i n a l l c a s e s , a property owner
should n o t be permitted t o recover i n an i n v e r s e condemnation
a c t i o n i f a p r i v a t e p a r t y would not be l i a b l e f o r damages
s i m i l a r l y i n f l i c t e d , b u t whether t h e r e i s o r should be a
q u a l i f i c a t i o n o r l i m i t a t i o n of t h a t r u l e t o the e f f e c t t h a t
t h e property owner may recover i n such an a c t i o n where
a c t u a l physical damage i s proximately caused t o h i s property
by a p u b l i c improvement a s d e l i b e r a t e l y planned and b u i l t
** *." 398 P.2d 136.
The C a l i f o r n i a Court concluded t h a t such damages a r e compensable
and adopted f i v e f a c t o r s f o r consideration. W f i n d t h i s case
e
a p p l i c a b l e t o t h e i n s t a n t c a s e and adopt a s guides t h e f i v e f a c t o r s .
1 ) The damage t o t h i s property, i f reasonably f o r e s e e a b l e , would
have e n t i t l e d t h e property owners t o compensation; 2) t h e l i k e l i h o o d
of p u b l i c works not being engaged i n because of unforeseen and un-
foreseeable p o s s i b l e d i r e c t physical damage t o r e a l e s t a t e i s remote;
3) t h e property owners d i d s u f f e r d i r e c t p h y s i c a l damage t o t h e i r
p r o p e r t i e s a s t h e proximate r e s u l t of t h e works a s d e l i b e r a t e l y
planned and c a r r i e d o u t ; 4) t h e c o s t of such damage can b e t t e r be
absorbed, and with i n f i n i t e l y l e s s hardship, by t h e taxpayers a s a
whole, than by owners of t h e i n d i v i d u a l p a r c e l s , and t5) t o quote from
Clement v. S t a t e Reclamation Board, 35 Cal.2d 628,642, 220 P.2d 897,
905, "the owner of t h e damaged property i f uncompensated would
c o n t r i b u t e more than h i s proper share t o t h e p u b l i c undertaking."
The C a l i f o r n i a Court then noted, quoting from an e a ~ r l yopinion,
Bacich v. Board of Control, 23 Cal.2d 343, 351, 144 P.2d 818, 823,
quoting from Sedgwick on C o n s t i t u t i o n a l Law:
""'The tendency under our system i s too o f t e n t o
s a c r i f i c e t h e i n d i v i d u a l t o t h e community; and i t
seems very d i f f i c u l t i n reason t o show why t h e S t a t e should
n o t pay f o r property which i t d e s t r o y s o r impairs t h e v a l u e ,
a s w e l l a s f o r what i t p h y s i c a l l y takes. **
,*.""' a
I s s u e 3. The D i s t r i c t argues t h e a c t i o n i s barred by laches.
The p r o j e c t was begun i n 1955 and t h i s actions was n o t i n i t i a t e d u n t i l
1973. The evidence r e v e a l s t h a t complaints were made t o t h e
D i s t r i c t almost from t h e o u t s e t and remedial a c t i o n was discussed
u n t i l sometime j u s t p r i o r t o t h e commencement of t h i s a c t i o n .
Laches i s an e q u i t a b l e defense. This Court i n Davis v. Steingruber,
131 Mont. 468, 470, 311 P.2d 784, s a i d :
"Laches means negligence i n t h e a s s e r t i o n of a r i g h t , and
e x i s t s where t h e r e has been a delay of such d u r a t i o n a s t o
render enforcement of t h e a s s e r t e d r i g h t i n e q u i t a b l e ."
t h e r e i s no unexplained delay which would j u s t i f y
> ,
t h s a p p l i c a t i o n of t h e d o c t r i n e of laches and t h e r e i s no p r e j u d i c e
s u f f i c i e n t t o j u s t i f y t h e a p p l i c a t i o n of. laches. Thus t h e a c t i o n
i s not barred by laches. The d i s t r i c t I 1 s a c t i o n s l u l l e d p l a i n t i f f s
throughout t h e years between t h e beginning of t h e D i s t r i c t and t h e
f i l i n g of t h e a c t i o n .
