Horn v. Little

January 15 2008

DA 06-0397

IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 10N

GEORGE R. HORN and ELVA HORN,
Husband and Wife, and BRANDY CROWE,

Plaintiffs and Appellants,

v.

JOSEPH E. LITTLE,

Defendant and Appellee.

APPEAL FROM: District Court of the Twentieth Judicial District,
In and For the County of Sanders, Cause No. DV 02-65
Honorable C. B. McNeil, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

William A. Douglas, Douglas Law Firm, Libby, Montana

For Appellee:

Amy N. Guth, Attorney at Law, Libby, Montana

Submitted on Briefs: April 11, 2007

Decided: January 15, 2008

Filed:

__________________________________________
Clerk
Chief Justice Karla M. Gray delivered the Opinion of the Court.

¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal

Operating Rules, the following decision shall not be cited as precedent. It shall be filed

as a public document with the Clerk of the Supreme Court and its case title, Supreme

Court cause number and disposition shall be included in this Court's quarterly list of

noncitable cases published in the Pacific Reporter and Montana Reports.

¶2 The Twentieth Judicial District Court, Sanders County, held a bench trial in this

action by George R. Horn, Elva Horn and Brandy Crowe (Horns) against Joseph E. Little

(Little) for damages to a water delivery system. The District Court subsequently entered

findings of fact, conclusions of law and judgment that the Horns take nothing for their

complaint. The Horns appeal and we affirm.

¶3 We restate the issues as follows:

¶4 1. Did the District Court commit reversible error in refusing to admit testimony

regarding out-of-court statements by Little’s adult son and daughter-in-law?

¶5 2. Did the District Court err in concluding the Horns failed to prove Little

breached any duty owed to them?

¶6 3. Are the Horns entitled to a new trial because the District Court materially

restricted their presentation of evidence and then ruled against them on grounds they did

not meet their burden of proof?

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 BACKGROUND

¶7 This case involves a gravity-fed water delivery system installed between 1976 and

1980 by Ronald G. Bierer on land he owned with his wife, Brenda K. Bierer, in Sanders

County, Montana. The water source for the water delivery system is a stream situated on

United States Forest Service land. During the spring and summer, the water in both the

stream and the water delivery system is littered with debris, mud, dirt and even small

animals.

¶8 Pipes transport water from the stream for approximately 2,000 feet to a pelton

wheel hydroelectric turbine generator in an above-ground structure sometimes called “the

valve shed.” From there, buried water lines transport water to a lake and several

buildings, including a large store building, on different parts of the property owned by the

Bierers.

¶9 In August of 1980, the Bierers sold the western portion of their property, including

the large store building, to Sam Bouras, Robert Guilfoyle, Jr., and Robert Guilfoyle, Sr.

The Horns are successors in interest to Bouras and the Guilfoyles.

¶10 In 1983, Brenda K. Bierer sold the remainder of the property formerly owned by

herself and Ronald G. Bierer to Little. The valve shed sits on this part of the property,

and the water delivery system passes through this property on its way to the Horns’

property. In 1998, Little sold his property to his son and daughter-in-law, Wayne and

Sharon Little, by contract for deed. Wayne and Sharon defaulted, and ownership

returned to Little in 2002.

¶11 In July of 2002, the Horns filed a complaint alleging that, during the summer of

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2001, Little and Wayne Little had cut off the original water delivery system to the Horns’

land and building, and substituted a water delivery system from a lower elevation in the

stream, which included old rusty pipe. According to the Horns, these acts resulted in

drastically reduced water pressure and water quality to their property.

¶12 The sole issues of fact set forth by the Horns in the pretrial order were what acts, if

any, were committed by Little that resulted in the damages claimed by the Horns, and

what damages they sustained. The issues of law set forth by the Horns for trial were

whether they have a 10-foot wide easement across Little’s land, whether they are entitled

to a new and independent easement for installation of an independent water delivery

system, and whether they are entitled to recover as damages the “costs of location and

installation of the new pipeline easement.”

