No. 96-359
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
STATE OF MONTANA, ON THE RELATION
OF FLOYD LEE LOVINS,
Petitioner and Appellant,
v.
TOOLE COUNTY, MONTANA, and ALLAN J
UNDERDAL, DENIS FREELAND, and ALAN
RYAN, Toole County Commissioners,
Respondents and Respondents
APPEAL FROM: District Court of the Ninth Judicial District,
In and for the County of Toole,
The Honorable David Cybulski, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
William Conklin, Conklin, Nybo, Leveque & Murphy,
P. C., Great Falls, Montana
For Respondents:
Ward Shanahan and Ronald F. Waterman, Gough,
Shanahan, Johnson & Waterman, Helena, Montana
Merle Raph, County Attorney, Shelby, Montana
Submitted on Briefs: July 30, 1996
Decided: September 12, 1996
Filed:
Chief Justice J. A. Turnage delivered the Opinion of the Court.
Floyd Lee Lovins appeals an order of the Ninth Judicial
District Court, Toole County, granting summary judgment to Toole
County and the Toole County Commissioners and imposing Rule 11,
M.R.Civ.P., sanctions upon Lovins. By order dated July 30, 1996,
this Court affirmed the District Court's judgment but reversed the
imposition of sanctions, stating that a full opinion would follow.
We restate the issues as:
1. Whether summary judgment must be reversed because
supporting affidavits filed with the court were not served upon the
opposing party.
2. Whether the District Court erred in granting summary
judgment .
3. Whether the court's sanction was an abuse of discretion.
Floyd Lee Lovins, acting pro se, filed this action in the
District Court in April 1996. He asked the court to stay proceed-
ings by which the Toole County Commissioners proposed to borrow
$1,700,000 through the Montana Health Facility Authority to
construct an addition to Toole County Hospital and Nursing Home.
The proposed addition would house administrative facilities and an
outpatient and physicians' clinic. Lovins claimed that Toole
County could not borrow the money without first submitting the
question to a vote of county electors as required under 5 7-7-2402,
MCA .
The defendants moved for summary judgment on the basis of res
judicata or collateral estoppel. They asked the court to take
judicial notice of a previous action, Lovins v. Toole County, Ninth
Judicial District Court Cause No. DV-95-009. Lovins had filed that
case a year before to prevent a proposed lease arrangement under
which a private nonprofit corporation would take over operation of
the hospital. In that action, the court granted Lovins a writ of
prohibition in August 1995.
In the present case, the District Court ruled that res
judicata barred the action and that Lovins was estopped from
proceeding further on this issue because he had unsuccessful1y made
the same legal arguments in the 1995 case. The court also ruled
that § 7-6-2512(2), MCA, allows Toole County to agree to levy the
tax and pledge it to payment of bonds issued under § 7-34-2411,
MCA; and that § 7-6-2512(2),MCA, specifically provides that pledge
of these taxes to secure bond payment cannot be used to cause the
bonds to be considered indebtedness of the county for any purpose.
The court further found that Lovins had unreasonably and
vexatiously multiplied the proceedings. As a sanction pursuant to
Rule 11, M.R.Civ.P., and to discourage abusive litigation tactics,
the court prohibited Lovins from commencing or filing any further
litigation in Toole County for the next four years as a pro se
litigant without first obtaining permission from a district judge.
Lovins appealed to this Court. The defendants asked, without
objection by Lovins, that this appeal be considered on an expedited
basis. They pointed out that the normal appellate review schedule
would delay the Court's decision beyond this year's deadline for
funding requests through the Montana Health Facility Authority. On
July 30, 1996, the Court issued an order affirming the District
Court's grant of summary judgment but reversing the imposition of
Rule 11 sanctions and remanding "for further proceedings pursuant
to our opinion in the case."
ISSUE 1
Must summary judgment be reversed because supporting affida-
vits filed with the court were not served upon the opposing party?
Rule 56, M.R.Civ.P., allows a party to file affidavits in
support of a motion for summary judgment. While the Rule does not
specifically so state, logic and fairness dictate that affidavits
so filed shall also be served on the opposing party. We take this
opportunity to note for the Bench and Bar that not only is service
of affidavits in support or opposition to motions for summary
judgment or other substantive motions logical and fair, but also
that failure to serve such affidavits may in some circumstances
raise an issue of due process.