Issue (4). I s t h e v e r d i c t supported by t h e evidence? This
involves two questions. F i r s t , was t h e United S t a t e s Geological
r e p o r t e n t i t l e d "Geology and Occurrence of Ground Water i n t h e
Townsend Valley,Montana1' admissible i n t o evidence over a hearsay
objection? This document contains a d e t a i l e d d e s c r i p t i o n of t h e
geography, geomorphology, geology, ground water, and chemical q u a l i t y
of t h e water and has a s h o r t summary and conclusion s e c t i o n . Plain-
t i f f s ' hydrology expert used t h e d a t a i n t h e n e a r l y 50 pages of
measurements of water l e v e l observation w e l l s along with t h e g e n e r a l
information i n the document, a s an a i d i n h i s a n a l y s i s of t h e ~ a u s e r s '
probdkm. The expert t e s t i f i e d a s foundation t h a t (1) t h e information
was a v a i l a b l e t o t h e p u b l i c and o t h e r s i n h i s p r o f e s s i o n ; (2) t h e
document and o t h e r s l i k e it were recognized a s a u t h o r i t i e s and r e l i e d
upon by p r o f e s s i o n a l s i n t h e i r f i e l d of work, and ( 3 ) t h e document was
prepared i n t h e normal course of business by t h e agency p r i o r t o t h e
b u i l d i n g of t h e i r r i g a t i o n p r o j e c t .
Section 93-1101-8, R.C.'M. 1947, s t a t e s :
" H i s t o r i c a l works, books of science o r a r t , and
published maps o r c h a r t s , when made by persons i n d i f f e r e n t
between t h e p a r t i e s , a r e prima-facie evidence of f a c t s of
g e n e r a l n o t o r i e t y and i n t e r e s t . " I
An e a r l y case i n t e r p r e t i n g s e c t i o n 93-1101-8, Lynes v. Northern
P a c i f i c Ry. Co., 4 3 Mont. 317, 329, 117 P. 81, discussed t h i s s e c t i o n
a s i t r e l a t e d t o t h e a d m i s s i b i l i t y of c e r t a i n t a b l e s of r e s u l t s of t e s t s
made on a i r brakes on t r a i n s of d i f f e r e n t tonnage. The t a b l e s were
o f f e r e d t o corroborate t h e e x p e r t ' s opinion and a s independent
evidence of t h e f a c t s shown. The Court s a i d :
"* * * i f t h e proper preliminary proof i s made, v i z . ,
t h a t t h e book o r c h a r t o f f e r e d i s by a person i n d i f f e r e n t
between t h e p a r t i e s l i t i g a n t , i s standard among t h e pro-
f e s s i o n , t r a d e o r occupation t o which it r e l a t e s , and i s
accepted and a c t e d upon a s a c c u r a t e , it should be admitted,
upon t h e theory t h a t t h e matters which i t contains a r e f a c t s
, , of ,general riotariety'and i n t e ? e s t ."
The document h e r e involved i s s i m i l a r t o t h e one involved
i n Lynes and was o f f e r e d f o r s u b s t a n t i a l l y t h e same purposes. The
foundation required f o r t h e admission, t h a t i t was prepared p r i o r t o
l i t i g a t i o n by p a r t i e s i n d i f f e r e n t between t h e p a r t i e s and t h a t i t i s
accepted a s an a u t h o r i t y and r e l i e d on a s such, i s s u f f i c i e n t
a s s u r a n c e of t h e t r u t h o f t h e m a t t e r s contained t h e r e i n and t h u s
e x c e p t s it from t h e requirement t h a t t h e speaker be a v a i l a b l e f o r
cross-examination.
W n o t e h e r e t h a t t h e p o r t i o n of t h e summary and conclusion
e
read i n t o evidence does n o t speak t o t h e e x i s t e n c e o f p r e s e n t harm,
only p r e d i c t s such harm. It goes n o t t o t h e t r u t h of t h e i s s u e ,
b u t t o t h e knowledge o r i n t e n t of t h e b u i l d e r s of t h e p r o j e c t .
The D i s t r i c t argued t h e j u r y d i s r e g a r d e d t h e evidence t h a t t h e
D i s t r i c t was n o t r e s p o n s i b l e f o r any seepage p a s t t h e p o i n t of
d e l i v e r y a t t h e headgates. The evidence of where t h e seepage came
from was a m a t t e r f o r t h e j u r y t o d e c i d e and was decided a g a i n s t t h e
c o n t e n t i o n s of t h e D i s t r i c t . There was c o n s i d e r a b l e evidence t o
support t h e j u r y ' s d e c i s i o n .
