State Ex Rel. Department of Highways v. Standley Bros.

Court: Montana Supreme Court
Date filed: 1985-04-17
Citations: 699 P.2d 60, 215 Mont. 475, 699 P.2d 60, 215 Mont. 475, 699 P.2d 60, 215 Mont. 475
Copy Citations
4 Citing Cases

                                   No. 84-474
                   IN THE SUPREME COURT OF THE STATE OF MONTANA




THE STATE OF MONTANA, ACTING BY
AND THROUGH THE DEPARTMENT OF
HIGHWAYS OF THE STATE OF MONTANA,
                           Plaintiffs and Respondents,


STANDLEY BROTHERS, MIKE STANDLEY
and ROBERT STANDLEY,
                           Defendants and Appellants.




APPEAL FROM:       District Court of the Eighth Judicial District,
                   In and for the County of Cascade,
                   The Honorable Joel G. Roth, Judge presiding.

COUNSEL OF RECORD:

         For Appellants:
                   Church, Harris, Johnson & Williams; Richard F.
                   Gallagher, Great Falls, Montana

         For Respondents:
                   James A. Lewis, Dept. of Highways, Helena, Montana




                                   Submitted on Briefs:    Feb. 1, 1985

                                                Decided:   April 18, 1985


Filed:   p     .   jyaS



                                   Clerk
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.

         This is an appeal from a proceeding in eminent domain
instituted by the Montana Department of Highways to acquire
an interest in a leasehold for purposes of reconstructing a
rural secondary highway.          The District Court, Eighth Judicial
District, Cascade          County, issued    a    preliminary    order   of
condemnation in        favor of the Highway         Department and       the
Standley Brothers, owners of the leasehold interest, brought
this appeal.
         In    1975 the Cascade County Commissioners asked the
Highway Department to improve portions of a rural road south
of Great Falls known as the Cascade-Ulm loop.               The Highway
Department began work on the project and by April 17, 1978

had surveyed and located a proposed route.                Prior to that
date,    representatives of        the   Highway    Department    and    the
Department of State lands had an informal meeting to discuss
the new location.          The Department of State Lands at that time
was planning the installation of pivot sprinkler irrigation
systems on land adjacent to the proposed highway.                There is
no clear record of this meeting but the parties apparently
were satisfied that the proposed highway would not interfere
with future irrigation development.              In December of 1978 a
public hearing was held on the proposed location.                The route
discussed       at   the   hearing was the       same as was     discussed
earlier by the Highway Department and the Department of State
Lands.        In 1979 a pivot irrigation system was constructed on
section 16, the ] a d at issue in this case.
                 .n                                    The system has a
radius of        1,553 feet and     irrigates 170 acres around the
pivot.        It was designed with an "end gun shutoff" to prevent
water from spraying the existing highway.              Section 16 is a
school     section,              owned           by     the      State        of     Montana       and
administered              by    the        Department            of    State        Lands.        The
Department leases the land and the income derived therefrom
is     placed        in    trust           for    the       benefit      of    Montana          school
children.
         In March of 1981 the Standley Brothers acquired the
lease     on     Section             16.         In     April     of     1982,       the     Highway
Department began negotiating with the Standley Brothers to
acquire a portion of their leasehold interest.                                       At that time
the Standleys became aware that the proposed highway would
interfere       with           the    sprinkler             system      and    eliminate          some
irrigated land.                They requested that the proposed location be
moved.         The Highway Department acted on the request and
prepared        an    alternative                route      that would             move    the    road
approximately 100 feet west of the selected route.                                         After an
analysis        of    the       costs        involved,           the     Highway          Department
decided     in       favor       of        the        original        proposal.            This   was
unacceptable              to    the         Standleys,           and     resulted          in     this
condemnation action.
         The power             of the Highway Department to acquire an
interest in land which                       it cannot otherwise acquire at a
reasonable       price           is    provided             in   section       60-4-104, MCA.
Pursuant        to    that       statute              the   Department may            direct      the
Attorney General or any county attorney to institute eminent
domain proceedings in accordance with Title 70, chapter 30,
MCA.      Before the Department may direct such proceedings,
however, it must adopt an order declaring that:
         (a)     public              interest           and      necessity          require       the
construction or completion by the state of the highway or
improvement for one of the purposes set forth in section
60-4-103, MCA;
       (b) the interest described in the order and sought to
be condemned is necessary for the highway or improvement;
       (c) the proposed highway or improvement is planned or
located in a manner which will be most compatible with the
greatest public good and the least private injury.
       Once    the    Department   adopts        such an       order,    section
60-4-104(3), MCA, creates a disputable presumption,
       (a) of the public necessity of the proposed highway or
improvement;
       (b) that the taking of the interest sought is necessary
therefor;
       ( c ) that the proposed highway or improvement is planned

