Big Sky Hidden Village Owners Ass'n v. Hidden Village, Inc.

NO. 95-224
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
BIG SKY HIDDEN VILLAGE
OWNERS ASSOCIATION, INC.,
Plaintiff and Appellant,

HIDDEN VILLAGE, INC.,
Defendant and Respondent
and
CARLISLE NEITHOLD, et al.,
Defendants and Respondents.

HIDDEN VILLAGE, INC.,
Third Party Plaintiff
and Respondent,
v.
CALVIN JEROME HANAN, et al.,
Third Party 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:
Gregory 0. Morgan, Robert Cameron, Bozeman,
Montana; K. Kent Koolen, Moulton Law Firm (Big Sky
Hidden Village Owners Association, Calvin Hanan, et
al.)
For Respondent:
James H. Goetz, Robert K. Baldwin, Goetz, Madden &
Dunn I Bozeman, Montana (Hidden Village, Inc.) ;
Calvin?. Stacey, Billings, Montana (Hidden Village,
arlisle, Neithold, et al.)
Submitted on Briefs: January 4, 1996
AFR", 3 I998 April 23, 1996
Decided:
Justice James C. Nelson delivered the Opinion of the Court.

Big Sky Hidden Village Owners Association (Big Sky) appeals
from a judgment and memorandum and order entered by the Eighteenth

Judicial District Court, Gallatin County granting Hidden Village,
Inc.'s (HVI) motion for partial summary judgment, denying Big Sky's

motion for partial summary judgment, and denying HVI's motion to

strike. We affirm.

ISSUES
1. Whether real property adjacent to a condominium
development, which was never submitted to Montana's Unit Ownership
Act by description on the condominium declaration or amendment
thereto, is subject to the act and the declaration.

2. Whether the owner of real property adjacent to a
condominium development may use the roads running through the
condominium property to access the adjacent land.

3. Whether the owner of real property adjacent to a
condominium development may use the water and sewer mains running
through the condominium property to serve the adjacent land.

BACKGROUND

On December 15, 1980, the Gallatin County Board of County

Commissioners approved Big Sky Camper Village Inc.'s preliminary

application for a planned unit development (PUD) located on the

site of the existing Big Sky Camper Village for the construction of

a maximum of 198 condominium units. The proposed development

consisted of 37.E acres located approximately one and one-half

miles west of Meadow Village. Those 37.8 acres encompass the Big

Sky Hidden Village Condominium and HVI's remaining property. The

findings of fact and order approving the PUD did not restrict where

on the 37.8 acres the 198 units were to be placed. The findings of

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fact and order approving the PUD stated that "adequate access to
all units should be provided even though the roads will be private

ones," and ordered that "the roads are the responsibility of the

developer until they are turned over to the Property Owner's

Association and that the roads will be private roads, for which the

County will have no responsibility." The Gallatin County Board of
County Commissioners' order further stated that "water supply and
sewage disposal will be handled by existing central systems." The
rural improvement district agreed to provide sewage collection and

disposal to the 198 condominium units. Additionally, Lone Mountain
Springs, Inc., agreed to provide domestic water to the 198

condominium units.

Pursuant to 5 70-23-103, MCA, Big Sky Camper Village, Inc.,
filed the declaration and by-laws for the Big Sky Hidden Village

Condominium. The declaration provides in pertinent part:

Declarant reserves the right from time to time (but on or
before 10 years from the date of the initial recording of
this Declaration) to expand the number of units to be
included in this condominium by subjecting the
condominium site plan as shown in Exhibit "CT' to the
construction of additional units, and to provide for up
to 198 additional units for an over-all total of 198
units of one, two, or three bedroom units.

The declaration submitted Tract I-A to the Condominium Act and has

at various times submitted additional lands contained within

certificate of survey 1605 (COS 1605). Specifically, the original

declaration describes the real property submitted by the

declaration and subject to the Montana Unit Ownership Act as

Tract I-A of the Condominium Subdivision known as Hidden
Village Condominium recorded on 1980, in Book
of Plats at Page Gallatmounty, Montana and
situated within the-d l/4 of Section 35 Township
L South, Range 3 East, M.P.M., Gallatin County,
Montana.
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Tract I-A does not include the entire area covered by co.9 1605.
Although the land in dispute in the instant case is neither part of
Tract I-A nor has been submitted as an amendment to the

declaration, it is included within the description of the PUD.

