No. 93-398
IN THE SUPREME COURT OF THE STATE OF MONTANA
CITY OF BOZEMAN, MONTANA, a Municipal
corporation, acting on behalf of the
DEPARTMENT OF TRANSPORTATION OF THE
STATE OF MONTANA,
Plaintiffs and Respondents,
DONALD D. VANIMAN and CECILIA R.
VANIMAN, Co-Trustees of Steelhead
Ranches, a Trust,
Defendants and Appellants.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Larry W. Moran, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Michael G. Garrity, Kirwan & Barrett, P.C., Bozeman,
Montana
For Respondent:
Peter S. Lineberger, Lineberger, Walsh & McKenna,
P.C., Bozeman, Montana
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Submitted on Briefs: December 2, 1993
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Decided: March 1, 1994
Filed:
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Chief Justice J. A. Turnage delivered the Opinion of the Court.
Defendants Donald D. and Cecilia R. Vaniman appeal from an
order of the ~ighteenthJudicial District Court, Gallatin County,
which issued preliminary condemnation against the Vanimans'
property. We reverse and remand.
We rephrase the issue on appeal as follows: Whether the
District Court erred by issuing the preliminary condemnation order
condemning appellants' property for construction, reconstruction,
maintenance and operation of an off-ramp to the eastbound lane of
Interstate 90, a controlled-access highway, and for an adjoining
rest area and visitor center facility on the property line
southwest of the off-ramp, after concluding that the City of
Bozeman Chamber of Commerce's intended use and operation of the
proposed rest area and visitor center as a corporate headquarters
was not specifically before the court at the preliminary condemna-
tion hearing.
Pursuant to contractual agreement, the City of Bozeman (City)
is assisting the State of Montana, Department of Transportation
(State), in this action (the City and State are hereinafter
occasionally referred to as the respondents). The respondents
sought condemnation of the Vanimans' 8.712 acre parcel of property
to build a rest area and visitor center located along Interstate 90
near Bozeman, Montana. They chose the Vanimans' property after
considering, among other things, traffic and safety matters; the
site will rest in the middle of the longest stretch of interstate
highway in Montana which currently does not have a rest area.
The project is known to the respondents as the North 19th
Avenue Interchange project. It is a demonstration project, where
federal, state and city funds have been commingled to fund
construction. The total cost of the project is estimated at
$14,000,000.
The City conferred with the City of Bozeman Chamber of
Commerce (Chamber), an incorporated entity which serves the
interests of Bozeman area businesses, about the possibility of the
Chamber relocating its corporate headquarters at the proposed rest
area and visitor center. According to records and testimony
concerning their discussions, the Chamber would pay approximately
$200,000 for the construction of its allocated corporate office
space at the visitor center, staff the center and maintain the rest
area grounds. Approximately 2,000 square feet of the 7,080 total
square feet in the visitor center would be used to house Chamber
corporate offices.
The City and the Chamber have not reduced any of their
negotiations to a formal contract. State and federal authorities,
however, have informed the City that federal funds are not
available to fund the construction of any proposed Chamber offices.
To further the construction process, respondents submitted a
written offer to purchase the Vanimans' property, which the
Vanimans rejected. The State thereafter adopted a condemnation
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order against the Vanimansl property on March 24, 1993. At a
preliminary condemnation hearing, the District Court confirmed the
State's condemnation. The Vanimans appeal.
Did the District Court err by issuing the preliminary
condemnation order condemning appellants' property for construc-
tion, reconstruction, maintenance and operation of an off-ramp to
the eastbound lane of Interstate 90, a controlled-access highway,
and for an adjoining rest area and visitor center facility on the
property line southwest of the off-ramp, after concluding that the
City of Bozeman Chamber of Commercels intended use and operation of
the proposed rest area and visitor center as a corporate headquar-
ters was not specifically before the court at the preliminary
condemnation hearing?
The legislature's grant of the eminent domain power to
governmental bodies must be strictly construed. State v. Aitchison
(1934), 96 Mont. 335, 30 P.2d 805. Private real property ownership
is a fundamental right, Art. 11, 5 3, Mont.Const, and any statute
which allows the government to take a person's property must be
given its plain interpretation, favoring the person's fundamental
rights. See S 1-2-101, MCA; see also 5 1-2-104, MCA.