In this case, the defendants filed the affidavits of Gary
Zadick and Allan Underdal in support of their motion for summary
judgment, but they did not serve copies of those affidavits upon
Lovins prior to the hearing on their motion. The record shows,
however, that Lovins failed to preserve his objections to the
court's alleged reliance upon the affidavits of Zadick and
Underdal. Lovins raised the matter of failure to timely serve the
Zadick and Underdal affidavits only in his own affidavit which was
filed with his initial brief on appeal. We will not hold a
district court in error for an omission which it was not given an
opportunity to correct.
Moreover, a third affidavit, of Toole County Commissioner
Denis Freeland, was filed with the summary judgment motion, so that
the information contained in the two challenged affidavits was
already before the court in another form. In his affidavit,
Freeland attested to the matters discussed in the District Court's
summary judgment order. The court's summary judgment order stated
that "an affidavit" had been submitted in connection with the
motion for summary judgment.
In its summary judgment order, the District Court also
discussed the Resolution by which Toole County proposed the 1996
bond issue. A copy of that Resolution was attached to the Underdal
affidavit. The court's order stated that the bond issue as
revealed in that Resolution was essentially the same as the issue
involved in the 1995 action. However, the court also stated that
there would not be an issue of material fact even if the bond
issues were different.
Even assuming that the District Court considered the two
challenged affidavits and that this issue was preserved, we
conclude that no error has been demonstrated. We hold that, under
the circumstances here presented, failure to serve the two
supporting affidavits is not grounds for reversal.
ISSUE 2
Did the District Court err in granting summary judgment?
Our standard of review of a summary judgment is the same as
that used by a district court--whether, pursuant to Rule 56(c),
M.R.Civ.P., material issues of fact exist and whether the moving
party is entitled to judgment as a matter of law. Motarie v. N.
Mont. Joint Refuse Disposal (1995), 274 Mont. 239, 242, 907 P.2d
The District Court determined that res judicata barred Lovins
from challenging the legality of the proposed bond on the ground
that 5 7-7-2402, MCA, requires the approval of the electors of the
county. The court's ruling was based on its taking judicial notice
of Lovins' 1995 action.
Section 7-7-2402, MCA, provides:
Election required to borrow money--exceptions. (1)
Except as provided in subsection (3),the board of county
commissioners may not borrow money for any of the
purposes mentioned in this title or for any single
purpose in an amount exceeding $500,000 without:
(a) first having submitted the question of a loan
to a vote of the electors of the county; and
(b) the approval of a majority of the electors of
the county.
(2) If a majority of the votes cast are in favor of
the loan, then the board may make the loan, issuing bonds
or otherwise as may seem best for the interests of the
county.
(3) It is not necessary to submit to the electors
the question of borrowing money:
(a) to refund outstanding bonds; or
(b) for the purpose of enabling any county to
liquidate its indebtedness to another county incident to
the creation of a new county or the change of any county
boundary lines.
Lovins points out that this statute was not mentioned in his
petition for relief in his 1995 lawsuit. However, as part of its
decision in the 1995 action, the District Court stated that Toole
County's acquisition of over $500,000 in debt for bond repayment
for construction of the clinic "would require a vote of the Toole
County electorate to approve the indebtedness."
The defendants moved to alter or amend that judgment by
removing the above language from the court's decision, in light of
the then-recently enacted Ch. 520, L. 1995. That legislation,
which was proposed as HB 421, amended Montana laws relating to
construction of county hospitals and limitations upon bonded
indebtedness of counties for such purposes. The issue was briefed
by both parties.
In its order granting the motion to amend, the court gave
thorough written consideration to the effect of HB 421. It stated:
When read with the inclusion of physician office
buildings as part of "health care facilities" which can
be funded by bonds, the amendment to Section 7-6-2512
makes it clear that the vote of the electorate is not
required for approval of certain bonds to construct
"health care facilities." See HB 421, Section 4,
amending Montana Code Annotated, Section 7-34-2201.
The above language clearly demonstrates that the issue was
considered by the court in the 1995 case.
Lovins argues that the decision on this issue in the 1995 case
was, nevertheless, mere dictum. He points out that if an issue's
consideration is not essential to the question involved in the
action, then a ruling on the issue is obiter dictum which cannot be
a basis for a finding of res judicata or collateral estoppel
If issues are determined but the judgment is not depen-
dent upon the determinations, relitigation of those
issues in a subsequent action between the parties is not
precluded. Such determinations have the characteristics
of dicta[.]
