No. 89-145
IN THE SUPREME COURT OF THE STATE OF MONTANA
BURK RANCHES, INC., A Montana corp.,
Plaintiff and Respondent,
-vs-
STATE OF MONTANA and STATE OF MONTANA
FOR STATE FISH AND GAME COMMISSION,
Defendants and Third-Party Plaintiffs
and Appellants,
-vs-
JOHN W. RIEBER, JR., GUY HOLT, MACK POOLE
and LARRY BRADLEY,
Third-Party Defendants and Respondents.
and
JOHN W. RIEBER, MICHELE RIEBER and RIEBER RANCH,
A Montana corp.,
Plaintiffs and Respondents,
-vs-
STATE OF MONTANA; and DEPARTMENT OF FISH, WILDLIFE
AND PARKS,
Defendants, Third-Party Plaintiffs and
Appellants,
-vs-
GUY HOLT, MACK POOLE, and LARRY BRADLEY,
Third-Party Defendants and Respondents.
APPEAL FROM: District Court of the Fifth Judicial District,
In and for the County of Beaverhead,
The Honorable Frank Davis, Judge presiding.
COUNSEL OF RECORD:
For Appellant (s):
R. Scott Currey, Agency Legal Services, Helena,
Montana
For Respondent (s):
C? 1 Donald Robinson; Poore, Roth & Robinson, Butte,
C'J . . ' Montana
(-- -4 Steve Reida; Landoe, Brown, Planalp & Kommers,
c Bozeman, Montana
c-3 0
L. :
-.
-- CT) - .
L- . -
c- : . Submitted: October 17, 1989
i,
-.
.. - 1
~3
' *
)2
.- Decided: March 9, 1990
~i@d:
\
-
1;
Clerk
Chief Justice J. A. Turnage delivered the Opinion of the Court.
The State of Montana appeals from a negligence action in the
District Court of the Fifth Judicial District, Beaverhead County,
arising out of the collapse of the Brownes Lake Dam. The District
Court held all parties liable as a matter of law, and the jury
apportioned 100% of the liability to the State and awarded actual
and future damages to downstream ranchers.
We reverse and remand.
ISSUES
The State of Montana raises the following issues on appeal:
1. Whether the District Court erred in not dismissing
plaintiff Rieber's claim for future damages resulting from his loss
of irrigation capacity.
2. Whether in apportioning no negligence to the plaintiff and
third-party defendants the jury disregarded the District Court's
instructions that all parties were liable.
3. Whether the jury's award of future damages to the
plaintiff for lost hay crops, decreased capital value, and
increased pasture expenses was excessive as triple compensation for
the same injury.
FACTS
Sometime prior to 1894, Joseph Browne constructed the Brownes
Lake Dam on his patented mining claim near Glenn, Montana.
Designed to store irrigation water from Rock Creek, the dam raised
the natural level of Brownes Lake by eight feet. In 1923, the
Beaverhead County District Court apportioned the water rights to
Rock Creek and enjoined all parties and successors owning ditch,
water, or reservoir rights, or any interest therein, from interfer-
ing with the irrigation system. Wood Livestock Co. v. Jensen (5th
D. Mont. April 25, 1923).
In 1963 the State of Montana purchased the lake and surround-
ing land as a recreational site under the control of the State Fish
and Game Commission (presently known as the Department of Fish,
Wildlife and Parks). The State has filed an as yet unadjudicated
claim to a nonconsumptive, recreational, water right. Other water
rights holders include John W. Rieber, Guy Holt, Mack Poole, and
Larry Bradley [hereinafter water users], the present successors in
interest to the parties subject to the 1923 decree. During the
State's ownership of the dam, the water users maintained exclusive
control of the headgate on Brownes Lake Dam regulating water flow
to irrigate their ranches.