HVI is the successor in interest to Camper Village, the
original declarant/developer. Of the approved 198 units, 141 have

been constructed as Big Sky Hidden Village Condominiums. When BVI

conveyed the condominium units, it did not reserve any easement,

right of access, or right of use for the roads, water lines, or

sewer lines. However, the roads and the sewer and water lines

cross HVI's property in order to reach the Big Sky Hidden Village

Condominium. The land included in COS 1605 but not included in the

declaration belongs to HVI. This remaining land surrounds the Big

Sky Hidden Village Condominium on three sides. See diagram.

On April 2, 1991, HVI applied to the Department of Health and

Environmental Sciences, Lone Mountain Springs, and Rural

Improvement District #305 for approval of 57 additional units. Big

Sky then filed suit in the Eighteenth Judicial District Court,

Gallatin County, seeking a declaratory judgment that the land

within COS 1605 is subject to the declaration, that the roads

within the Condominium are private and not available for public

use, and that the water and sewer systems are the property of the

unit owners and cannot be expanded without their permission. HVI

moved for partial summary judgment, seeking a declaratory judgment

that the real property owned by HVI within COS 1605 is not subject

to the Big Sky Hidden Village Condominium declaration or bylaws.

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On June 15, 1994, the District Court granted HVI's motion, stating

that HVI's property within COS 1605 is not subject to the Big Sky

Hidden Village Condominium declaration or bylaws.

On June 30, 1994, Big Sky moved for partial summary judgment

on the remaining issues. In its March 31, 1995 memorandum and

order, the District Court denied Big Sky's motion ruling that the

roads, while private, are not the exclusive property of Big Sky or

its members; that the roads are a public right-of-way for all

purposes other than maintenance; that HVI has the right to use the

roads for ingress and egress to its property because it has
acquired easements by implication and necessity; and that HVI has

the right to use the water and sewer systems. On April 14, 1995,

Big Sky filed its notice of appeal from the District Court's

judgment and memorandum and order granting HVI's cross motion for

partial summary judgment.

HVI filed in this Court a motion to dismiss the appeal arguing

that neither District Court order is reviewable because there were

multiple claims and because the orders were not final. Citing

Hennen v. Omega Enterprises, Inc. (1994), 264 Mont. 505, 507-08,

872 P.2d 797, 799, we held in a June 1, 1995 order that the

District Court's March 1995 order is appealable under Rule l(b) (2),

M.R.App.P., because it was a denial of injunctive relief and that

the June 15, 1994 judgment is appealable because it is an

intermediate order or decision.

-,
 STANDARD OF REVIEW
We review a grant of summary judgment de ZIOVO using the same

criteria initially used by the District Court under Rule 56,
M.R.Civ.P. Mead v. M.S.B., Inc. (19941, 264 Mont. 465, 470, 872
P.2d 782, 785. Therefore, we determine whether there is an absence
of genuine issues of material fact and whether the moving party is

entitled to judgment as a matter of law. Mead, 872 P.2d at 705.
DISCUSSION

1. Whether real property adjacent to a condominium
development, which was never submitted to Montana's Unit Ownership
Act by description on the condominium declaration or amendment
thereto, is subject to the act and the declaration.

Big Sky claims that the District Court erred in finding that

the land owned by HVI is not subject to the Big Sky Hidden Village

Condominium declaration or bylaws, and thus is not subject to

Montana's Unit Ownership Act, Title 70, chapter 23, MCA. HVI

argues that the District Court correctly determined that the ten-

year time limit in the declaration only applies to land included in

that declaration or added by amendment thereto and does not limit
HVI's right to develop its remaining land.

Section 70-23-103, MCA, sets forth the applicability of the

Unit Ownership Act establishing a condominium as follows:

Applicability -- submission by declaration required. In
order to submit any property to the provisions of this
chapter, the sole owner or sole lessee or all of the
owners or all of the lessees thereof shall execute,
acknowledge, and record a declaration in the office of
the recording officer of the county in which the property
is located. The declaration shall be executed in
accordance with 70-23-301.