Restatement (Second) of Judgments, § 27, cmt. h (1982)
A court's decision on an issue which is before it and which
was fully argued by counsel and deliberately considered by the
court is not dictum. Bottomly v. Ford (1945), 117 Mont. 160, 167,
157 P.2d 108, 112. Here, although the election requirement issue
was briefed and decided in the 1995 case, the issue was not before
the court under the pleadings, nor was consideration of it
necessary to resolve the case. The dispositive holding in the 1995
case was that Toole County was prohibited from entering into a
proposed lease of Toole County Hospital and Nursing Home to a
private nonprofit corporation. Because resolution of the election
requirement issue was not necessary to resolution of the 1995 case,
the court's consideration thereof, however well-reasoned, is
dictum.
Our analysis does not end there, however. We will affirm a
judgment which was correct, even if it was granted for the wrong
reason. Higham v. City of Red Lodge (lggl), 247 Mont. 400, 402,
807 P.2d 195, 196. We therefore proceed to consider whether Toole
County was required to put its hospital bonding proposal to a vote
of the people.
The title of Ch. 520, L. 1995, describes the act, in part, as
"clarifying that certain bonds may be issued without an election."
Section 7-34-2411, MCA, was amended as part of Ch. 520. As
amended, the statute provides:
County health care facility bonds authorized. (1)
Notwithstandins anv limitation imposed bv law upon the
bonded indebtedness of a county, a county acquiring,
erecting, furnishing, equipping, expanding, improving, or
maintaining a health care facility under 7-8-2102 or 7-
34-2201 or a boarding home under 7-34-2301 mav borrow
money and issue its bonds for a health care facilitv or
a boarding home, including refunding bonds, in the form
and upon the terms as it may determine, payable out of
any revenue of the facility or boarding home, respective-
ly, including revenue derived from:
(a) fees and payments for health care or boarding
home services;
(b) taxes levied under 7-6-2512 or 7-34-2417 for a
health care facility;
(c) grants or contributions from the federal
government; or
(d) any other sources.
(2) For the securitv of the bonds, the countv may
bv resolution make and enter into anv covenant, aqree-
ment, or indenture and exercise any additional powers
authorized to be made, entered into, or exercised by a
county, including those authorized in 7-6-2512 and this
part. The sums required to pay principal and interest
and to create and maintain a reserve for the bonds may be
made payable from any and all revenue of the health care
facility or boarding home prior to the payment of current
costs of operation and maintenance of the facilities.
Section 7-34-2411, MCA (emphasis supplied) . Subsection (2) was
added to § 7-6-2512, MCA, as part of the same legislation:
If a county issues bonds under 7-34-2411 to finance
or refinance the costs of a health care facility, the
board of county commissioners may covenant to levy the
tax authorized by this section during the term of the
bonds, to the extent necessary, and to apply the collec-
tions of the tax to the costs of erecting, furnishing,
equipping, expanding, improving, maintaining, and
operating the health care facility or facilities of the
county or the payment of principal of or interest on the
bonds. The pledqe of the taxes to the pavment of the
bonds mav not cause the bonds to be considered indebted-
ness of the countv for the purpose of anv statutorv
limitation or restriction. The pledge may be made by the
board only upon authorization of a majority of the
electors of the county voting on the pledge at a general
or special election as provided in 7-34-2414.
Section 7-6-2512(2), MCA (emphasis supplied) .
Section 7-34-2414, MCA, was also amended as part of Ch. 520,
to provide in relevant part:
Election required on question of issuance of bonds. (1)
A county may not issue bonds to which all or a portion of
9
the taxes levied under 7-6-2512 are pledaed or to which
the qeneral tax authorized under 7-34-2418 is pledqed
until the question of approval of the issuance of the
bonds has been submitted to the reqistered electors of
the county at a general election or a special election
called for that purpose by the governing body of the
county and the majority of the electors voting on the
question have voted in favor of issuing the bonds.
Section 7-34-2414(I), MCA (emphasis supplied) .
The proposal involved here, as described in the notice of
public hearing attached to Lovins' complaint, the Toole County
Commissioners' Resolution to issue the bonds, and the sample bond
attached thereto, was solely for a revenue bond issue. Payment of
principal and interest to the bondholders is to be derived solely
from revenues of the Toole County Hospital and Nursing Home, and
not from Toole County taxes. This was not a proposal for general
obligation bonds, for which an election would have been required
under the portion of § 7-34-2414, MCA, underlined above.
Lovins points out that these statutes must be harmonized with
preexisting statutes on this subject. He contends that such
harmonization necessarily results in a conclusion that while the
1995 amendments abolish limitations on bonded indebtedness for
county hospitals, they do not repeal the requirement that borrowing
for such purposes is subject to a vote pursuant to § 7-7-2402,MCA.
