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No. 99-229
IN THE SUPREME COURT OF THE STATE OF MONTANA
2001 MT 58
CITY OF WHITEFISH,
Plaintiff and Respondent,
v.
TROY TOWN PUMP, INC., and WHITEFISH
DEVELOPMENT LIMITED PARTNERSHIP,
d/b/a TOWN PUMP and LUCKY LIL'S CASINO,
and TOWN PUMP OF WHITEFISH, INC.,
Defendants and Appellants.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Katherine Curtis, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Daniel D. Johns and Debra D. Parker; Crowley, Haughey, Hanson
& Dietrich, Kalispell, Montana
For Respondent:
John M. Phelps; Hedman, Hileman & Lacosta, Whitefish, Montana
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Submitted on Briefs: October 12, 2000
Decided: April 10, 2001
Filed:
__________________________________________
Clerk
Chief Justice Karla M. Gray delivered the Opinion of the Court.
¶1 Troy Town Pump, Inc., Whitefish Development Limited Partnership d/b/a Town Pump and Lucky
Lil's Casino, and Town Pump of Whitefish, Inc. (collectively, Town Pump) appeal from the judgment of
the Eleventh Judicial District Court, Flathead County, in this action by the City of Whitefish for
injunctive relief. We affirm.
¶2 We address the following issues:
¶3 1. Did the District Court abuse its discretion in ordering Town Pump to permanently
remove neon and flourescent lighting installed in an awning pursuant to a permit issued by
the City of Whitefish?
¶4 2. Did the District Court abuse its discretion in retaining jurisdiction to determine
whether the awning must be further dismantled after the lights are removed?
¶5 3. Did the District Court err in dismissing Town Pump's counterclaim for damages on
the basis it failed to state a claim upon which relief could be granted?
BACKGROUND
¶6 The City of Whitefish (Whitefish) is a municipality which has adopted a self-
government charter as allowed under the laws of the State of Montana. See Title 7, Part 3,
MCA. Whitefish has also adopted a Master Plan which includes a policy that commercial
signs are a blighting factor and that Whitefish sign ordinances are to be strictly enforced.
The Whitefish sign ordinance contains strict limits on the size and character of signs.
¶7 Town Pump operates a service station, convenience store, and casino at 6600 Highway
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93 South in Whitefish. In 1996, a new exterior, referred to as a fascia, was designed for
the Town Pump facilities. The new design included the words "Lucky Lil's Casino," "Win
$800," "Poker Casino Keno," and "Town Pump Food Stores" above a raspberry-colored
awning. The Whitefish City Manager reviewed and approved blueprints for the design
before it was installed, and the Whitefish Building Inspector issued a building permit. At
that time, the City Manager believed only the written words, not the entire awning,
constituted a sign. The written words, considered alone, complied with Whitefish's
ordinance limiting sign size.
¶8 Whitefish Municipal Code § 17.120.040 defines a "sign" as
[a]ny device, structure, fixture, or placard using graphics, symbols, pictures,
emblems, lighting schemes and/or written copy, or any other medium for visual
communication, including its supporting structure and source of light, which is
intended to be used to attract attention to a location or subject matter, for
advertising, instruction, or information purposes, and is viewable from a public right-
of-way.
After the new Town Pump fascia was installed and lighted, the Whitefish City Council
concluded the entire awning constituted a sign which violated the Whitefish sign
ordinance because it was too big. As installed, the awning consists of a band of translucent
raspberry-colored material 4 feet 11 inches high which extends the entire length of the
front of the building--approximately 162 feet. Four rows of white flourescent light tubes
located behind the translucent material extend the entire length of--and shine through--the
material, giving it a bright, glowing effect. In addition, four neon lights are placed in front
of the translucent material. The neon lights run horizontally the entire length of the front
of the building and along approximately 42 feet of the rear of the building.
¶9 Whitefish notified Town Pump of its decision disapproving the new fascia and the
Whitefish City Council directed that the lighting be removed. When Town Pump refused,
Whitefish filed this action for injunctive relief prohibiting Town Pump from operating the
multi-colored neon lighting. Town Pump's answer to the complaint included an
affirmative defense that Whitefish's claims are barred under the doctrine of equitable
estoppel and, in the alternative, a counterclaim for the costs of remodeling its building.