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Section 70-23-102(6), MCA, provides that a declaration is the
instrument by which property is submitted to the provisions of the

Unit Ownership Act. Actual filing of the declaration is the action
"which subjects the property in question to the provisions of the

act." Jordan v. Elizabethan Manor (1979), 181 Mont. 424, 430, 593

P.2d 1049, 1053. A declaration shall contain among other things "a

description of the land, whether leased or in fee simple, on which
the building is or is to be located." Section 70-23-301, MCA. A

certificate of survey, on the other hand, is not a declaration and
does not submit land to the Unit Ownership Act.

Accordingly, the declaration for the Big Sky Hidden Village

Condominium and not COS 1605 determines the land subject to the

provisions of the Unit Ownership Act. Specifically, the original

declaration included only Tract I-A. Subsequent amendments to the

declaration included Tracts I-XI and the Recreation Tract. Big Sky

concedes that if the property in question is not on Big Sky Hidden

Village Condominium land, then it is not subject to the

declaration.

However, Big Sky argues that the description of property in

the original declaration is incomplete and therefore COS 1605

properly determines the property included in the Big Sky Hidden

Village Condominium. While section II of the declaration broadly

states that the property included in the Condominium is located in

"the SW l/4 of Section 35, Township 6 South, Range 3 East, M.P.M.,

Gallatin County, Montana," the original site plan (Exhibit B),
incorporated within the original declaration and recorded with it,

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specifically includes a metes and bounds description of the
property submitted to the act. Similar site plans were submitted
with each amendment to the declaration. Therefore, the declaration

contained a complete and specific description of the property.

HVI argues that the ten-year limitation contained in the
declaration only governs the addition of units to the Big Sky

Hidden Village Condominium, not development of land outside the

Condominium. HVI further argues that the term "expansion" in the

declaration refers to the addition of units or land to the

Condominium and not to other property owned by HVI. Moreover, HVI
notes that the ownership and voting section of the declaration

states that 'I [‘cl he Hidden Village Condominium consists of the real

property described above . . .'I Exhibit C to the declaration
shows "the proposed or projected location of the additional

buildings and lands which may be added by the declarant."

Therefore, for other land to be included within the Condominium, it

would have to be added by amendment. Because the amendments to the

declaration do not include HVI's land in question, HVI argues that

the land is not part of the Condominium.

There are no provisions within the declaration that purport to

prevent HVI from developing land not placed within the Big Sky

Hidden Village Condominium. The ten-year limitation in the
declaration only governs the addition to units to the Big Sky

Hidden Village Condominium, not the separate development of HVI's

land outside the Condominium. Thus the term "expansion" and the
limitation thereof, applies only to additional units to the Big Sky

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Hidden Village Condominium, not the separate construction of
separate improvements on land owned by HVI outside the Condominium.
The Gallatin Board of County Commissioners approved 198 units; Lone
Mountain Springs agreed to provide service for 198 units, and RID
305 agreed to provide service for 198 units. The Gallatin County
Clerk and Recorder has the declaration on file to give notice to
any interested party exactly what land is included in the Big Sky
Hidden Village Condominium. Accordingly, we hold that the District
Court correctly found that HVI's real property adjacent to the Big
Sky Hidden Village Condominium was never submitted to Montana's
Unit Ownership Act by description on the Condominium declaration or
amendment thereto.
2. Whether the owner of real property adjacent to a
condominium development may use the roads running through the
condominium property to access the adjacent land.
Big Sky contends that the roads going through the Condominium
are private and therefore HVI may not use them. HVI argues that
the roads are public and in the alternative that HVI has an
easement by implication and an easement by necessity to use the
roads.
As early as 1973, what is now Big Sky Hidden Village
Condominium and HVI's remaining property was laced with a system of
roads accommodating vehicles for use as an R.V. park. Therefore,
in 1980, when Camper Village sought approval of the PUD, a series
of roads already existed on the land to be developed. The roads
extended through what is now HVI's remaining property and what is
now the Big Sky Hidden Village Condominium. Those roads which

9
predated the PUD approval, the filing of the declaration, and the
construction of the first condominium unit, are the same roads that

continue to serve the Condominium and HVI's land today.
Additionally, in approving the PUD, the Gallatin County Board of
County Commissioners found that "to preserve to the maximum extent
possible the natural characteristics of the land . . . adequate

access to all units should be provided even though the roads will

be private ones."