We disagree. To accept Lovins' argument would render portions
of the 1995 amendments meaningless. In part, the amended statutes
provide that indebtedness for repayment of health care facility
bonds is not to be considered indebtedness of the county "for the
purpose of any statutory limitation or restriction." Section 7-6-
2512(2), MCA. Certainly the § 7-7-2402,MCA, election requirement
10
is a "statutory limitation or restriction." As amended, 5 7-34-
2414, MCA, requires an election on such a bond issue only when "all
or a portion of the taxes levied under 7-6-2512 are pledged or to
which the general tax authorized under 7-34-2418 is pledged."
Therefore, we conclude that indebtedness for repayment of the
health care facility bonds herein proposed is not to be considered
indebtedness ot the county for purposes of the § 7-7-2402, MCA,
election requirement.
Contrary to the assertions in Justice Nelson's dissent, the
present action does bring directly into issue the effect of the
statutory amendments enacted as part of Ch. 520. Ch. 520 carves
out an exception to the requirements set forth at § 7-7-2402, MCA,
the statute relied upon by Lovins.
Any lingering ambiguity in statutory intent is erased by an
examination of the legislative history of Ch. 520. In summarizing
the purpose of HB 421 to the Senate Local Government Committee, its
sponsor, Rep. Ewer, stated:
HB 421 would clarify that districts can borrow using the
revenue bond route not subject to a vote of the people
and general obligation bonds could be authorized which
require a vote of the people.
Minutes of Senate Local Government Committee, Comments of Rep.
Ewer, March 21, 1995, at p. 2.
We conclude that under the foregoing statutes, a vote of the
electorate is not required before Toole County issues bonds for the
proposed addition to the Toole County Hospital and Nursing Home.
We therefore hold that the District Court did not err in granting
summary judgment for the defendants.
11
ISSUE 3
Was the court's sanction an abuse of discretion?
The District Court found that Lovins unreasonably and
vexatiously multiplied the proceedings in his two actions concern-
ing the hospital. The court stated that it could by "no stretch of
the imagination1(find that there existed a good faith argument or
reasonable facts on which to base this litigation. As a sanction
under Rule 11, M.R.Civ.P., the court prohibited Lovins for the next
four years from commencing or filing any further litigation in
Toole County as a pro se litigant without first submitting the
pleadings to and obtaining permission to file from a district
judge
Rule 11, M.R.Civ.P., provides, in relevant part:
The signature of an attorney or party [on a pleading,
motion, or other paper filed] constitutes a certificate
by the signer that the signer has read the pleading,
motion, or other paper; that to the best of the signer's
knowledge, information, and belief formed after reason-
able inquiry it is well grounded in fact and is warranted
by existing law or a good faith argument for the exten-
sion, modification, or reversal of existing law, and that
it is not interposed for any improper purpose, such as to
harass or to cause unnecessary delay or needless increase
in the cost of litigation. . . . If a pleading, motion,
or other paper is signed in violation of this rule, the
court, upon motion or upon its own initiative, shall
impose upon the person who signed it, a represented
party, or both, an appropriate sanction, which may
include an order to pay to the other party or parties the
amount of the reasonable expenses incurred because of the
filing of the pleading, motion, or other paper, including
a reasonable attorney's fee.
In applying Rule 11, this Court has stated:
Although Montana's Rule 11 does not state LhaL a
trial court must give notice to show cause and hold a
hearing before imposing Rule 11 sanctions, we hold that
a trial court should do so in order to provide the party
with due process. The party should be afforded suffi-
cient time in which to prepare its case against imposi-
tion of sanctions. In addition, a trial court should
specify in its judgment or order upon which pleading (s) ,
,
motion (s) or other paper ( s ) it bases imposition of Rule
11 sanctions.
Lindey's, Inc. v. Goodover (1994), 264 Mont. 4 8 9 , 497, 872 P.2d
767, 772.
No hearing was held on the question of sanctions in this case.
Lindevlsclearly requires a hearing before Rule 11 sanctions may be
imposed. Because of the court's failure to hold such a hearing,
the sanction herein imposed cannot stand and is therefore reversed.
We affirm the judgment of the District Court with the
exception of the imposition of sanctions.
*r
r
C h i e f Justice
We concur:
Justices
Justice James C. Nelson dissenting
In our rush to decide this case on an expedited basis we may
well have made bad law on an issue of first impression. I did not
join this Court's July 30, 1996 order for the reasons hereinafter
set forth, and I now dissent from our decision.