¶13 In its findings of fact, conclusions of law and judgment, the District Court found

that, although neither party had introduced any evidence of a written conveyance of a

water right, the Horns had a domestic use right to 4½ gallons of water per minute from

the stream, by mesne conveyance from Guilfoyle. The court also found that the Horns

held a 10-foot wide easement over the water delivery system on Little’s land, with the

right to maintain and repair. The court determined, however, that the Horns provided no

evidence of a conveyance to their predecessors or themselves of any ownership interest in

the water delivery system from the point of diversion in the stream to the point at which

the water delivery system enters their property. Similarly, the court determined the

Horns presented no evidence of any covenant or agreement by Little or his predecessors

to supply any water or guarantee any quantity or quality of water to the Horns or their

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predecessors in interest.

¶14 The District Court concluded the Horns had failed to establish that (1) Little owed

them a duty to provide any quantity or quality of water to them, (2) Little ever interfered

with their easement or their right to maintain and repair the water delivery system, or (3)

Little ever hooked up a secondary water delivery system to harm them. The District

Court entered judgment that the Horns take nothing from Little. The Horns appeal.

STANDARDS OF REVIEW

¶15 Our standard of review of a district court’s evidentiary rulings is whether the court

abused its discretion. For an abuse of discretion in an evidentiary ruling to be the basis

for a new trial, the court’s error must be so significant that it materially affects the

substantial rights of the appellant. McGregor v. National R.R. Passenger Corp., 284

Mont. 178, 182, 943 P.2d 1269, 1271 (1997) (citation omitted).

¶16 We review findings of fact by a district court sitting without a jury to determine if

the court’s findings are clearly erroneous. See M. R. Civ. P. 52(a). Findings are clearly

erroneous if unsupported by substantial credible evidence, if the district court has

misapprehended the effect of the evidence, or if a review of the record leaves this Court

with the definite and firm conviction that a mistake has been committed. In determining

whether substantial credible evidence supports the district court’s findings, we view the

evidence in the light most favorable to the prevailing party. We review a district court’s

conclusions of law to determine whether they are correct. Byrum v. Andren, 2007 MT

107, ¶ 14, 337 Mont. 167, ¶ 14, 159 P.3d 1062, ¶ 14 (citations omitted).

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 ISSUE 1

¶17 Did the District Court commit reversible error in refusing to admit testimony
regarding out-of-court statements by Wayne and Sharon Little?

¶18 The Horns claim the District Court erred in refusing to allow other witnesses to

testify about out-of-court statements allegedly made by Wayne and Sharon Little. The

court refused to allow such testimony on hearsay grounds.

¶19 M. R. Evid. 801(c) defines hearsay as a statement, other than one made by the

declarant while testifying at trial, offered to prove the truth of the matter asserted. Under

M. R. Evid. 801(d)(2)(C) and (D), neither a statement by a person authorized by a party

to make a statement concerning the subject nor a statement by a party’s agent concerning

a matter within the scope of the agency is hearsay.

¶20 The District Court allowed George Horn to testify that Little told him Wayne and

Sharon were his water system operators. George Horn did not testify—and no other

witness testified—that Little stated Wayne and Sharon were Little’s agents. In any event,

while the Horns contend other witnesses could have testified to “material statements

made by Wayne and [Sharon] . . . concerning the water system,” they made no offer of

proof regarding the substance of those statements or their relevance in the District Court.

In addition, as the District Court noted, the Horns could have subpoenaed Wayne and

Sharon, who were on the Horns’ witness list. The Horns elected not to call either.

¶21 The testimony they would like to have admitted is not hearsay, the Horns contend,

because they wanted to impeach Wayne’s credibility with the “inconsistency” that he

“repeatedly” told George Horn that he “was a [Navy] SEAL” when, in his deposition, he

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said he was a SEAL instructor. The Horns did not offer this explanation in response to

hearsay objections in the District Court, and they advance no authority under which they

would have been entitled to impeach Wayne in this fashion in advance of his testimony

and cross-examination.