Second, a s t o t h e o t h e r c h a l l e n g e s made t o t h e d e t e r m i n a t i o n
o f cause and t h e v a l u a t i o n - - i s t h e r e s u b s t a n t i a l c r e d i b l e evidence
t o support t h e v e r d i c t and judgment? That i s t h e scope of t h i s
Courts review, S t a t e Highway ~omrn'nv. Vaughan, 155 Mont. 277,
470 P.2d 967.
A s t o c a u s e , both p a r t i e s p r e s e n t e d a number of w i t n e s s e s ,
i n c l u d i n g two h i g h l y q u a l i f i e d and extremely convincing e x p e r t
w i t n e s s e s who gave c o n f l i c t i n g e x p l a n a t i o n s of t h e cause o f t h e
injury. There i s s u b s t a n t i a l c r e d i b l e evidence f o r t h e j u r y ' s
f i n d i n g s of cause.
As t o v a l u a t i o n , i t i s t r u e t h e amount t h e j u r y r e t u r n e d a s
~ t v e r d i c t i s t h e h i g h e s t amount t e s t i f i e d t o and t h i s testimony
s
was by t h e landowner. This Court has p e r m i t t e d t h e landowner t o
t e s t i f y a s t o t h e value of h i s land w i t h i n c e r t a i n l i m i t s . In State
Highway Comm'n v . Barnes, 151 Mont. 300, 305, 443 P.2d 1 6 , t h i s
Court, quoting a p r i o r c a s e , s a i d :
"we now r e s t a t e t h e r u l e t o be t h a t an owner, upon
prima f a c i e proof of ownership, s h a l l be q u a l i f i e d t o
e s t i m a t e i n a reasonable way t h e value of h i s property
f o r t h e use t o which he has been p u t t i n g i t . Such owner
i s not q u a l i f i e d by v i r t u e of ownership alone t o t e s t i f y
a s t o i t s value f o r o t h e r purposes u n l e s s he possesses, a s any
o t h e r witness a s t o value, "some p e c u l i a r means of forming
an i n t e l l i g e n t and c o r r e c t judgment a s t o t h e value of t h e
p r o p e r t y i n question beyond what i s presumed t o be possessed
by men generally." '"
Here, a s i n Barnes, t h e landowner t e s t i f i e d t o t h e value of
t h e land a s i t was being used.
While t h e D i s t r i c t argues t h a t Rauser's value ..testimony i s
i n c r e d i b l e , it should be noted t h a t within t h e 40 a c r e s involved
a r e a l l t h e b u i l d i n g s of t h e ranch. He t e s t i f i e d t h e water problems
began with t h e commencement of t h e p r o j e c t : t h a t h i s two s e p a r a t e
basements were flooded; t h e s e p t i c tank would n o t function; t h a t
land n e a r t h e home i s inundated t h e year around; t h a t he could n o t
-
use h i s calving a r e a i n t h e winter and a new one had t o be b u i l t ;
t h a t he could not keep c o r r a l s clean because of t h e water; and t h a t
he had t o g e t out of t h e hog business a value t o t h e ranch operation.
With t h a t a s a background, he went on t o t e s t i f y a s t o t h e
value of h i s ranch before and a f t e r t h e taking. The t r i a l judge
d i d n o t abuse h i s d i s c r e t i o n i n allowing t h i s testimony.
Issue (5). This i s s u e involves a t t o r n e y f e e s and c o n s i s t s of
two questions. F i r s t , does t h e court have t h e power t o award
a t t o r n e y f e e s i n an i n v e r s e condemnation c a s e ? Second, were a t t o r n e y
f e e s properly awarded i n t h i s case?