Eminent domain is the State's right to take private property
for public use. Section 70-30-101, MCA; Art. 11, 5 29, Mont-Const.
The due process rights of the party whose property is taken for
public use are protected by statutes providing the procedures for
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eminent domain and by the constitutional provision for just
compensation. Montana Talc Co. v. Cyprus Mines Corp. (1987), 229
Mont. 491, 748 P.2d 444.
The condemnor must initially establish facts indicating that
the taking is necessary. Once sufficient evidence has been
established, the person seeking to show that the taking is
excessive or arbitrary has the burden of proof in a condemnation
action appeal. Lincoln/Lewis & Clark County Sewer Dist. v. Bossinq
(1985), 215 Mont. 235, 696 P.2d 989. The court may be called upon
to decide whether the condemnation taking is for public use,
whether public interests require the taking, and whether the use is
necessary and authorized by law. See 5 70-30-111, MCA; Bossinq,
696 P.2d at 991; see also Montana Power Company v. Bokma (1969),
153 Mont. 390, 397, 457 P.2d 769, 774.
During the trial court's review, it must make findings
regarding the necessity of the taking. See Bossinq, 696 P.2d at
991. Generally, where the legislature has granted the government
the power of determining the necessity to exercise eminent domain,
the government's finding of necessity is a political decision which
will not be overturned by the court absent proof of arbitrariness
by clear and convincing evidence. Montana Power Company v. Fondren
(1987), 226 Mont. 500, 737 P.2d 1138.
On appeal before this Court, the District Court's findings of
fact are subject to the clearly erroneous standard of review.
Steer, Inc. v. Dep't of Revenue (1990), 245 Mont. 470, 474-75, 803
5
P.2d 601, 603. This Court has specifically adopted a three-part
test to determine whether findings are clearly erroneous: first,
the Court determines whether the findings are supported by the
record; second, the Court determines whether the trial court has
misapprehended the effect of the evidence; and third, if the
finding in question is supported by the record, the Court considers
whether a mistake has been made. Interstate Prod. Credit Ass'n v.
DeSaye (1991), 250 Mont. 320, 820 P.2d 1285. Additionally, we
review the court's conclusions of law to determine whether the
conclusions are correct. Steer, Inc., 601 P.2d at 603.
The rest area and visitor center use of the Vanimansl property
is authorized by law as a public use. See 5 5 60-1-102, 60-3-101,
60-4-103 ( 4 ) , 70-30-102 (1) and (2), 70-30-110 and 70-30-111, MCA; 23
CFR Ch.1, 5 3 752.7, 752.8, 752.11. Indeed, the record discloses
that Cecilia Vaniman acknowledged the State's authority to condemn
the entire 8.712 acre parcel of property for the purpose of
constructing a rest area and visitor center:
Q. As I understand it, you [Cecilia Vaniman] do not
contest the authority of the State of Montana to condemn
property for rest areas and informational sites, is that
correct?
A. That's correct.
Q. So the only contest here has to do with the fact
that the City and the chamber have been talking about
putting their corporate offices there, is that correct?
A. That's correct.
Q. Okay. You understand, don't you, from [the archi-
tect's] testimony Friday, that if the rest area were put
in this same location next to [the highway off-ramp], it
would still require the total taking, is that correct?
A. That's my understanding of their design, yes.
Q. Okay. So the fact that the chamber offices are in
there actually has no effect on your interest in the
property. If they took the chamber office out but still
put the rest area there, you would have no objection,
correct?
A. It's my understanding that it wouldn't make any
difference.
Q. My question is, if there were no chamber office
there, then from what you just said, you wouldn't object
to the placing of the rest area there?
A. That's correct.
Q. And if it had an informational site but no offices,
you wouldn't object, is that correct?