¶22 We hold the District Court did not commit reversible error by refusing to allow

other witnesses to testify regarding out-of-court statements by Wayne and Sharon Little.

ISSUE 2

¶23 Did the court err in concluding the Horns failed to prove Little breached any
duty owed to the Horns?

¶24 We begin by pointing out that this is not a dispute over whether the parties hold

water rights or the seniority of their water rights pursuant to Title 85, Ch. 2, MCA. The

District Court found the Horns held a water right and an easement to maintain and repair

the existing water delivery system. Those findings are not in dispute.

¶25 The Horns assert the District Court erred in “finding and concluding that [their]

water right was not protected,” “finding that [Little] was not responsible for the damages

to Horns’ water system,” and “finding that [Little] did not damage Horns’ water system.”

We observe that all three of the Horns’ assertions misstate the District Court’s findings of

fact; we review only findings which were actually made. See Madison Addition

Architectural Committee v. Youngwirth, 2000 MT 293, ¶ 17, 302 Mont. 302, ¶ 17, 15

P.3d 1175, ¶ 17 (citation omitted).

¶26 The Horns further state the District Court “obviously misspoke” in concluding

they failed to introduce evidence that Little hooked up a secondary water system to harm

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them. In this regard, the Horns allege that Wayne Little altered the water delivery system

on Little’s land in July of 2001. George Horn testified he first saw the second, lower-

elevation diversion from the creek—which the Horns refer to as “the secondary water

system”—in the spring of 2002, and that he had never seen it before on the numerous

occasions he had been there. Wayne Little testified that what he did in July of 2001 was

to repair damages from a catastrophic break in the valve shed. He testified that he had

first connected the lower-elevation diversion from the creek in the 1980s, with the

knowledge of Guilfoyle, the Horns’ predecessor in interest. The Horns did not call

Guilfoyle as a rebuttal witness to contradict this testimony, nor do they challenge the

court’s findings in this regard.

¶27 At any rate, although the Horns state this is an action for “mischievous

interference,” they offer no tort, contract, jurisprudential or statutory basis under which

Little had a duty to supply them with water through the existing water delivery system on

his land or at all, or to ensure that his use of the water delivery system on his property did

not result in the deposit of debris into the connecting pipes on their property. The

Warranty Deed by which Guilfoyle transferred property to the Horns includes “a 10 foot

wide easement over the existing pipeline, supplying water to the above-described

premises . . . to the point where the water is diverted from U.S. Forest Service property,

with the right to maintain and repair said pipeline.” The Horns produced no evidence that

they had an ownership interest in the water delivery system on Little’s property or on

Forest Service property. The District Court found “[t]hat the Plaintiffs produced no

evidence of any covenant or agreement by [Bierer or Little] to supply any water or to

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guarantee any quantity or quality of water to Plaintiffs or their predecessors in interest.”

The Horns do not challenge this finding, the record supports it and the finding is not

otherwise clearly erroneous.

¶28 The court concluded the conveyance of a water right to the Horns did not include

any agreement or covenant by Bierer to deliver any quantity or quality of water to the

Horns. The court also concluded “the [Horns] failed to prove any breach of any duty

owed by [Little] to [Horns].”

¶29 On this record, the District Court’s conclusions of law are correct. We hold that

the Horns failed to prove a breach of any duty Little owed them.

ISSUE 3

¶30 Are the Horns entitled to a new trial because the District Court materially
restricted their presentation of evidence and then ruled against them on grounds
they did not meet their burden of proof?

¶31 During the second day of the Horns’ case, they were attempting to introduce an

exhibit consisting of particles retrieved from the water taps at the large store building on

their property. The District Court interrupted:

Counsel, quit beating this thing to death. It’s pretty obvious to the Court
that the changes made by the defendant or by his son caused the pollution
and this sediment in the water system. Now, how many more of these
exhibits do you need to show the Court before you think I understand that
picture?