Both the State and the water users were aware that the dam was
unstable. The State first noted that the dam was old and seeping
water in May of 1976. In 1979, the United States Forest Service
and the Montana Department of Natural Resources and Conservation
inspected the dam and informed the State that it was hazardous.
The Forest Service felt that its deteriorating condition could lead
to a collapse which would damage public and private land and
RIEBER'S FUTURE DAMAGES
The parties stipulated that Rieber's past special damages
totaled $8,998 and the jury found $55,000 in general damages and
$155,480 in future special damages. The State contests only the
latter award which included damages for decreased capital value,
thirty years of loss of hay crops, ten years of increased irriqa-
tion labor costs, and thirty years of increased pasturage expenses,
all resulting from Rieber's lost irrigation capacity.
The State argues that, although there is no on-point Montana
law, the majority of jurisdictions hold that a landowner has no
duty to maintain an artificial impoundment for the benefit of other
water users absent a statute or covenant to the contrary. See A.
Tarlock, Law of Water Rights and Resources, 5 3.08(1)-(3) (1989).
The State also argues that it was not a successor to water rights
created by the 1923 apportionment and, therefore, was not enjoined
by the 1923 decree from destroying the dam, or allowing its
destruction. Since the State had no duty to maintain the dam for
irrigation purposes, it asserts that it is not liable for damages
arising from Rieber's lost irrigation capacity.
Who is liable for the maintenance of artificial impoundments
is an important question that will undoubtedly arise again as
Montana's reservoirs continue to age. That, however, is not the
present question. The State's argument attempts to correlate
specific types of duties with liability for specific types of
possibly cause loss of life. In the winter of 1979-80 the State
met with some of the water users informing them of the condition
of the dam. The State told the water users that they could either
take responsibility for maintaining the dam or the State would
breach it the following spring. No action was taken by either
party. In April of 1981, the Army Corps of Engineers again
informed the State that inspection showed the dam to be in poor
condition. Three years later, the dam collapsed damaging the
property of downstream ranchers and eliminating the storage system.
Burk Ranches, Inc., which did not use the irrigation system,
filed suit against the State for damage caused by the dam's
outwash. Water user Rieber filed against the State for outwash
damage and loss of irrigation capacity. In both cases the State
joined the nonparty water users as third-party defendants. The
State settled with Burk Ranches for $134,000, but retained its
action for contribution against the water users.
Prior to trial, the State admitted liability and the District
Court entered summary judgment holding the State and water users
jointly and severally liable because they both had a duty to
maintain the dam. The court joined the two actions for trial in
which the jury was to determine Rieber's damages and to apportion
damages between the State and the water users. The jury returned
a verdict of $219,478 for Rieber and found the State 100% liable.
The State now appeals both decisions.
damages. The State asserts that it is not liable for loss of
irrigation since it had no duty to maintain the dam for irrigation
purposes. While this duties-and-damages correlation had meager
support at one time, it has been uniformly rejected in modern tort
law. W. Keeton, Prosser and Keeton on Torts, 5 43 at 289-90 (5th
ed. 1984) ; Restatement (Second) of Torts 5 281, comment j (1965).
Montana law provides that tortfeasors are liable for all
damages caused in fact and proximately caused by their negligence,
5 27-1-317, MCA, including reasonably certain future damages, 5 27-
1-203, MCA. The State admitted liability for the collapse of the
dam apparently relying on a landowner's duty to warn about, and
make safe, hazardous conditions. See Restatement (Second) of Torts
§§ 364, 370 (1965). As the State itself argues, a finding of
liability includes causation-in-fact and proximate causation. The
State, therefore, is liable for Rieberts reasonably certain future
damages as determined by the jury's apportionment of negligence,
see 5 27-1-703, MCA, regardless of what type of duty it owed. The
future damages awarded by the jury, however, were not reasonably
certain and did not comply with the appropriate measure of damages.