¶10 During a bench trial, the Whitefish City Manager testified that if he had realized the
fascia would be as bright as it was--creating a lighting scheme that dwarfed the lettering
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and far exceeded general lighting needs--he would have treated the entire awning as a
sign. In that case, a building permit could not have been issued because the awning far
exceeded the square footage of sign allowed. The City Manager also opined that the
explanatory notes on the blueprint were written in technical, sign company jargon that was
difficult for a lay person to understand.
¶11 The District Court found that, in the drawing of the building on the blueprint, the
awning appeared to be "merely an exterior surface or siding of the building, and not a part
of the sign." Further, "[t]he term 'fascia' used by [Town Pump] in [its] Application [for a
building permit] connoted to City officials a portion of the exterior surface of a building,
rather than a sign that is brightly lit." The court issued a permanent injunction directing
Town Pump to immediately remove all flourescent lights behind the awning, all neon
lights located in front of the raspberry translucent fabric, and all neon lights on the rear of
its building. It also reserved jurisdiction to determine whether the awning continues to
constitute a sign within the meaning of the Whitefish sign ordinance following the
removal of the lights, thereby justifying further injunctive relief. In a subsequent order, the
District Court granted Whitefish's motion for judgment on the pleadings on Town Pump's
counterclaim, determining that the counterclaim fails to state a claim upon which relief
may be granted. Town Pump appeals.
DISCUSSION
¶12 1. Did the District Court abuse its discretion in ordering Town Pump to permanently
remove neon and flourescent lighting installed in an awning pursuant to a permit issued by
Whitefish?
¶13 We review a trial court's grant of injunctive relief for abuse of discretion. Jefferson
County v. McCauley Ranches, 1999 MT 333, ¶ 6, 297 Mont. 392, ¶ 6, 994 P.2d 11, ¶ 6,
citing Butler v. Germann (1991), 251 Mont. 107, 114, 822 P.2d 1067, 1072.
¶14 Town Pump's primary argument under this issue is that its affirmative defense under
the doctrine of equitable estoppel precludes Whitefish's claims. In other words, Town
Pump argues Whitefish should have been precluded from invoking its sign ordinance after
its earlier approval of the Town Pump building plans.
¶15 The elements of equitable estoppel are: (1) conduct, acts, language or silence
amounting to a representation or a concealment of a material fact; (2) the facts must be
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known to the party to be estopped at the time of that party's conduct, or at least the
circumstances must be such that knowledge of the facts is necessarily imputed to that
party; (3) the truth must be unknown to the other party at the time the representation was
acted upon; (4) the representation must be made with the intent or expectation that it will
be acted on by the other party; (5) the representation must be relied upon by the other
party, leading that party to act upon it; and (6) the other party must in fact rely on the
representation so as to change its position for the worse. Billings Post No. 1634 v. Dept. of
Revenue (1997), 284 Mont. 84, 90, 943 P.2d 517, 520 (citation omitted). All six elements
of equitable estoppel must be established, and by clear and convincing evidence. Billings
Post, 284 Mont. at 90, 943 P.2d at 520 (citation omitted).
¶16 As to the first element, Town Pump contends Whitefish's issuance of the permit to
complete the building was an act constituting a representation of a material fact. We
disagree.
¶17 In Elk Park Ranch, Inc. v. Park County (1997), 282 Mont. 154, 935 P.2d 1131, Elk
Park Ranch, Inc. (Elk Park) claimed Park County was equitably estopped from refusing to
accept its deeds of conveyance for twenty-acre tracts purportedly created by one-party
deeds. The basis for the estoppel claim was that the Park County Attorney previously had
represented to Elk Park that the documents were legal documents and could be recorded.