or located in a manner which will be most compatible with the
greatest public good and the least private injury.
       This Court has traditionally been extremely reluctant
to substitute its wisdom for that of an administrative agency
exercising discretionary powers pursuant to statute.                         State
Highway     Commission    v.    District     Court       of    First    Judicial
District (1938), 107 Mont. 126, 81 P.2d 347.                     This has been
particularly true where the Highway Department's decision to
condemn certain land has been challenged on the ground of
arbitrariness or abuse of discretion.               "There rests upon the
shoulders of one seeking to show that the taking has been
excessive or        arbitrary, a heavy           burden of proof            in the
attempt to persuade the court to substitute its judgment for
that   of     the    condemnor."         State    Highway       Commission      v.
Crossen-Nissen Co. (1965), 145 Mont. 251, 255, 400 P.2d 283,
285.    However, the disputable presumption in favor of the
Highway     Department,        created     by      the        order    directing
condemnation, can        be    overcome and        controverted        by    other
evidence.      State of Montana v. Higgins (1975), 166 Mont. 90,
530 P.2d     776.       In State Highway Commission v. Danielsen
(1965), 146 Mont. 539, 409 P.2d 443, this Court held that the

defendant property owner could overcome the presumption by
showing    clear     and    convincing proof       of    fraud,       abuse   of
discretion, or arbitrary action.
       In light of the foregoing, the following issues are
raised by this appeal:
       (1) Whether         the   proposed   taking      of   the      leasehold
interest is necessary for the authorized highway improvement?
       (2) Whether         the proposed     location     for the       planned
improvement was determined in a manner most compatible with
the greatest public good and the least private injury?
       (3)    Whether       defendant   should     have        been    awarded

necessary expenses for litigation?
       Sections 60-4-104 (2) (b) and 70-30-111 (2), MCA, provide
that land sought to he condemned by the Highway Department
must be necessary for the planned use or improvement.                         The
word "necessary" in this context has been interpreted on many
occasions by this Court.          In Butte, A.     &    P. Ry. Co. (1895),
16 Mont. 504, 541, 41 P. 232, 245, the following was quoted
from an Alabama opinion:
             "It may be observed generally that
             'necessary,' in this connection, does not
             mean   an   absolute   or   indispensable
             necessity, but reasonable, requisite, and
             proper for the accomplishment of the end
             in    view,    und.er   the    particular
             circumstances of the case."
Later cases used virtually identical language in interpreting
the   meaning   of    "necessary" as        used   in    the    above    named
statutes.     See, Montana Power Co. v. Bokma (1969), 153 Mont.
390, 457 P.2d 769; State Highway Commission v. Crossen-Nissen
Co.   (1965), 145 Mont. 251, 400 P.2d 283; and State Highway
Commission v. Yost Farm Company             (1963), 142 Mont. 239, 384
P.2d    277.      If     the    Highway   Department were          required to
demonstrate       absolute       necessity       before    it     could     win     a
condemnation action it would have very little discretion in
ch.oosing locations            for the public         roads; it is hard            to
imagine a road that could not have been rerouted or that
absolutely had to have been located in a given place.                             All
the evidence in this case indicates that the location of the
improved       road was     the    shortest, most         direct, and         least
expensive       route    which     was    consistent       with       the   design
objectives.        The planned location was therefore, reasonable,
requisite and proper to accomplish the improvement of the
highway.       Consequently the District Court properly found that
the    interest the Highway Department seeks to acquire is
necessary for the improvement.
        The question of a necessary location for a new highway
or improvement is best answered by engineers and designers.
Equally important, however, in determining location, is a.
consideration of the interests that may be disturbed.                         That
consideration falls under the statutory rubric of balancing
the    greatest    public       good    and    the    least private         injury.
Sections 60-4-104(3) (c), 70-30-110, MCA.                 We now turn to the
evidence to determine if the Highway Department followed this
statutory directive in the present case.
        The     record     discloses          very    brief     and     ambiguous
communications on the proposed improvement between the two
state agencies involved.            The proposed alignment of the road
was completed in April of 1978.                Prior to that time there was
a   very   informal meeting            between       representatives of           the
Highway Department and the Department of State Lands.                              A
preliminary      highway       alignment and         the proposed       sprinkler
system were       discussed..          The purpose of the meeting was
informational.        The representative from State Lands did not
have the authority to agree on behalf of that agency to the
proposed road alignment as it affected the land in question.
There    is    an    April     1978   letter    in    the   record   from   the
Administrator of the Division of Land Administration of the
Department of State Lands to the Division Engineer, Great
Falls Division, of the Montana Highway Department.                          That
letter indicates that State Lands had been working for two
years with the lessee of the school section in question on a
proposed irrigation project.              The letter further expresses
concern that there may be a conflict between the irrigation
project and the proposed road improvement.                      The Division
Engineer responded that the location phase of the improvement
was complete and submitted to the Helena office.                  Further, he
noted      that      the       informational      meeting      between      the
representatives of the two departments had resulted in a
mutual agreement on the proposed alignment of the highway and
that possible conflicts had been resolved.
         It is clear from the record that the Highway Department
was notified, prior to its completion of the location survey,
that     there      was    a   possible   conflict      between      the    road
improvement and a planned irrigation system on leased State
lands.     Despite this notice, there is no evidence that the
Highway       Department       appreciated     the     seriousness    of    the
conflict.      No systematic effort was made to discover whether
the proposed highway would interfere with planned irrigated
acreage.       Rather, the location survey apparently was pushed
through to completion on the vague assurances of an informal
meeting    that      all     problems   had    been   resolved.       Further,
nothing in the record indicates that the Highway Department
considered the possibility of private injury.                 The Department
is directed by statute to balance public good and private
injury in determining the location of r0ad.s and highways.                    In
this case, the State land in question was under private lease
during the entire period of improvement survey and location.
Moreover, in April of 1978, if not earlier, the Highway
Department was on notice that State Lands was working with
the lessee to develop the irrigation system.                   Despite this,
there is no evidence that the Department considered the
possibility    of    injury    to    this    private      interest     in    its
decision on final location of the highway.
         In State Highway Commission v. Danielsen (1965), 146
Mont. 539, 409 P.2d 443, this Court affirmed the District
Court's refusal to condemn land for a highway improvement,
holding that the selection of the location comprised an abuse
of   discretion      and    was     arbitrary.         There    were    three
alternative routes in Danielsen for the location of the
improvement.        Though one of the routes was not carefully
investigated,       it    appeared    that    all    three     routes       were
virtually identical in terms of public cost.                   If this were
true, the Court reasoned, then the final choice should be
made based on least private injury.               In Danielsen, however,
the Highway Department selected a route that would                          have
involved much greater private injury than alternative routes.
This despite the fact that the public cost of the alternate
routes was virtually the same.           Such a selection was held to
be an abuse of discretion and arbitrary.             In the present case
the Highway Department, prior to completing its improvement
location, failed to consider the possibility of alternate
routes equal in terms of public good.               This is difficult to
understand in light of the fact that the Department was aware
of   a   potential       conflict with      the   route    selected.          In
addition, since the Department did not even consider private
injury, it obviously did not investigate whether an alternate
route would reduce private injury.             The lesson of Danielsen
was expressed succinctly in Montana Power Company v. Bokma

