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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