Although no single measure of damages can serve in every case
to adequately compensate an injured party, the general rule in
Montana is that the measure of damages for permanent injuries to
real property is the difference between the value of the property
before and after the injury.' Watson v. Colusa-Parrot Mining &
Smelting Co. (1905), 31 Mont. 513, 518, 79 P. 14, 15; see also
Kebschull v. Nott (1986), 220 Mont. 64, 67, 714 P.2d 993, 995.
This measure of damages avoids problems of double and speculative
damages as is amply illustrated by Rieberls award of damages for
both lost irrigation and decreased capital value.
Earl Love gave most of the damages evidence. As the former
district conservationist for the Dillon Soil Conservation Service,
Love was familiar with the Rieber ranching operation before the dam
collapsed. After the collapse he was hired to monitor and analyze
the impact of the lost irrigation capacity on the Rieber ranch.
He gave the jury his opinion of the ranch's decreased capital value
based on lost hay production, lost aftermath grazing, and increased
pasturage fees.
Love's opinion demonstrates that the award constitutes double
damages for the same injury. When the landholder recovers damages
based on the decreased value of ranch and farm property, damages
for lost crops constitute double damages and are not recoverable.
Wheatland Irrigation Dist. v. McGuire (Wyo. 1977), 562 P.2d 287,
298 ; Manning v. Woodlawn Cemetery Corp. (Mass. 1921) , 131 N.E . 287,
288; Kugel v. Village of Brookfield (Ill. App. 1944), 54 N.E. 2d 92,
96. Love's valuation of the property after injury necessarily took
his is also the universal rule in other jurisdictions. See
22 Am.Jur.2d1 Damaqes 5 405 at n.19 (1988).
into account the inability of the land to produce at pre-injury
levels. Loss of use is an appropriate factor to be considered in
determining decreased value; it is not a separately compensable
item of damages.
The evidence also demonstrates that the damages failed to
satisfy the statutory requirement of reasonable certainty. See 5
27-1-203, MCA. The damages for thirty years of lost hay crops and
for thirty years increased pasturage expenses were excessively
speculative. Love testified that he chose the thirty-year period
on the assumption that the thirty-five-year-old Rieber would retire
at age sixty-five. He correctly noted that the losses would
actually go on forever.
Permanent injuries to real property generate damages which
extend indefinitely into the future defying formulation of any
reasonably certain basis for evaluation. Claiming future damages
for only a specified number of years provides only a cosmetic
solution to the problem. The record does not indicate that
Rieberls hay crops and pasturage will return to pre-injury levels
on the thirty-first year after the collapse of the Brownes Lake
Dam. They may be restored at an earlier date, or they may never
be restored. Even if Rieber retires at age sixty-five, the injury
will probably continue in his successor.
Love's testimony on the ranch's decreased capital value also
produced excessively speculative damages. We have held in a number
of cases that the jury may base future damages on expert testimony
which necessarily includes some degree of conjecture and specula-
tion. Stark v. Circle K Corp. (1988), 230 Mont. 468, 478, 751 P.2d
162, 168; Graham v. Clarks Fork Nat'l Bank (Mont. 1981), 631 P.2d
718, 720, 38 St.Rep. 1140, 1143; Frisnegger v. Gibson (1979), 183
Mont. 57, 71, 598 P.2d 574, 582. However, we have also consistent-
ly reiterated the statutory requirement that future damages must
be reasonably certain. This imperative requires the parties to lay
before the jury the most reliable type of evidence available for
the particular type of injury. With some types of injury, some
conjecture and speculation is unavoidable. Uncertainty, however,
can be minimized in evidence of property damages. In the case of
permanent injuries to real property, evidence based on the
appraised value of the property before and after the injury, or an
equally reliable method of valuation, ensures reasonable certainty.