Camper Village, Inc., and HVI developed the Big Sky Hidden
Village Condominium in phases. Camper Village, Inc., initially
submitted to the declaration Tract I-A comprised of a few acres

and 14 units. Camper Village Inc., and HVI continued to develop
the Condominium in phases, adding small parcels of land to the
declaration. During this phased development, unit owners had to

cross property owned by Camper Village or HVI to obtain access to

their condominiums. Similarly, to obtain access to the remaining
land to construct additional units, Camper Village and HVI used the

existing roads that cross the property that is already part of the

Condominium. Thus HVI claims that it had an easement by necessity

allowing it to use the existing road system.

An easement by necessity is a subspecies of an easement by

implication that arises through strict necessity for exit and

access to a parcel of property. Graham v. Mack (1984), 216 Mont.

165, 175, 699 P.Zd 590, 596; see also Schmid v. McDowell (19821,

199 Mont. 233, 237, 649 P.2d 431, 432. In Schmid, a property owner

brought action against a neighboring property owner seeking a

10
declaration of an easement by necessity. We defined an easement by
necessity as follows:

[wlhere an owner of land conveys a parcel thereof which
has no outlet to a highway except over the remaining
lands of the grantor or over the land of strangers, a way
of necessity exists over the remaining lands of the
grantor. Similarly, a way of necessity is found when the
owner of lands retains the inner portion conveying to
another the balance, across which he must go for exit and
access.

Schmid, 649 P.2d at 433 (citations omitted); see also Peters v.
Johnson (1983), 203 Mont. 120, 661 P.Zd 24. Further, we
distinguished an easement by necessity from other implied easements

in noting an easement by necessity need not be in existence at the

time of conveyance, but rather the conveyance gives rise to the
easement. However, the tracts over which the easement is claimed

must have had a common ownership or unity of title immediately

prior to the severance giving rise to the necessity. Schmid, 649
P.2d at 433.

Subsequently in Graham, we set forth two basic elements of an

easement by necessity: 1) unity of ownership, and 2) strict

necessity at the time the unified tracts are separated. Graham,

699 P.Zd at 596. In Graham, we held that no implied easement

existed absent unified title of the property involved. We
reiterated the strong public policy against shutting off a tract of

land and thus rendering it unusable. "Where an owner of land

conveys a parcel which has no outlet to a highway except over the
remaining lands of the grantor or over the lands of strangers, a

way of necessity exists over the remaining lands of the grantor."

Graham, 699 P.2d at 596 (quoting Schmid, 649 P.2d at 433).

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However, the way granted may not be over the land of a third party

or stranger to the title. Graham, 699 P.2d at 596-97; see also
Woods v. Houle (1988), 235 Mont. 158, 163, 766 P.2d 250, 253.

In Woods, the district court granted an easement by necessity.

In reversing the district court, we held that the respondent was
not able to meet the requirements of an easement by necessity as

set forth in Graham. The easement by necessity did not give the
respondent access to a public road but only to a third party's

land, and as we held in Graham, a way granted may not be on the

land of a third party. Moreover, the respondent had an easement by

prescription which is incompatible with an easement by necessity.

Woods, 766 P.2d at 253.

In Smith v. Moran (1985), 215 Mont. 31, 38, 693 P.2d 1246,

1251, we considered the Gallatin County Subdivision Regulation

4.4.2, which provides that:

[wlhen a new subdivision adjoins unsubdivided land and
reasonable access thereto must pass through the new
subdivision, streets and rights of way shall be provided
to allow suitable access to the unsubdivided land.
In Smith, there was evidence that plaintiffs had ample alternative

access to their property, and there was no evidence to suggest that

access across the subdivision was essential. We further noted that

"any unique property interest in abutting landowners is limited to

the right only to adequate access necessary to connect the

landowner to the general street system." Smith, 693 P.2d at 1251

(citing Wynia v. City of Great Falls (19791, 183 Mont. 458, 600

P.Zd 802).