First. A r t . XI, Section 29, 1972 Montana C o n s t i t u t i o n provides:
" P r i v a t e property s h a l l n o t be taken o r damaged f o r
p u b l i c use without j u s t compensation t o t h e f u l l e x t e n t
of t h e l o s s having been f i r s t made t o o r paid i n t o c o u r t
f o r t h e owner. I n t h e event of l i t i g a t i o n , j u s t compensa-
t i o n s h a l l include necessary expenses of l i t i g a t i o n t o be
awarded by t h e c o u r t when t h e p r i v a t e property owner pre-
vails. II
The s t a t u t e implementing t h e l a s t sentence of A r t . 11, S e c t i o n 29,
i s s e c t i o n 93-9921.1, R.C.M. 1947, which provides:
h he condemnor, s h a l l w i t h i n t h i r t y (30) days a f t e r an
a p p e a l i s p e r f e c t e d from t h e commissioner's award o r
r e p o r t , submit t o condemnee a w r i t t e n f i n a l o f f e r of
judgment f o r t h e p r o p e r t y t o be condemned, t o g e t h e r w i t h
necessary expenses of condemnee t h e n accrued.
" I f any time p r i o r t o t e n (10) days b e f o r e t r i a l
t h e condemnee s e r v e s w r i t t e n n o t i c e t h a t t h e o f f e r i s
accepted, e i t h e r p a r t y may then f i l e t h e o f f e r and n o t i c e
of acceptance t o g e t h e r w i t h proof of s e r v i c e t h e r e o f and
thereupon judgment s h a l l be e n t e r e d . An o f f e r n o t accepted
s h a l l be deemed withdrawn and evidence t h e r e o f i s n o t
a d m i s s i b l e a t t h e t r i a l except i n a proceeding t o determine
c o s t s . The f a c t t h a t an o f f e r i s made b u t n o t accepted does
n o t preclude a subsequent o f f e r . I n t h e event of l i t i g a t i o n ,
and when t h e p r i v a t e p r o p e r t y owner p r e v a i l s , by r e c e i v i n g
an award i n excess of t h e f i n a l o f f e r of t h e condemnor, t h e
c o u r t s h a l l award n e c e s s a r y expenses o f l i t i g a t i o n t o t h e
condemnee ."
For f u t u r e r e f e r e n c e i n such c o n t r o v e r s i e s , we n o t e h e r e
t h a t the 1977 Montana L e g i s l a t u r e passed House B i l l No. 483, now
Chapter 48, 1977 Session Laws. T h i s i s a n a c t t o d e f i n e and
provide a manner f o r computing t h e amount of n e c e s s a r y expenses
of l i t i g a t i o n r e q u i r e d by s e c t i o n 93-9921.1, R.C.M. 1947. While
n o t e f f e c t i v e f o r t h e i n s t a n t c a s e , a l l c a s e s a r i s i n g a f t e r J u l y 1,
1977, t h e e f f e c t i v e d a t e of t h e a c t , w i l l come under t h i s a c t .
I n S t a t e v. Olsen, 166 Mont. 139, 147, 531 P.2d 1330,
t h e Court found t h e 1972 C o n s t i t u t i o n and t h e s t a t u t e implementing i t
r e q u i r e d payment of e x p e r t w i t n e s s e s and a t t o r n e y f e e s .
W n o t e t h a t s e c t i o n 93-9921.1,
e R.C.M. 1947, does n o t use t h e
terms " p l a i n t i f f " and "defendant" a s do most of t h e p r i o r s e c t i o n s
i n t h e eminent domain c h a p t e r , Chapter 99, T i t l e 93.
I n Frustuck v. C i t y of F a i r f a x , 4 1 Cal.Rptr. 56, attorney fees
were denied i n an i n v e r s e condemnation c a s e . There t h e c o u r t r e s t e d
i t s d e c i s i o n on two f a c t o r s (1) t h a t t h e word "defendant" was used
i n t h e eminent domain a t t o r n e y ' s f e e s t a t u t e i n d i c a t i n g t h a t t h e
attorneyFs fee statute applied only to the statutory procedure,
and (2) there was no constitutional requirement that attorney fees
be paid in an eminent domain action in California.
However, in a recent case, Holtz v. San Francisco Bay Area
Rapid Transit District, 131 Cal.Rptr. 646, 552 P.2d 430, 436, footnote
the court notes :
"It is asserted that since federal law makes 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 real property. Aside from the
fact that no such limitation is made by section 1246.3 and
that, as we conclude above, the loss of lateral support may
be characterized as a taking of an interest in real property,
this argument ignores the established principle that recovery
in inverse condemnation is based on the constitutional pro-
vision requiring just compensation,not on a theory of tort.
(Reardon v. San Francisco, supra, 66 Cal. 492, 505, 6 P. 317.)
We have consistently rejected the contention that the right
to recover in eminent doxhafn .derives from'tort doetrine,'em-
phasizing that as a matter of policy the owner of property
taken or damagd for public use should not contribute a dis-
proportionate share of the cost of a public undertaking.
{Citing cases]"
In Montana, precisely the opposite is true. "Condemnor" and
11
condemneel'are used in the attorney's fee statute in contrast to
the rest of the chapter which speaks of "defendant1'and "plaintiff" .
Further, there is a clear constitutional requirement that attorney
fees be paid in condemnation cases where the landowner prevails.
Attorney fees are permissible in inverse condemnation cases in
Montana.
Second. The District alleges no attorney fee is proper in this
case because there was no final offer as required by statute. This
same objection was discussed in Olsen where the Court said:
"To adopt such a theory here would contravene the intent
of the statute and would violate the constitutional mandate.
Article 11, Section 29, 1972 Constitution requires that a
landowner be compensated for necessary expenses of litigation
if he prevails. This constitutional directive cannot be
frustrated by inadvertent or intentional violations of statu-
tory procedure." 166 Mont. 147.
While i t i s understandable t h e D i s t r i c t i n t h i s i n v e r s e
condemnation a c t i o n d i d not wish t o follow t h e s t a t u t o r y condemnation
procedure, t h a t may not be used t o deny p l a i n t i f f s t h e i r a t t o r n e y
fees. I n t h e i n s t a n t case a $30,000 b i d f o r work t h a t would have
cured t h e problem was r e j e c t e d a s being too c o s t l y . The amount t h e
p r o j e c t was expected t o c o s t was around $6,000. By inference i t seems
c l e a r t h e $100,000 v e r d i c t exceeded t h e " f i n a l offer" of t h e
condemnor.
Defendant next questions whether such f e e may be awarded where
no evidence was taken a s required by Crncevich v. Georgetown
Recreation Corp., 168 Mont. 113, 541 P.2d 56, 59, 32 St.Rep. 963
and F i r s t S e c u r i t y Bank of Bozeman v. Tholkes, Mont *-9
547 P.2d 1328, 33 S t . Rep. 341'. I n Tholkes t h i s Court vacated t h e
judgment on a t t o r n e y f e e s and remanded t h e cause f o r an e v i d e n t i a r y
hearing on a t t o r n e y f e e s . Here, since t h e s t a t e o r p o l i t i c a l sub-
d i v i s i o n must pay t h e a t t o r n e y f e e s , t h e r e i s even s t r o n g e r reason t o
remaidcl t h e i n s t a n t case f o r c o n s i d e r a t i o n of t h e f a c t o r s s e t out
i n Crncevich and Tholkes. Under t h e 1889 C o n s t i t u t i o n f e e s i n
condemnation cases were percentage contingency fees. In the private
agreements t h e p a r t i e s p r o t e c t e d t h e i r own i n t e r e s t s b u t where t h e
f e e i s t o be paid by t h e s t a t e t h e r e i s no i n c e n t i v e f o r t h e land-
owner t o bargain t o keep t h e percentage reasonable.
C l e a r l y success i s an important f a c t o r i n s e t t i n g an a t t o r n e y
fee. The " r e s u l t secured" i s among t h e f a c t o r s s e t out i n Crncevich
and Tholkes, but it i s n o t t h e only f a c t o r and a l l must be considered
and weighed t o a r r i v e a t a reasonable f e e . W e wish t o make c l e a r
t h a t t h e r e i s a b s o l u t e l y no i n t e n t t o imply i n any way t h a t t h e
f e e i n t h e i n s t a n t case i s unreasonable, b u t only t o r e q u i r e t h a t t h e
reasonableness of the fee be shown by evidence. Often those
unfamiliar with the difficulties and 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 ( ) The sufficiency of the description of what was
6.
taken. It was clear to the jury,which had viewed the land,and
the parties what land was involved, but as to third parties and
subsequent takers a legal description of the land including a survey
of metes and bounds should be furnished and made a part of the judg-
ment.
Judgment is affirmed in part, and remanded in part to the
trial court for further hearings as directed by this opinion.
We Concur:
- --
Justices.
Mr. J u s t i c e F r a n k I . Haswell:
I concur i n t h e r e s u l t .