No. 92-153
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
ROBERT J. SCHELLIN, ELDON GILMORE,
EUGENE MONSON, and LAWRENCE SIEMENS,
. .. .
.. .
Petitioners and Respondents,
-v-
NORTH CHINOOK IRRIGATION ASSOCIATION,
a corporation registered in Montana,
Respondent and Appellant.
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APPEAL FROM: District Court of the Seventeenth Judicial District,
In and for the County of Blaine,
The Honorable Leonard Langen, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Thomas J. Sheehy, Big Sandy, Montana; Russ McElyea,
Moore, OfConnell,Refling & Manos, Bozeman, Montana
For Respondent:
Sarah Arnott Ozment, Livingston, Montana
Submitted on Briefs: December 10, 1992
Decided: March 10, 1993
Filed:
dlerk
Justice R. C McDonough delivered the Opinion of the Court.
.
The North Chinook Irrigation Association appeals from an order
of the District Court forthe Seventeenth Judicial District, Blaine
County, concerning the use of water from Lodge Creek, north of
Chinook, Montana. We vacate the District Court's order and remand
for further proceedings consistent with this opinion.
We conclude that the District Judge should have recused
himself after participating in negotiations between the parties.
Because we vacate the court's order on that basis, we do not
consider the other issues raised on appeal.
North Chinook Irrigation Association is a corporation held by
farmers and ranchers who use water from Lodge Creek, in north-
central Montana. The Association maintains a dam across the creek
approximately twenty-six miles north of Chinook, Montana. Head-
gates above the dam direct water down a canal to the Association's
off-stream reservoir about six miles to the east.
Petitioners Robert J. Schellin, Eldon Gilmore, Eugene Monson,
and Lawrence Siemens are farmers and ranchers who are not
Association members and whose property lies along Lodge Creek at
and downstream from the Association's dam. They brought this
action in 1987, seeking an injunction preventing the Association
from continuing to operate its dam and canal. They also sought
transfer of this controversy to the Water Court pursuant to 5 85-2-
216, MCA, so that the parties' water rights could be adjudicated
and a water commissioner could be appointed to administer the
resulting decree.
2
The case was transferred from the District Court to the Water
court. In 1990, the Water Court transferred it back to District
Court "for interim settlement ofthe water distribution controversy
until such time as the Montana Water Court's general adjudication
is undertaken for the waters of Lodge Creek, a tributary of the
Milk River Basin (40J)." The Water Court ruled that under 5 85-2-
406, MCA, the District Court is the proper forum for this matter
because it is a water distribution controversy. This Court denied
the petitioners' request for supervisory control on that ruling.
Just before a scheduled October 10, 1991 District Court
hearing on the petitioners' motion for a preliminary injunction,
the parties' attorneys and the District Judge inspected the
Association's dam and canal. At the court's suggestion, settlement
meetings between the parties were commenced that evening. As the
court pointed out, any decision it would reach would only be
temporary, until the Water Court determines water rights.
After negotiations continued for most of the next day, the
court announced, over objections by the Association, that a
settlement had been reached. The court caused a partial record to
be made of the settlement discussions. Working from its
understanding of the settlement discussions and from the
transcript, on March 13, 1992, the court issued a final order
together with a memorandum opinion and findings of fact which
purported to memorialize the agreement reached by the parties. The
Association appeals.
Should the District Judge have recused himself after
participating in negotiations between the parties?
In Shields v. Thunem (l986), 220 Mont. 449, 452, 716 P.2d 217,
219, this Court concluded that
where a judge is to be the trier of fact, and he
participates in pre-trial settlement negotiations which
subsequently fail, he should, upon request, disqualify
himself from sitting as the trial judge.
In reaching that conclusion, this Court cited with approval cases
from several other jurisdictions. As discussed in the quotations
from those cases, the aim is to eliminate any impression of impro-
priety or bias on the part of the trial judge resulting from parti-
cipation in pretrial negotiations. Shields, 716 P.2d at 218-19.
The petitioners attempt to minimize the extent of the District
Judge's participation in the settlement negotiations in this case.
They state that he was not demanding in his suggestion that the
parties attempt settlement, that he did not actively participate in
or control the direction of negotiations between the parties, and
that he did not order counsel to refrain from advising their
clients during the negotiation process.
This Court's review of the record, however, leaves us with the
firm impression that the District Judge was a participant in the
settlement negotiations. He "really strongly recommend[ed]" that
the parties "get this case settled." He offered to give advice if
impasses were reached in negotiations. He made suggestions
concerning use of a headgate, employment of a contractor to do dirt
work on a ditch, and sharing of the cost of the transcript. He
suggested a clause in the settlement agreement limiting its purpose
and dictated settlement terms under which the Association could
spray on petitioner Schellin's land. Finally, he took it upon
himself to reduce the claimed settlement agreement to writing.
The settlement discussions between the parties occurred on
October 10 and 11, 1991. No written agreement was immediately
composed. On October 16, 1991, the Association moved that the
District Judge be disqualified for cause. It also moved that the
temporary restraining order be continued and that its application
for a preliminary injunction be set for hearing. The court issued
an order denying the motion for disqualification. Six months
later, the court entered its final order and memorandum opinion
memorializing the claimed settlement.
The petitioners reason that Shields does not apply because
settlement negotiations did not fail in this case. We do not
agree. When the Association made its October 16, 1991 motions, it
was clear there was a serious question about the success of the
pre-trial settlement negotiations in which the court had
participated. We approve of the judge's attempts to mediate and to
have the parties reach an interim settlement of a complex
controversy. We hold, however, that pursuant to our opinion in
Shields, the Association's objections and the October 16, 1991
motions required the District Judge to disqualify himself.
We vacate the District Court's final order and memorandum
opinion and findings of fact, and remand this case for further
proceedings before a new district judge to determine whether the
agreement obtained between the parties is binding, and for such
other proceedings that may come before the court in this cause.
We Concur:
i Chief Justi