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 In the instant case, HVI meets both the unity of title
requirement and the requirement of strict necessity at the time the
unified tracts were separated. Camper Village, HVI's predecessor,
owned all of COS 1605 and conveyed part of that tract to the Big

Sky unit owners. At the time Camper Village conveyed Tract I-A to
the Big Sky unit owners, submitting Tract I-A to the declaration,

the strict necessity of access and exit to the public roads arose.

In his affidavit, Jack Schunke, an engineer, stated that if not

afforded access across the existing roads, HVI will have great
difficulty developing additional property, if it may do so at all.

Moreover, he stated that the road some of the unit owners use to
enter the Condominium crosses HVI's land. Carlisle Neithold,

president of HVI stated in his affidavit that HVI does not own
abutting land outside COS 1605, and cannot obtain access to its
remaining land without using the existing roadways. Thus there is

evidence that HVI does not have ample alternative access to its

property.
Big Sky's argument that the ten-year limitation in the

declaration precludes an easement by implication and by necessity

because it negates the presumed intent to reserve easements and the
necessity for those easements does not persuade us. As stated

above, the ten-year limitation in the declaration only addresses
HVI's right to continue to add land or units to the Big Sky Hidden

Village Condominium and does not address HVI's right to use the

roads.

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 Accordingly, the District Court correctly granted summary
judgment in favor of HVI, determining that HVI has an easement by

necessity. Because we hold that the District Court correctly

granted summary judgment on the easement by necessity, we need not

reach the issue of HVI's alleged easement by implication.

3. Whether the owner of real property adjacent to a
condominium development may use the water and sewer mains running
through the condominium property to serve the adjacent land.

Big Sky contends that the sewer and water systems are common

elements and therefore HVI has no right to use them. HVI concedes
that the water and sewer systems may be common elements held by the

condominium unit owners as tenants in common, but contends that Big

Sky does not have exclusive ownership of the water and sewer

systems. In fact, HVI argues that public utilities own the water

and sewer systems, have the responsibility for maintaining the

systems, and therefore have the exclusive right and duty to

determine who hooks up to the systems.

In its definition section, the declaration includes water and

sewer lines as general common elements. Section 70-23-102(S) (d),

MCA, also includes water and waste disposal as general common

elements. Section 70-23-404, MCA, explains the nature of the

ownership interest in general common elements as follows:

The undivided interest in the common elements shall not
be separated from the unit to which it appertains and
shall be conveyed or encumbered with the unit even though
such interest is not expressly mentioned or described in
the conveyance or other instrument.
Consequently, each unit owner may use the common elements for their

intended purposes. See § 70-23-503, MCA. The bylaws of a

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condominium provide for the maintenance, repair, and replacement of

the common elements or the additions and improvements thereto.

Section 70-23-504, MCA.

HVI argues that while the Condominium members may own the

water and sewer lines, they do so as tenants in common and cannot
preclude another party from a right to an easement to use the same

common elements. In fact, HVI argues that Big Sky's claim to
exclusive LlSCS and ownership of the water and sewer lines

contradicts the fact that Lone Mountain Springs and Water and Sewer
District (WSD) #363 exercise the right to determine who hooks up to

the respective systems and contradicts the approval of the PUD

allowing HVI to obtain water and sewer service through the existing

systems.
Prior to 1973, a developer installed the water distribution

mains located within what is now Big Sky Hidden Village
Condominium. When the Gallatin county Board of county
Commissioners approved the PUD in 1980, the water distribution

system consisting of a storage tank on the hill above the

development and numerous water distribution mains and loops

therefore already existed. Additionally, prior to 1972, a

developer installed a series of sewer collection mains on the

development. Rural Improvement District #305 obtained ownership of

the sewer collection mains that transported waste water from the

development to a treatment facility that it owned and operated.
After the PUD was approved, Camper Village, Inc. and HVI

developed the Big Sky Hidden Village Condominium in phases. During

15
the phased development, the unit owners had to use the water

distribution mains and sewer collection mains passing underneath

Camper Village, Inc. property. Similarly, when Camper Village, Inc.

and HVI constructed units for inclusion into the Condominium, they

hooked those units up to the existing water distribution and sewer

collection mains running, in part, under the Condominium property.