This Court held on appeal that equitable estoppel is inapplicable when the conduct
complained of consists solely of legal representations; if the representation is a mistake of
law, the first element of the test is not met. We reasoned that, while Park County's initial
legal opinion that the deeds were valid may have constituted an inadvertent
misrepresentation of the law, it did not constitute a misrepresentation of fact. Elk Park,
282 Mont. at 166, 935 P.2d at 1138.
¶18 Similarly, in Billings Post, a claim of equitable estoppel failed because the
misrepresentation alleged was one of law, not one of fact. In that case, the Department of
Revenue (DOR) had historically represented to the Billings Veterans of Foreign Wars Post
(Billings Post) that its pre-1947 liquor and beer licenses were nontransferable and
nonassignable, leading the Billings Post to allow those licenses to lapse in 1974. However,
after this Court clarified in Helena Aerie No. 16, F.O.E. v. Dept. of Revenue (1991), 251
Mont. 77, 822 P.2d 1057, that pre-1947 beer and liquor licenses remained transferable and
assignable, the Billings Post argued that the DOR should be estopped from refusing to
reissue its lapsed licenses. This Court affirmed a district court decision that the doctrine of
equitable estoppel did not apply, in part because the incorrect classification of the Billings
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Post's licenses as nontransferable and nonassignable was an erroneous legal interpretation,
not a misrepresentation of fact. Billings Post, 284 Mont. at 91, 943 P.2d at 521.
¶19 The same reasoning applies in the present case. The broad definition of "sign" in
Whitefish's ordinance clearly is intended to include not only a traditional sign, but any
embellishments intended to draw attention to a traditional sign, or to the business location
itself. The District Court found that in actuality the brightly lit awning, located
immediately beneath the lettering that advertises the Town Pump, was clearly designed to
attract attention to the lettering and to the building. The original approval of Town Pump's
building plan was based on an incorrect conclusion that Town Pump's proposed fascia did
not constitute a sign under Whitefish's ordinances--it was a misrepresentation of law, not a
misrepresentation of fact. Therefore, Town Pump has not established the first element of
equitable estoppel, which requires a representation of fact, not law.
¶20 The District Court determined Town Pump failed to establish the first three elements
of equitable estoppel. As a result, it determined Whitefish could not be estopped from
enforcing its sign ordinance. However, the failure on the part of Town Pump to establish
even one element of equitable estoppel by clear and convincing evidence dooms that
defense. See Billings Post, 284 Mont. at 90, 943 P.2d at 520. Because we have determined
that the District Court was correct in ruling that Town Pump failed to establish the first
element, Town Pump's equitable estoppel defense to Whitefish's request for an injunction
fails.
¶21 Town Pump also argues that because this was a mandatory injunction requiring it to
take the affirmative act of tearing out the lighting from its awning, and because mandatory
injunctions are not favored and are inappropriate absent a showing of irreparable injury,
the trial court abused its discretion in granting Whitefish's request for an injunction. Town
Pump advances no authorities, however, to show Montana has differentiated the standard
of review for mandatory injunctions from that for any other injunction. In fact, the only
relevant statement by this Court which we have located is a quotation with approval of
California law in Grosfield v. Johnson (1935), 98 Mont. 412, 421, 39 P.2d 660, 664
(citation omitted), wherein it was stated, in part, "[t]he principles upon which mandatory
and prohibitory injunctions are granted do not materially differ."
¶22 Whitefish's broad definition of the term "sign" is clearly intended to include not only
traditional signs, but also any embellishments intended to draw attention to a traditional
sign, or to the business location itself. The bright multi-colored lighting on the Town
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Pump building had the admitted purpose of drawing attention to the building. We hold the
District Court did not abuse its discretion in ordering Town Pump to permanently remove
the neon and flourescent lighting installed in its store awning.
¶23. Did the District Court abuse its discretion in retaining jurisdiction to determine
whether the awning must be further dismantled after the lights are removed?
¶24 At the end of its findings, conclusions and order, the District Court "reserved"
jurisdiction
to further determine whether the structure as it exists following the removal of said
lights continues to constitute a "sign" within the meaning of the Whitefish sign
ordinance such that further provisions of this injunction concerning the raspberry
flex film are appropriate.
Town Pump maintains that, in retaining jurisdiction, the District Court failed to limit itself
to the relief requested by Whitefish. We disagree.
¶25 Whitefish's complaint specifically requested preliminary and permanent injunctions
prohibiting Town Pump from using the lighting on its building. In addition, the complaint
contained a final request for "such other and further relief as may be equitable."