Whether an injury is permanent or temporary is a question for
the jury. Rempfer v. Deerfield Packing Corp. (N.J. 1950), 72 A.2d
204, 209; Benton Gravel Co. v. Wright (Ark. 1943), 175 S.W.2d 208,
210. In distinguishing between permanent and temporary injuries,
[a] permanent injury to real property .. . is
one of such a character and existing under
such circumstances that it will be presumed to
continue indefinitely. A temporary or con-
tinuing injury is one that may be abated or
discontinued at any time, either by the act of
the wrongdoer, or by the injured party.
Worden v. Bielenberg (Minn. 1912), 138 N.W. 314, 315; see also
Gross v. Connecticut Mut. Life Ins. Co. (S.D. 1985), 361 N.W. 2d
259, 272.2
The ability to repair the injury must, however, be more than
a theoretical possibility; it must be an actual possibility within
reasonable capabilities of the parties. Even though repair is
theoretically possible, if the cost of repair greatly exceeds the
decreased value of the property, the injury is presumptively
permanent3 and the decreased value rule applies. United States
Steel Corp. v. Benefield (Fla. App. 1977), 352 So.2d 892, 894,
cert. den. (Fla.) 364 So.2d 881; see also Kebschull, 220 Mont. at
66, 714 P.2d at 994. To hold otherwise would allow repair and
replacement damages which might far exceed any benefit regained.
As in this case, the cost of replacing and maintaining Brownes Lake
Dam may well exceed the reasonable cost of lost crops and pasturage
for the foreseeable future. It may even exceed the value of the
ranch itself. The disparity would encourage the injured party to
2ff~ermanentinjuryv1has at least two meanings. In the present
context it refers to whether the injury can be repaired. In the
context of the statute of limitations, Ifpermanent injuryn refers
to whether the injury has stabilized enough that the extent of the
damage has become reasonably certain. Haugen Trust v. Warner
(1983), 204 Mont. 508, 513, 665 P.2d 1132, 1135. Use of the term
in the present discussion does not alter its definition under the
statute of limitations.
3 ~ h presumption of permanence is only a presumption. It can
e
be overcome by statutory and common laws, such as environmental
laws, which compel repair or replacement.
forego actual repairs and reap a windfall profit contrary to the
purpose of compensatory damages.
The injured party is to be made as nearly
whole as possible--but not to realize a
profit. Compensatory damages are designed to
compensate the injured party for actual loss
or injury--no more, no less.
Spackman v. Ralph M. Parsons Co. (1966), 147 Mont. 500, 506, 414
P.2d 918, 921.
In summary, the measure of damages for permanent injury to
real property is the difference between the appraised value of the
property before and after the injury. An injury is permanent if
it will continue indefinitely. An injury is presumptively per-
manent when the cost of repair greatly exceeds the property's
decreased value. If the injury is temporary, the measure of
damages is the cost of repair plus damages for loss of use up to
the time when the injury reasonably could have been repaired. Bos
v. Dolajak (1975), 167 Mont. 1, 10, 534 P.2d 1258, 1262.
APPORTIONMENT OF LIABILITY
The State argues that by apportioning negligence at 100% for
the State and 0% for Rieber and the other water users, the jury
ignored the ~istrict Court's instruction that all parties were
liable. We agree that the jury ignored the instruction, but not
because it found the State responsible for all damages. The jury
understandably disregarded the liability instruction because it
received conflicting instructions requiring it to also find legal
causation.
Prior to trial, the District Court entered summary judgment
holding the State and water users jointly and severally liable.
The STATE has admitted liability. It now
claims that the water users are jointly and
severally liable. With this position, the
Court agrees; and finds that there are no
genuine issues of fact which would or could
result in a contrary finding. The water users
are jointly liable. Damages, if any, should
be properly apportioned between the joint
tortfeasors, commensurate with the degree of
their respective negligence.
Order and Findings of the District Court, March 18, 1988.
The District Court appropriately instructed the jury on its
finding of liability and the issues remaining for determination.
However, the court also inconsistently instructed the jury on legal
causation.