(19691,    153    Mont.     390,   399-400,        457   P.2d   769,    775:
". . . when     the condemnor fails to consider the question of
the least private injury between alternate routes equal in
terms of public good, its action is arbitrary and amounts to
an abuse of discretion."           Accord, Schara v. Anaconda Co.
(1980), 187 Mont. 377, 610 P.2d 132.
        The Highway Department argues that it considered an
alternate route but calculated that the cost of such route
would far outweigh the cost of any private injury created by
the original alignment.        However, an alternate route was not
considered until the lessee objected to the original proposal
as destructive of some irriga.ted acreage.                 This was four
years after the original location was completed, and four
years   after    the     Department   became    aware     of    a   possible
conflict with that location.             The evidence is that the cost
differential between the alternate route and the original
route is due mainly to redesign and resurvey costs, as well
as costs of delay.          The differential in actual costs of
construction     between    the    two    routes    appears     negligible.
Similarly, there is no evidence that the alternate route
would be less safe, or appreciably less convenient to the
travelling public.        It is no doubt true that, at the present
time, to construct the improvement using the alternate route
will be more expensive than following the original proposal.
However, we cannot agree to the condemnation of productive
farmland   based    on    comparative cost estimates when              those
estimates would have been entirely different had the Highway
Department initially planned the improvement based on the
criteria of greatest public good and least private injury.
Accordingly we reverse and direct the Highway Department to

consider whether       there is an alternate route, reasonably
equal    in    terms   of     public   good,     that   would     avoid   the
destruction of irrigated acreage on the school land leased by
defendants.      Only actual construction costs of the alternate
route are to be considered, not those costs created by the
failure to consider an alternate route in the first instance.
        The Standley Brothers moved            the trial court for an
order    awarding      them    necessary    expenses      of      litigation,
including     reasonable and      necessary      attorney      fees, expert
witness fees, exhibit costs and court costs, under Article
11, Section 29 of the Montana Constitution, which mandates:

              "Private property shall not be taken or
              damaged for public use without just
              compensation to the full extent of the
              loss having been first made to or paid
              into court for the owner. In the event
              of litigation, just compensation shall be
              awarded by the court when the private
              property owner prevails."
        Conditions precedent to recovery of necessary expenses
of litigation are set forth in the following cases:                  Bozeman
Parking Commission v. First Trust Co. (Mont. 1980), 619 ~ . 2 d
168, 37 St.Rep. 1610; Callant, Josephson            &   Kolberg v. Federal
Land Bank      (1979), 181 Mont.       400, 593 P.2d      1036; Rauser v.
Toston Irrigation Dist. (1977), 172 Mont. 530, 565 P.2d 632;
State ex re1 Dept. of Highways v. Arthur Olsen (19751, 166
Mont. 139, 531 P.2d 1330.
        In Bozeman Parking Co~mission,supra, it is noted that,
"Under    the    constitutional        clause,    there     are    only   two
conditions necessary to entitle the condemnee to liti-aation
expenses.       They are      (1) litigation, and         (2) the private
property owner prevailing."   619 P.2d   at 171.   Clearly, both
conditions are met in this case.
      The judgment of the District Court is reversed and the
case remanded to determine legal fees and costs.




We concur:   /
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