At the outset, and while not the primary focus of my dissent,
I find little comfort in our decision on Issue 1. Rule 5,
M.R.Civ.P.,clearly requires that copies of motions and supporting
documents be served on the adverse party or, if represented, on his
attorney. Whether Lovins, a pro se litigant in the trial court,
preserved his objection or not, counsel's1 failure to serve him
with the affidavits supporting a motion for summary judgment that
was about to be heard by the court, cannot be simply rationalized
away as easily as we do. Especially where, according to Lovins'
affidavit, he was sitting in the hallway outside the courtroom and
the clerk's office when the affidavits were filed May 22, 1996.
While acknowledging that the affidavits of Allan J. Underdal and
Gary M. Zadick were not served on Lovins, we excuse that breach of
Rule 5, M.R.Civ.P., on the basis that the affidavit of Denis
Freeland was filed with the County's motion for summary judgment on
May 6, 1996, and therefore, presumably, was served on Lovins. Even
assuming, arguendo, that Freeland's affidavit was served on Lovins,
Freeland's affidavit addresses different matters than either
Underdal's or Zadick's affidavits. Further, the 1996 bond
h he County's counsel on appeal is not the same counsel that
represented the County before the trial court.
14
resolution which figured into the County's summary judgment
argument was only attached to Underdal's affidavit and was not
otherwise a part of the record. The court's reference to the 1996
bond resolution during oral argument did not cure counsel's failure
to comply with the clear mandate of Rule 5, M.R.Civ.P. See e.g.,
Kenner v. Moran (l994), 263 Mont. 368, 376, 868 P.2d 620, 625,
wherein we set aside the grant of summary judgment where the movant
did not give the opposing pro se litigant the ten-day notice
required under Rule 56(a), M.R.Civ.P.
Secondly, in view of my position on Issue 2 , I would,
likewise, vacate the District Court's Rule 11, M.R.Civ.P.,
sanctions imposed against Lovins. There was no basis for
sanctions. As we have concluded, Lovins' second suit was not
barred by res judicata or collateral estoppel. Moreover, on the
merits, I believe that the District Court erred in granting summary
judgment to the County. The fact that sanctions were imposed
without a hearing serves further to emphasize the trial court's
error.
With that said, and with regard to the majority's discussion
of the bond issue, I submit that the trial court and, now, this
Court have ruled on an issue that was never properly joined in the
underlying litigation. Lovins' 1996 suit against Toole County was
to prevent the County from borrowing $1.7 million from the Montana
Health Facility Authority (MHFA) pursuant to a notice published on
April 25, 1996, wherein the MHFA stated its intention to issue
$5.220 million in bonds under Title 90, Chapter 7, parts 1, 2 and
3 , MCA, with the proceeds to fund, among other things, the loan to
Toole County. Lovins contended that the County was prohibited by
§ 7-7-2402,MCA, from borrowing the $1.7 million without a vote of
the electors. That is plainly all his suit was about.
In that respect, § 7-.7-2402, MCA, is clear that, with two
exceptions not at issue here, the board of county commissioners may
not borrow money for any of the purposes mentioned in Title 7 of
the Montana Code (which by definition includes the construction,
furnishing, operation and maintenance of health care facilities, § §
7-8-2102 and 7-34-2201,MCA, and boarding homes, § 7-34-2301,MCA)
or for any single purpose in an amount exceeding $500,000 without
first obtaining a favorable vote of the majority of electors of the
county. If the electors approve the loan, then the county can make
the loan, "issuing bonds or otherwise. . . . "
The District Court order granting summary judgment and our
decision, however, focus not on § 7-7-2402, MCA, but on § 7-34-
2411, MCA2, and conclude that the provisions of that latter section
along with §§ 7-6-2512(2) and 7-34-2414,MCA, obviate the necessity
for any vote on the issuance of bonds by the County for the
proposed addition to the Toole County Hospital.
The problem with this approach is that over the course of two
different lawsuits the issue of the applicability and proper
interpretation of § 7-34-2411, MCA, et. seq., regarding Toole
County's financing of its proposed hospital addition was never
'All statutory references are to the 1995 version of the
Montana Code Annotated.
properly joined in Lovins ' litigation. Rather, in both Lovins'
1995 and 1996 suits, the interpretations of §§ 7-34-2411, MCA, et.
seq., which we uphold here, were inserted gratuitously, as dicta,
by the district courts.
In his 1995 suit, Lovins sued to stop the County from
unlawfully leasing the hospital facility, and he won on that issue.