Lone Mountain Springs owns the water tank and wells serving

Big Sky Hidden Village Condominium and has repaired and maintained

the lines servicing the Condominium. Two water sources serve the

Big Sky Hidden Village Condominium, a well not far from the

condominiums and a well that serves the Sweetgrass Hills

Subdivision. Therefore, two water distribution mains enter the

Condominium, one from the nearby well and one from the water system

that serves the Sweetgrass Hills Subdivision. These mains

intersect and travel to the water storage tank on Big Sky Lumber

Company's property. The Condominium derives water pressure and

capacity from the water storage tank. That tank is crucial to Big

Sky Hidden Village Condominium's continued service. The water

distribution mains that transport water through HVI's property to

the Condominium and on to a third party's property existed before

Camper Village bought the property it then conveyed to HVI and to

the Condominium. Those same mains now transport water from a third

party's property, through HVI's property, through the Condominium

through HVI's property and to the water storage tank.

Lone Mountain Springs has maintained and repaired the water

system serving the Condominium. Big Sky does not pay for the

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repair and maintenance expenses to the water system. Lone Mountain
Springs installed a telemetry system to regulate the flow of water
into the storage tank to prevent the tank from overflowing or

becoming empty. After a well had become contaminated, Lone
Mountain Springs connected the water distribution pipes in the Big

Sky Hidden Village condominium to the Sweetgrass Hills Subdivision

water system.

Section 69-4-511 Cl), MCA, provides for the financial
responsibility and liability for water service as follows:

A property owner is responsible for the costs of
constructing privately supplied water service pipelines
from the main to his premises and for maintaining service
pipelines from his property line to his premises.
Big Sky Hidden Village Condominium did not construct the water

lines on its premises or the lines from its premises to the main

water lines, nor has it paid for the maintenance or repair of the

water lines from its property line to its premises.

The sewer collection mains also pass through property owned by

HVI, the Condominium and on to property owned by third parties.

Originally, Rural Improvement District #305 serviced Camper Village

Inc.'s property and then serviced both HVI's and the Condominium's

property. Rural Improvement District #305 transferred its assets,

debts, and liabilities to WSD #363; it included in the assets

transferred existing sewer collection pipes serving the Big Sky

Hidden Village Condominium. WSD #363 was organized by vote of the

citizens of the Big Sky area. All of the sewer and waste water

generated by the Big Sky Hidden Village Condominium flows into the

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sewer collection mains and sewage treatment facility owned by WSD
#363.

RID #305 maintained the sewer collection system servicing the
condominium. RID #305 hired a firm to conduct a video inspection
of the sewer mains and hired an irrigation company to dig up and

repair portions of the sewer mains serving the Condominium. WSD

#363 has also maintained the lines within the Condominium and has

given approvals and disapprovals for hook up of additional users

within the Condominium. Therefore, WSD #363 clearly exercises
indicia of ownership of the sewer lines in the Big Sky Hidden

Village Condominium. WSD #363 agreed to provide service to all 198

units in the PUD. Consequently, the annual assessment HVI pays to

Gallatin County includes payment to WSD #363.
The undisputed evidence contained in the affidavits indicates

that Lone Mountain Springs and WSD #363 claim ownership of the

systems they operate and maintain. The evidence of maintenance and

repair substantiates that claim. To the contrary, although Big Sky

Hidden Village Condominium claims ownership of the systems, it

provides no evidence to support its claim. The Condominium failed

to present a persuasive argument in its brief to support ownership

of the water and sewer systems. Therefore, because WSD #363 owns

the sewer system that services the Big Sky Hidden Village

Condominium and Lone Mountain Springs owns the water system that

services the Big Sky Hidden Village Condominium, the District Court

correctly determined that Big Sky may not interfere with or control

Lone Mountain Springs' or WSD #363's service and hook ups.

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Affirmed.

i9