The Horns’ counsel responded that he wanted to introduce the exhibit into evidence and

then have his expert witness conduct tests for lead in them. The court allowed him to do

so.

¶32 The Horns contend that the District Court’s statement constitutes taking “judicial

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notice of the facts that were the basis of Horns’ suit and declared them to be true.” Stated

differently, they claim, “[e]ssentially, the court granted summary judgment that those

facts were true.” The Horns’ counsel states that, based on this “and the other

[unspecified] sua sponte rebukes the court directed towards [him],” “[he] sharply

truncated his planned cross-examination and sharply curtailed most of his planned

rebuttal.”

¶33 Our reading of the transcript does not support the Horns’ argument. The court’s

statements set forth in ¶ 31 clearly reflected irritation with what it apparently perceived as

unduly extended evidence. Indeed, the statements can readily be interpreted as the

District Court’s agreement with the Horns’ causation theory. As discussed above,

however, the Horns have identified no theory under which Little breached any obligation

to them via acts of his alleged agents. Absent a breach, no amount of evidence that

Little’s actions caused the Horns damage would change the result in this action.

Therefore, we conclude the District Court’s comments, while perhaps unwise, do not

constitute grounds for a new trial.

¶34 In this regard, the Horns also reference the District Court’s remarks after their

counsel elicited admissions from Wayne Little about a number of profane and threatening

remarks he made to the Horns’ expert witness about the Horns. The court interrupted,

“Counsel, don’t you think I have a pretty good idea about how that conversation went? . .

. Get on to your next line of questioning. . . . You’ve insulted me enough.” In his

appellate brief, the Horns’ counsel states the District Court’s remarks caused him to

truncate his planned cross-examination and rebuttal. Counsel does not specify what he

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had intended to do. Nor did he object or make an offer of proof in the trial court. We

conclude the District Court’s comment is not grounds for a new trial.

¶35 Affirmed.

/S/ KARLA M. GRAY

We concur:

/S/ W. WILLIAM LEAPHART
/S/ JIM RICE
/S/ JOHN WARNER
/S/ BRIAN MORRIS

Justice Patricia O. Cotter Concurs.

¶36 I concur with the decision of the Court, but write separately to state it was difficult

to reach this position, given what occurred in the District Court during the plaintiffs’

case-in-chief.

¶37 Horns argued at trial that Little had a duty to refrain from affirmatively causing

damage to their water delivery system. In this connection, they sought to prove that the

changes made to the system by Little caused them harm. It was during this attempt at

proof that the District Court made the comments the Court reproduces at ¶ 30 of its

Opinion, to wit, in part: “It’s pretty obvious to the Court that the changes made by the

defendant or by his son caused the pollution and this sediment in the water system.” I

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agree with Horns—this comment does indeed suggest that the Court had already

concluded that Horns had sufficiently proved this point, and no further evidence was

needed. In fact, the District Court’s comments would lead any attorney to quickly change

course, and very much to the detriment of the client’s case should the court ultimately

conclude, as happened here, that the plaintiffs failed to carry their burden of proof on the

very issue the court addressed in its intemperate comments.

¶38 Had the Horns presented a viable theory for recovery of damages from the

defendants, I would be arguing strongly for a reversal on the sole basis of the court’s

comments. However, I believe this Court is correct—all theories advanced by the Horns

fail because Little had no duty, contractual or otherwise, to provide them with a particular

quality or quantity of water. While Horns may have enjoyed a particular level of water

supply prior to the alterations to the system, this did not, under any theory advanced by

Horns, elevate their receipt of water to a protectable interest beyond that found to exist by

the District Court (Opinion, ¶ 12), such as would justify an award of damages. This

being so, a new trial would not change the end result. Therefore, I reluctantly concur

with the Court’s conclusion that the District Court’s comments do not, under these

circumstances, provide grounds for a new trial.

/S/ PATRICIA COTTER

Justice James C. Nelson joins in the Concurrence of Justice Patricia O. Cotter.

/S/ JAMES C. NELSON

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