A. That's correct.
The record also discloses that the District Court acknowledged
the State's authority to condemn the Vanimans' property, but had
reservations about the validity of the Chamber's involvement in the
project:
[The court's] question is this: We are contemplating a
total taking here, in any event. The issue seems to
narrow itself down to whether or not out of the 7,000
square feet of the visitor center it's going to be
permissible to have 2,000 square feet of that utilized by
the chamber of commerce. That has no effect, if I recall
a question I made of a witness, on the taking. They're
going to take it regardless. Query: Do I have to rule
on the validity of the use of that 2,000 square feet by
the chamber of commerce?
In its findings of fact the court noted:
5. Plaintiffs contemplate that the Bozeman Area Chamber
of Commerce, a private, non-profit corporation will
occupy a portion of the information/visitor center
building . ... In addition, there has been discussion
between the City of Bozeman, and the Chamber of Commerce
concerning devoting about thirty percent (30%) of the
area of the building constructed for the information/
visitor center for utilization by the Chamber for its
corporate offices--in return for which the Chamber will
pay the City the sum of $200,000.00, and provide staffing
for the information/visitor center.
The State of Montana has informed the City of
Bozemanthat Federal Department of Transportation funding
for the project cannot be used to fund the corporate
offices of the Chamber of Commerce. Section 70-3-111
M.C.A. generally requires that property may be condemned
only in the public interest, for public purposes.
Section 60-5-110 M.C.A. specifically provides that, with
the exception of motorist information signs, no commer-
cial enterprise or structure shall be constructed or
operated on the publicly owned right-of-way of a con-
trolled access highway or facility.
In its conclusions of law, the court deferred judgment on the
question of whether the Chamber, in agreement with the City,
intends to occupy a portion of the visitor center:
9. The use and operation of a portion of the informa-
tion/visitor center site by the Bozeman Chamber of
Commerce for its corporate offices is not specifically
before the Court in this proceeding. There is no
contract between the Plaintiffs and the Chamber, and for
the Court to rule on the validity of such arrangement, it
would necessarily have to base its ruling on conjecture,
and not being so disposed, the Court refuses to rule on
the issue.
Concomitant with the above finding and conclusion, several
pieces of evidence contained in the record prove the existence of
the City of Bozeman and the Chamber's intent to enter into an
agreement to locate the Chamber's corporate offices at the proposed
rest area and visitor center:
- the Chamber's Articles of Incorporation document, filed
with the Secretary of State, which sets forth the
commercial activity of the Chamber.
- a copy of the Chamber's annual report, containing a
Bozeman Daily Chronicle news item which refers to the
visitor center Chamber office.
- a January 10, 1992 letter from the City of Bozeman
Public Service Director to the Chamber, clearly specify-
ing the plan to utilize a portion of the visitor center
structure for Chamber offices.
- an April 1, 1992 letter from the Chamber president to
the City manager which states the Chamber is "committed
to go ahead with the visitor's center/chamber office
project .... II
- a March 10, 1993 #'Memo of Understanding" between the
City of Bozeman and the Chamber setting forth additional
City/Chamber agreements, including a fifty-year lease
(for one dollar per year) of the Chamber portion of the
visitor center, and the agreement that the Chamber will
pay $200,000 toward that portion of the visitor center to
be utilized for its offices.
- the direct testimony of the Chamber's Chairman, stating
that the Chamber has negotiated a buy/sell agreement to
sell its current office space, and that the closing is
contingent upon the Chamber relocating in the visitor
center.
We hold that it was error for the District Court to fail to
consider this evidence when determining whether the respondents
validly exercised their eminent domain power over the Vanimans'
property. The court, in so doing, violated the Vanimans' due
process rights. We therefore reverse the court's preliminary
condemnation order and conclusions of law as they relate to the
Chamber's participation in the North 19th Avenue Interchange
Project and remand the case for proceedings consistent with this
opinion, specifically to determine whether the Chamber's involve-
ment is de minimis.
Reversed and remanded.
Chief Justice
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We concur:
March 1, 1994
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
Michael G. Garrity, Esq.
Kinvan & Barrett, P.C.
P.O. Box 1348
Bozeman, MT 59771-1348
Peter S. Lieberger, Esq.
Lieberger, Walsh & McKenna, P.C.
P.O. Box 6400
Bozeman, MT 59771-6400
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA