NO. 94-248
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
GARY KNUDSON, STAN SOLSVIK, GREG
COLVIN, SUE ANN LOVE, LARRY ANTONICH,
ADAM DAHLMAN and JASON RAMPTON,
Plaintiffs and Appellants,
.'\F'[f ;! tj 'y#j
v.
EUGENE AND LILA McDUNN,
Defendants and Respondents.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable John M. McCarvel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
K. Dale Schwanke, Jardine, Stephenson,
Blewett & Weaver, Great Falls, Montana
For Respondent:
E. Lee LeVeque, Conklin, Nybo,
LeVeque & Murphy, Great Falls, Montana
Submitted on Briefs: February 9, 1995
Decided: April 25, 1995
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Appellants Gary Knudson, Stan Solsvik, Greg Calvin, Sue Ann
Love, Larry Antonich, Adam Dahlman, and Jason Rampton appeal from
an order of the Eighth Judicial District Court, Cascade County,
terminating a temporary restraining order, denying appellants'
request for an injunction pendente lite, and awarding respondent's
costs and attorney fees. The District Court issued its order
following a show cause hearing on appellants' request for an
injunction pendente lite at which the District Court resolved
substantive issues without first obtaining respondents' answer to
appellants' complaint and without allowing for full discovery by
the parties.
We reverse and remand for further proceedings in accordance
with this opinion.
We frame the issues as follows:
1. Did the District Court err in reaching a final
determination on the merits at a show cause hearing for injunctive
relief before obtaining responsive pleadings and without allowing
for discovery?
2. Did the District Court err in awarding respondents'
attorney fees and costs?
Each appellant owns a lot in the Addition, a housing
development in Great Falls. Construction of new homes in the
Addition is subject to certain restrictions. Paragraph 3 of the
restrictions provides:
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That no building should be constructed or permitted on
any of the above described lots other than a one-story
building or a tri-level building, and if such building
shall be a tri-level design, due care shall be used in
the design and erection of said tri-level building in
order that the view of the surrounding territory may not
be blocked for other lot owners. Buildings having an
excess of one and one-half stories shall not be
permitted.
Respondents purchased a lot in the Addition with the intention
of building a home. They hired a Great Falls design and
construction company to build their home. Respondents and the
design company knew of the height restrictions contained in
paragraph three of the restrictions prior to beginning
construction.
In January 1994, after construction had begun on respondents'
home, appellants informed respondents that if constructed as
designed, their home would violate that portion of the restrictions
which limits homes to no more than tri-level construction, and that
portion of the restrictions which prohibits construction that
blocks the view of the surrounding territory.
In response to appellants' concerns, respondents voluntarily
ceased construction of their home and modified its design so that
the roof line that would be four to five feet lower than originally
planned. Appellants maintained that even with respondents'
proposed modifications, the finished home would exceed three levels
and would obstruct the view of the surrounding area. Having
reached an impasse in their discussions with appellants,
respondents resumed, and ultimately completed, construction of
their home.
On March 15, 1994, appellants filed a complaint seeking to
obtain an injunction prohibiting respondents from completing
construction. On March 17, 1994, the District Court issued a
temporary restraining order halting construction of respondents'
home. Respondents were ordered to appear on April 8, 1994, to show
cause why an injunction pendente lite should not issue. Without
waiting for responsive pleadings or discovery, the District Court,
on April 18, 1994, issued its findings of fact, conclusions of law,
and order terminating the temporary restraining order, denying
appellants' motion for an injunction pendente lite, and awarding
costs and attorney fees to respondents. It is from the District
Court's order that appellants appeal.
ISSUE 1
Did the District Court err in reaching a final determination
on the merits at a show cause hearing for injunctive relief before
obtaining responsive pleadings and without allowing for discovery?
"Granting a preliminary injunction is within a trial court's
discretion, and we will not interfere unless manifest abuse is
shown." J.M., J.R. v. Montana High School Ass'n (1994), 265 Mont.
230, 237, 875 P.2d 1026, 1030. However, if the district court
arrives at a conclusion of law, no discretion is involved, and
therefore, we review the district court's conclusions of law to
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determine whether the district court's interpretation of the law is
correct. J.M., 875 P.2d at 1030.
The District Court denied appellants' request for an
injunction pendente lite after concluding that:
2. The presently constructed McDunn home does not
violate the restrictive covenant as alleged by
plaintiffs.
3. Further, even if the McDunn home were violative of
the covenant, the covenant is ambiguous in that it does
not define "tri-level," "due care, " "surrounding
territory," Land1 "one and one-half stories."
Ambiguities are to be construed in favor of the McDunns
and their right to have free use of their land. The
covenant is non-sensible. While due care is to be used
in the design of a tri-level home so as not to block the
view, there is no such requirement that a one-story home
be so constructed. In other words it appears a one-story
could block the view while a tri-level cannot.
4. In any event, even if the McDunn home were violative
of the covenants, the height covenant is unenforceable in
that there have been multiple violations of the covenant
in the past and plaintiffs are held to have waived their
right to enforce the height covenant.
5. The defendants are entitled to their costs not to
exceed $100 and to their reasonably incurred attorney
fees pursuant to M.C.A. Sec. 27-19-306 and Montana case
law, specifically, Marta v. Smith, 191 Mont. 179, 622
P.2d 1011 (1981).
Appellants argue that the District Court erred in denying
their application for an injunction pendente lite because the
District Court made findings and conclusions regarding appellants'
claims and defenses without first obtaining respondents' answer and
without allowing for discovery. Appellants contend that the show
cause hearing was a de facto final hearing on the merits where both
parties presented conflicting testimony and evidence without the
benefit of full discovery and requisite pleadings.
A preliminary injunction may be granted when it appears that
the continuance of an act would produce a great or irreparable
injury to the applicant. Section 27-19-201, MCA; See Awareness
Group v. Board of Trustees of School Dist. No. 4 (1990), 243 Mont.
469, 795 P.2d 447. A preliminary injunction does not determine the
merits of the case, but rather, prevents further injury or
irreparable harm by preserving the status quo of the subject in
controversy pending an adjudication on the merits. Boyer v.
Karagacin (1978), 178 Mont. 26, 33, 582 P.2d 1173, 1177. Before
the district court can issue a preliminary injunction, the
applicant must establish a prima facie case, or show that it is at
least doubtful as to whether the applicant will suffer irreparable
injury before an adjudication on the merits. If either showing is
made, courts are inclined to issue the preliminary injunction.
Porter v. K. & S. Partnership (1981), 192 Mont. 175, 181, 627 P.2d
836, 839. If, however, a preliminary injunction will not preserve
the status quo and minimize harm to all parties pending a full
trial on the merits, it should not be issued. Porter, 627 P.2d at
839.
When granting temporary relief by injunction, it is not the
province of the district court to determine matters that may arise
during a trial on the merits. Porter, 627 P.2d at 839. The record
shows that the District Court determined matters at the show cause
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hearing that should have been determined at a trial on the merits.
Both parties presented substantial testimony, witnesses, and
exhibits without the benefit of full discovery and without the
benefit of responsive pleading to appellants' complaint. During a
show cause hearing on a preliminary injunction, the district court
should restrict itself to determining whether the applicant has
made a sufficient case to warrant preserving a right in status quo
until a trial on the merits can be had. Porter, 627 P.2d at 839.
We hold that the District Court erred in reaching a final
determination on the merits at a hearing for injunctive relief
before obtaining responsive pleadings and without allowing for
discovery. We remand for a trial on the merits to determine what,
if any, permanent equitable relief appellants are entitled to after
the requisite pleadings have been filed and the parties have
completed discovery.
ISSUE 2
Did the District Court err in awarding respondents' attorney
fees and costs?
The District Court concluded that respondents were entitled to
their costs, not to exceed $100, and to their reasonably incurred
attorney fees pursuant to 5 27-19-306, MCA, and Marta v. Smith
(1981), 191 Mont. 179, 622 P.2d 1011.
Because this matter is being remanded to the District Court
for further proceedings, we reverse the award of attorney fees and
costs.
We reverse and remand for further proceedings in accordance
with this opinion.
We concur:
c/d Chief Justice