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.