¶26 Moreover, in its proposed findings, conclusions and order, Whitefish proposed Town
Pump be ordered
to immediately remove all of the hot pink (or raspberry) translucent fabric (the flex
film background) that covers the exterior surface of the fascia, to remove all of the
fluorescent lights which are currently located behind the fascia, and to remove all of
the neon lights that are located in front of the hot pink (or raspberry) translucent
fabric, and to remove all of the neon lights on the west side of Defendants' building
[.]
As a result, Whitefish's proposed findings, conclusions and order also clearly asked for
relief in addition to removal of the lights.
¶27 Whitefish's prayer for "such other and further relief" in its complaint, together with its
proposed findings and conclusions, amount to a broad request for relief. As Town Pump
itself correctly argues in Issue 3, a court sitting in equity is empowered to grant all relief
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necessary to the entire adjustment of the subject matter of the litigation. See Trustees of
Washington-Idaho-Montana Carpenters-Employers Retirement Trust Fund v. Galleria
Partnership (1989), 239 Mont. 250, 265, 780 P.2d 608, 617 (citations omitted). By
retaining jurisdiction to ensure that complete relief could be accomplished within one
judicial proceeding, the District Court exercised its discretion in a manner which allows it
to grant all relief necessary to the entire adjustment of the subject matter of this litigation.
¶28 We hold the District Court did not abuse its discretion in retaining jurisdiction to
allow Whitefish to come back after the lights are removed and demand an order requiring
Town Pump to further dismantle the awning.
¶29 3. Did the District Court err in dismissing Town Pump's counterclaim for damages on
the basis it failed to state a claim upon which relief could be granted?
¶30 As noted above, Town Pump filed a counterclaim alleging it had relied upon
Whitefish's representations in constructing and installing the neon lighting and requesting
damages if a permanent injunction were granted. The District Court determined that no
claim separate from equitable estoppel had been established to support the counterclaim.
¶31 Town Pump argues on appeal that if any part of the order for injunctive relief is
affirmed, it must receive an equitable award of damages for the costs of dismantling and
repairing its awning. In so arguing, it relies on Town of Boulder v. Bullock (1981), 193
Mont. 493, 632 P.2d 716, but Town of Boulder does not support Town Pump's position.
¶32 In Town of Boulder, Bullock obtained a building permit from the Town of Boulder to
construct a home and office. The Town of Boulder later sued to enjoin and remove, having
determined the proposed construction, which had been started by that time, would
encroach upon a dedicated street. Bullock answered and filed a counterclaim for damages,
part of which were associated with removing the construction already completed. The
district court refused the Town of Boulder's requested relief and dismissed Bullock's claim
for removal damages. Town of Boulder, 193 Mont. at 495-98, 632 P.2d at 718-19.
¶33 On appeal, this Court upheld the district court's rulings and determined the Town of
Boulder was estopped from revoking the already-issued building permit. Bullock, 193
Mont. at 500, 632 P.2d at 720. Thus, Bullock prevailed on his estoppel claim in that case,
unlike Town Pump in the present case.
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¶34 Town Pump concedes that we did not authorize damages in Town of Boulder. Town
Pump attributes this to the fact that the Town of Boulder did not prevail on its claim for
injunctive relief. Nevertheless, the fact is that Town Pump has advanced no authority
under which equitable "removal damages" have been awarded where an equitable estoppel
defense to the injunctive relief has been successful, much less where--as here--the defense
has failed.
¶35 While it is true that a court sitting in equity is empowered to grant all relief necessary
to the entire adjustment of the subject matter of the litigation--the general proposition for
which Town Pump cites Galleria, 239 Mont. at 265, 780 P.2d at 617--that rule of law does
not aid Town Pump's argument here. In order for Whitefish to obtain a permanent
injunction, it first had to overcome Town Pump's counterclaim that it was equitably
estopped from doing so. Whitefish has defeated that counterclaim. Absent a legal theory
on which to base damages, Whitefish cannot be held responsible for damages. We hold
that the District Court did not err in dismissing Town Pump's counterclaim for damages on
the basis it failed to state a claim upon which relief could be granted.
¶36 Affirmed.
/S/ KARLA M. GRAY
We Concur:
/S/ TERRY N. TRIEWEILER
/S/ JIM REGNIER
/S/ W. WILLIAM LEAPHART
/S/ JAMES C. NELSON
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