No. 84-297 C
IN THE SUPREME COURT OF THE STATE OF MONTANA
1984
WILLIAM H . DERRENGER,
plaintiff and Appellant,
-VS-
CITY OF BILLINGS, a Municipal Corp.,
Defendant and Respondent.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In a n for the County of Yellowstone,
.d
The Honorable Charles Luedke, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Moses Law Firm; Jay F. Lansing, Billings, Montana
For Respondent:
James L. Tillotson, Billings, Montana
Submitted on Briefs: Sept. 24, 1984
Decided: December 6, 1984
Filed: r
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Clerk
Mr. Justice Frank B. Morrison delivered the opinion of
the Court.
This is an appeal from a summary judgment granted to the
City of Bil-lings by the District Court of the Thirteenth
Judicial District, of Yellowstone County. We reverse and
remand.
William H. Derrenger, filed a complaint for a declara-
tory judgment against the City of Billings on September 9,
1983, requesting the district court to construe and interpret
the written annexation agreement entered into with the City
of Billings. Both parties filed a motion for summary judg-
ment. The judgment entered April 12, 1984 denied Derrenger's
motion and granted a summary judgment in favor of the City of
Billings.
Derrenger found that certain facts relied upon by the
district court were clearly erroneous and filed a motion to
amend the findings, conclusions and judgment. On June 22,
1984, the district court amended its findings but refused to
amend its earlier judgment. Derrenger appeals both
judgments.
In 1976 William H. Derrenger purchased a parcel of land
in the Billings area which comprised three tracts, Certifi-
cates of Survey No. 334, No. 1566 and No. 1610. At the time
of this action, Tract No. 334 was a part of the City of
Billings and designated Residential-9600, a zone classifica-
tion restricting use of the property to single-family resi-
dences. The remaining two tracts were zoned Agriculture Open
Space under Yellowstone County zoning regulations.
In 1978 the City of Billings expressed an interest in
annexing Certificates of Survey No. 1566 and No. 1610. On
August 28, 1978, the Salsburys, legal titleholders and sell-
ers to Derrenger, and the City of Billings entered into a
written agreement entitled "Waiver of Right to Protest Annex-
ation and Agreement on Non-conforming Use," which is the
subject of this appeal. The Agreement was approved by the
City Council of Billings and signed by the mayor. Tracts No.
1566 and No. 1610 were annexed on November 27, 1978, and
rezoned R-96 on December 11, 1978.
In 1983, Derrenger proposed to build a multi-family
residential unit on his property, all portions of which were
then zoned R-96. A controversy arose as to the construction
of the 1978 annexation agreement and its effect upon the
proposed multi-family residential use. Derrenger filed a
complaint on September 9, 1983, for a declaratory judgment,
requesting judicial construction of the annexation agreement
to permit multi-family residential development on his proper-
ty. Both the City and Derrenger believed the language of
their agreement was unambiguous and supportive of their
individual contentions and moved the district court for a
summary judgment. In the judgment entered April 12, 1984,
the trial court denied Derrenger's summary judgment and
granted the summary judgment in favor of the City. Derrenger
appeals and presents the following issues:
1. Whether the district court erred in interpreting the
language of the agreement, "Residential Purposes", to be only
a single-family residential use in conformance with existing
zoning on the property.
2. Whether the district court erred in failing to give
effect to the language of the agreement contained in para-
graph l(d), page 2, in its interpretation and construction of
the pertinent language of the agreement.
3. Whether the district court erred in limiting the
effect of the agreement to only those non-conforming uses
which existed prior to or at the time of the agreement.
Pertinent language of the August 78, 1979, annexation
agreement describing accepted non-conforming uses, provides
as follows:
"WHEREFORE, on the basis of the above premises, the
Owners agree to be annexed into the City of Bill-
ings and to waive any rights to protest said annex-
ation upon the following conditions; and the City
of Billings in consideration thereof agrees to said
conditions:
"1. That simultaneously with the annexation the
following non-conforming use as to the above tracts
be established, adopted, and recognized by the City
of Billings:
"(a) That the tracts, buildings, modification
thereof, and future buildings may - - - for
be used
residential purposes, for parking, and the purpose
of receiving, storing, growing if applicable,
processing, and selling produce, fruit, vegetables,
nuts, grain and grain products which are dried,
fresh or otherwise, lawn and garden items and parts
thereof, flowers, trees, shrubs, seeds, and nursery
stock, lawn ornaments, lawn furniture and gift
items and specialty retail items, Christmas trees
and ornaments and other holiday decorative items,
and all related items;
" (b) That the buildings and structures upon these
tracts may be modified, enlarged, and repaired, and
if destroyed in whole or part, rebuilt; and if need
be, additional buildings and structures may be
built upon this tract at the discretion of the
Owners or future owners of the tract to accommodate
the above-specified uses;" (emphasis added)
In a memorandum accompanying the order of March 29,
1983, the trial court found that the subject agreement was
clear on its face and said:
". .
. A review of the agreement leads the Court to
the Conclusion that the agreement is legal, in that
it does not constitute contract zoning, and that it
is not ambiguous. It speaks for itself, but from a
consideration of the terms it contains, it speaks a
different message than that contended for by
plaintiff. l1
The district court then interpreted the language of the
agreement and imposed a limitation on the terms as follows:
"It is apparent that the agreement is a recognition
by the parties that, at the time of its execution,
there were several uses being made of the premises
which were non-conforming. The document was merely
an agreement by the City to recognize and to allow
the continuation of these already-established
non-conforming uses and to provide a specific
description of what those uses were.
"At the time the agreement was entered into, and at
all times prior thereto, the only residential use
made or being made of the premises was a
single-family residence. - Salsbury affidavit,
See,
Exhibit 'A' to Document No. 11. Therefore, since
the agreement was only a recognition of the then
non-conforming uses, and no non-conforming
multi-family residential use was in effect, the
only residential use which it allows is a conform-
ing one, to-wit: Single-family dwellings."
If the agreement is ambiguous, then summary judgment is
not proper and the question of intention should be submitted
to the jury. Schell v. Peters (1966), 147 Mont. 21, 410 P.2d
152, 155. The issue reduced to simplest terms is whether
"residential purposes" is so clear on its face as to preclude
multi-family residential purposes. We think not.
The Supreme Court of Ohio had occasion to make a similar
interpretation in Hunt v. Held (1914), 107 NE 765. There the
issue was whether multi-family use violated a restriction for
"residence purposes only." The Court, in deciding against
the more restrictive use, said:
" [3] But is there any doubt as to the
meaning of the words? The word 'resi-
dence,' as we view it, is equivalent to
'residential' and was used in
contradistinction to 'business.' If a
building is used as a place of abode and
no business carried on, it would be used
for residence purposes only whether
occupied by one family or a number of
families. Counsel say that the words
were intended to describe a type of
building. We think not. The word 'resi-
dence' has reference to the use or mode
of occupancy to which the building may be
put. If it had been intended that the
building was to be for the use of one
family only, words indicating such an
intention would have been used, as is
frequently done, such as 'a single resi-
dence,' 'a private residence,' 'a single
dwelling house.'"
Under the authority of the Ohio case, we could hold that
"residential use" clearly allows for multi-family. However,
after carefully reviewing the record in this case, we are
convinced that there is a genuine factual controversy over
what the parties intended by use of the subject language.
The agreement on non-conforming use is confusing. At
one point, the agreement recites that the three tracts in
question were zoned R-9600, a residential classification for
single-family. In fact, only one tract was so zoned. The
tria.1 court reasoned that since the parties to the agreement
believed all three tracts were limited to single-family and
existing non-conforming uses, and since zoning limitations
could not be changed by contract, then surely the itemized
uses must have contemplated only existing uses. Perhaps that
is true. But again, there is a fact question about what was
intended. The parties may have intended to assure additional
future uses in return for a.greeing to annexation. They may
not have fully understood the limitations on contract zoning.
Surely, they must have intended to receive some consideration
for not protesting annexation. These questions must be
resolved by the trier of fact.
The trial court also must have found the agreement
unclear on its face. After examining intent and going out-
side the four corners of the instrument by referencing an
affidavit, the court said: "The intent of the parties when
the agreement is entered into is controlling."
Intent is only looked to when the agreement is not clear
on its face. The court may have properly concluded the
intent issue but that issue is one of fact and cannot be
decided on summary judgment.
We, therefore, vacate the judgment and remand for trial.
W e concur:
?&.-4 4- +=-QQ
Chief JusticeL, "
Justices
Mr. Justice L. C. Gulbrandson, dissenting.
I respectfully dissent.
The agreement is question was titled "Waiver of Right
to Protest Annexation and Agreement - - Conforming -
on Non Use,"
and contained the following language, in addition to that set
forth in the majority opinion:
"WHEREAS, the area immediately
-
surroundins the above-described tracts
- the - residential - zoning
and
~6900,
tracts themselves are zoned
a
classificati%n;
"WHEREAS, the above described tracts have
historically - - currently being used
and are
for- aqricultural use;
- an -
"WHEREAS, - - - being - -of the
the use now made -
above-described tracts -
is -
a.
non-conforming -
use;
"WHEREAS, the City of Billings is
desirous of annexing said tracts on the
conditions stated; and
"WHEREAS, the Owners of said tracts are
willing to waive any rights to protest
said annexation on condition of obtaining
a more certain land use classification."
(Emphasis added. )
Section 28-3-201, MCA, provides as follows:
"A contract must receive such an
interpretation a s w i l -make it lawfur
--l -
operative, definite, reasonable, and
capable of being carried into effect if
it can be done without violating the
intention of the parties. (Emphasis
added. )
The parcel of land contained in Certificate of Survey
No. 334, located within the City of Billings and having been
zoned R-9600 long before the date of the agreement, but
hearing a non-residential non-conforming use could not
legally be the subject of an agreement whereby the City would
agree to grant a residential multi-family use variance. Such
an agreement, in my view, would constitute contract zoning.
In 82 Am. Jur. 2d, Zoning and Planninq, Section 17, the
aversion to "contract zoning" is expla.ined:
"When zoning power is delegated to a
municipality, it is not contemplated that
the municipality will ba.rqain away any
part of that power to any private
landowner. A contract made by the-zoning
authorities to zone or rezone for the
benefit of a private landowner is illegal
and is denounced 9 the courts a s
-'contract zoning' - -s a n ultra vir=
and a -
bargaininq away - - police power. It
of the
- reasoned that zonin9 restrictions and
is
- -be governed solely &
must
interest, - -
and not -
thea
an individual a~~licant."
L L
( ~ m ~ h a sadded. )
is
The agreement itself recognizes the status and zoning
of the land described in Certificate of Survey No. 334. The
City of Billings had police power over that specific parcel
and could not bargain such power away for the benefit of a
private landowner.
It is for that reason that I believe the majority to be
in error when they state: "The parties may have intended to
assure additional future uses in return for agreeing to
annexation." In my view, such an additional future
residential use would constitute illegal contract zoning.
I also believe the majority to be in error when they
state: "Surely, they must have intended to receive some
consideration for not protesting annexation. These questions
must be resolved by the trier of fact." The plaintiff
clearly received something he had not had prior to the
agreement, specifically:
(a) a written agreement that the non-conforming
commercial uses on parcel 334, zoned singl-e family
residential, could continue and in fact be expanded within
specified limits;
(b) a written agreement that these same non-conforming
uses would be granted for the remaining two tracts after
annexation; and
(c) a written agreement that the plaintiff would have a
discontinuance of use period of three years, rather than the
normal one year period.
District Judge Luedke recognized that interpreting the
agreement as requested by the plaintiff would render the
agreement illegal by stating in his memorandum:
"However, the overriding message which
the terms of the agreement contains, when
all term are considered together, is that
the then-existing non-conforming uses
were to be protected. The totality of
such agreement does not support the
position of plaintiff that use of the
language, 'residential uses,' authorizes
the establishment of new or different
non-conforming uses. If it did, there
would be a problem with respect to the
defense of the City as to contract
zoning. I
'
District Judge Luedke interpreted the agreement as referring
to non-conforming uses which existed at the time the
agreement was executed, the only interpretation which could
make the agreement lawful as required by section 28-3-201,
MCA .
Finally, the majority opinion suggests that the trial
court went outside the agreement when the trial court stated:
"The intent of the parties when the agreement is entered into
controlling."
That statement was actually made in the trial court's
second memorandum explaining its later order qrantinq the
plaintiff's motion to amend findings to state that the other
two parcels were in fact zoned a.gricultural open space on the
date of the agreement, and denying plaintiff's motion to
amend the judgment.
The pertinent portion of the trial court's second
memorandum explaining that order is as follows:
"Regardless of the actual zoning of the
property on the date of the 1978
agreement, the parties to the agreement
operated under the assumption that the
tracts were zoned R-9600. The agreement
makes this clear. The following
statement appears on Page 1 of the
agreement:
"'WHEREAS, the area immediately
surrounding the above-described tracts
and the tracts themselves are zoned
R-9600, a residential zoning
classification [ .I '
"A reading of the agreement reveals that
the parties were operating under the
assumption that the uses listed in the
agreement were at that time
non-conforming ones. The tenor and
purpose of the agreement is clear--the
parties were attempting to insure that
the uses then being made of the property
would continue following annexation by
the City. The fact that the parties
mistakenly believed that the parcels were
zoned R-9600 does not change the judgment
of the Court. The intent of the parties
when the agreement was entered into is
controlling."
I would affirm the judgment of the trial '