Lovins never sued to stop the County from issuing revenue bonds.
Properly, we have concluded that the trial court's subsequent
opinion interpreting the RB 421 amendments was dictum.
Lovins' 1996 suit was filed to stop the County from borrowing
$1,7 million which MHFA was going to loan to Toole County from the
proceeds of the bonds it ( M H F A ) was going to issue. Lovins simply
contended that 7-7-2402, MCA, prohibited that loan without a
vote. The proposal described in the notice attached to Lovins'
1996 complaint did not address Toole County issuing revenue bonds
under §§ 7-34-2411, et. seq. Rather, that notice involved MHFA
issuing bonds under authority of a completely different Title and
Chapter of the Montana Code and its then loaning $1.7 million to
Toole County. How Toole County was going to secure or pay for that
loan was not the issue raised in Lovins' 1996 suit.
Moreover, the County's primary defense of the 1996 suit w a s
that Lovins' action w a s barred by the res judicata and collateral
estoppel effect of the District Court's 1995 opinion--the same
opinion which we have now concluded was dictum. In line with that
defense the District Court granted summary judgment on the basis of
res judicata and collateral estoppel. The court could have and
should have simply stopped at that point. However, committing the
same mistake as d i d the trial c o u r t i n the 1 9 9 5 suit, the District
Court similarly went further and gratuitously added a one paragraph
ruling on the applicability of the HI3 421 amendments. If the trial
s
courtr opinion on the HB 421 amendments was dictum in the 1935
suit, then on the same rationale, the District Court's ruling on
that same issue in the 1996 suit should be dictum as well. In
neither the 1995 nor the 1996 suit was the courtfs ruling on the HB
421 amendments essential to dispose of Lovinsl complaints.
We have now brought this error full circle. We have issued
a substantive opinion on a legal question that was addressed as
nothing more than dicta in two different district court decisions.
As a consequence, I suggest that our decision is of little
precedential value. The courts have saved Toole County's hospital
addition and have allowed the County to borrow the $2.7 million
from MHFA. However, the courts have accomplished that at the
expense of what may very well be the flawed interpretation of
statutes not at issue and, perhaps, the loss of the right of the
electors of Toole County--who, if experience is any teacher, may
likely have to pick up the tab at some point in time--to vote on
this important issue. So much for "expedited" decisions. I can
only hope that before bond counsel in some future offering relies
on our decision here, this whole issue will be thoroughly
reexamined and, if necessary, re-litigated.
As to the merits of our decision on Issue 2, Lovins, who on
appeal is represented by counsel, has advanced well-reasoned,
legitimate arguments that are not analyzed in our opinion. Lovins
contends that the 1995 amendments to §§ 7-6-2512(2), 7-34-2411,and
7-34-2414,MCA, contained in HB 421 do not address county election
requirements for borrowing. Rather, Lovins maintains that language
in those sections underscored in the majority opinion refers to the
limitations on the amount of bonded indebtedness to which a county
may obligate itself under § 7-7-2203, MCA, and similarly worded
statutes but does not purport to exempt such bonds from the
limitation on county indebtedness set forth in § 7-7-2101, MCA.
Moreover, Lovins argues that the amendments do not make any
reference to the requirement of § 7-7-2402,MCA, referred to above.
Lovins concludes that reading together the various statutes,
including § 7-6-2512(2),MCA, demonstrates two different election
requirements for county projects. If a health care facility bond
issue is to be supported or financed by general tax support, then
§ 7-6-2512(2), MCA, requires an election regardless of the size of
the bond obligation. On the other hand, any loan to a county
exceeding $500,000 for a single purpose requires a vote of the
electors pursuant to § 7-7-2402, MCA, whether or not bonds are
issued to finance the project. Neither election scheme is
dependent upon or related to the other. Lovins maintains there is
nothing in HB 421 that indicates that the general requirement for
election approval of county loans exceeding $500,000 was
contemplated in that Act.
Given the cursory manner in which we have treated this
complicated issue, I do not know who is correct. I am not, however,
persuaded by anything that I have read in the briefs or in our
decision that Lovins may not well be right. That aside, and more
importantly, we err in attempting to interpret, as a matter of
first impression, statutory language where the statutes involved
were never properly at issue in the trial court. I am all the more
concerned with that error because the precedential effect of our
decision will sanction local governments to incur literally
millions of dollars of debt, without a vote, where, arguably, there
is a statutory requirement for an election.
I dissent.
Justice Karla M. Gray joins in