You are instructed that the doctrine of "com-
parative negligence1' is applicable to this
case. Further, you are advised that the State
has admitted liability and that the Court has
previously adjudged that all other parties,
including Rieber's [sic], are jointly and
severally liable to the extent of their re-
spective and apportioned negligence. You must
determine the degree of each party's negli-
gence and assess him the percentage of negli-
gence contributing as a lesal cause to the
damaqes and enter the percentage on the ap-
propriate line next to that party's name on
the verdict form.
Jury Instruction No. 12. (Emphasis added.)
Before you can apportion liability as to any
party, you must find that parties1 [sic]
negligence was a legal cause to some per-
centage of the damages.
Jury Instruction No. 20.
A legal cause of an injury is a cause which is
a substantial factor in bringing about the
injury.
Jury Instruction No. 11.
The verdict form contained the same inappropriate instruction.
We further find that the damages herein as-
sessed are apportioned in accordance with what
we find to be the comparative negligence
proximately causinq said damages as follows
....
Jury Verdict Form. (Emphasis added.)
A finding of liability includes a finding of every element
necessary to establish liability except those specifically reserved
by the judgment. In negligence, the essential elements of lia-
bility include duty, breach, cause-in-fact, proximate cause, and
damages. Thornock v. State (1987), 229 Mont. 67, 72, 745 P.2d 324,
327. Here, the summary judgment reserved only the amount and
apportionment of damages for the jury, but the court instructed the
jury that it had to find causation. We recognize that cause cannot
be split from effect; the cause of the damage and the amount of the
damage caused, are, in reality, different facets of the same
concept. However, by giving instructions on causation, the court
directed the jury to redetermine an issue already decided on
summary judgment. The court should have made the jury's duty less
ambiguous by instructing on the finding of liability and the
meaning of that finding; both parties had a duty to maintain the
dam, both breached their duty, and both were the actual and legal
causes of any resulting damages.
The jury's apportionment of 100% of the damages to the State
and 0% to the other parties is not an error per se. The apportion-
ment of liability is a duty reserved solely for the jury. Section
27-1-703(4), MCA. It is well within the authority of the trier of
fact to find that a defendant had a duty, breached it, and caused
injury to the plaintiff, and yet award no compensation when the
plaintiff failed to adequately prove damages. See Lenz Constr. Co.
v. Cameron (1984), 207 Mont. 506, 511-12, 674 P.2d 1101, 1104.
That possibility, however, is difficult to envision when the court
found on summary judgment that both had breached their concomitant
duty to maintain the dam.
CONCLUSION
The damages awarded in Rieber v. State of Montana were based
on an inappropriate measure of damages, speculative, and included
double compensation for the same injury. In apportioning the
percentage of negligence to the parties the jury relied on improper
instructions and inappropriately redecided the issue of causation.
We therefore reverse Rieber v. State of Montana, Cause No. 10612,
on the amount and apportionment of damages, including apportionment
on the State's contribution claim against the third-party defen-
dants. The case is remanded to the District Court for further
proceedings consistent with this opinion.
We also reverse and remand the District Court's summary
judgment on the State's contribution claim in Burk Ranches v. State
of Montana, Cause No. 10348. In that case, the State settled with
the plaintiff for $134,000 but retained an action for contribution
against the third-party defendant water users. The percentage of
the water users1 negligence in the collapse of the dam, and
therefore the percentage of their contribution in Burk Ranches,
became res judicata on the jury's apportionment of damages in
Rieber v. State. Following the Rieber jury's 0% apportionment to
the water users, the District Court entered summary judgment in
favor of the water users on the State's contribution claim in Burk
Ranches. Because the Rieber jury was improperly instructed on the
apportionment of damages, we hold that the summary judgment in Burk
Ranches v. State was also an error of law. The State's $134,000
settlement with plaintiff Burk Ranches stands.
\ "/ Chief Justice /f
We c o n c u r :
L