author: MR. JUSTICE HARRISON MR. JUSTICE GULBRANDSON,

text:
    GARY A. LARSON, Claimant and Respondent, v. SQUIRE SHOPS, INC., Employer, and Industrial Indemnity Company, Defendant and Appellant.
    No. 87-61.
    Submitted on Briefs Aug. 13, 1987.
    Decided Sept. 15, 1987.
    742 P.2d 1003.

      Marra, Wenz, Johnson & Hopkins, David E. Bauer, Great Falls, for defendant and appellant.
    Milodragovich, Dale & Dye, Lon J. Dale, Missoula, for claimant and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This appeal arises from a final judgment entered by the Workers’ Compensation Court of the State of Montana. Both parties appeal an award of domiciliary care. We return this cause to the Workers’ Compensation Court to conform with our opinion.

This appeal concerns an award of domiciliary care issued by the Workers’ Compensation Court (WCC) to the claimant, Gary Larson. Gary is a twenty-seven year old married male with two step children. He was injured in a February 1983 automobile accident while in the course and scope of his employment as an assistant manager for the Squire Shop, a Missoula retail clothing store. As a result of the accident, Gary suffered a traumatic blow to the head which, in conjunction with a resulting subdural hematoma, caused permanent brain injury. His resultant disabilities render Gary permanently disabled. Industrial Indemnity Company, workmen’s compensation insurer for the Squire Shop, agrees that Gary is permanently totally disabled.

It is agreed on all sides that Gary’s injuries are serious. He continues to experience disabilities of memory, thinking, motivation and, at times, vision. Significantly, Gary also suffers emotional instability or difficulty in maintaining emotional control. Because of these disabilities, Gary has experienced difficulty in handling everyday situations and has required some supervision.

Since his release from the hospital on March 3, 1983, Gary has resided with his family at their residence in Clinton, Montana. Since that date, Gary’s wife, Candice, has taken over the primary care of Gary. The primary issue upon appeal is whether, under the workers’ compensation laws of this state, Industrial Indemnity is obligated to pay for the services provided by Candice. For the sake of consistency, we will refer to Candice’s services as domiciliary care.

This case was first presented to the WCC in May 1985. Though this first hearing concerned issues unrelated to this appeal, it was at this juncture that the WCC raised the issue of domiciliary care. In its findings and conclusions dated August 22, 1985, the WCC noted that Candice’s domiciliary care might be compensable and instructed the parties to brief the issue.

On November 4, 1985, the WCC entered its judgment on the issue of domiciliary care. Of primary significance was the court’s finding that Gary has required twenty-four hour a day care since his release from the hospital. The court further found that Candice had been providing this around the clock care and that under the laws of this state, Industrial Indemnity was obligated to pay for Candice’s domiciliary care. Based on testimony, the WCC found that a reasonable rate of compensation for this care was $7.00 per hour. Thus, the WCC held that Industrial Indemnity was liable, at the rate of $7.00 per hour, twenty-four hours a day, for the domiciliary care provided by Candice since March 3, 1983, and would remain liable for all future care provided by Candice so long as it was required. Finally, the WCC found that to provide a respite for Candice, a personal care attendant should be appointed to care for Gary on the average of 28.74 hours per week. Candice would care for Gary the remaining 139.26 hours per week.

Following rehearing, the WCC amended somewhat its judgment. Noting that the issue of domiciliary care had not been raised until August 22, 1985 — the date of the first hearing — the court held that Industrial Indemnity should not be held liable for payment prior to that date. Industrial Indemnity therefore became liable for this care from the date the issue was first raised, rather than the date of Gary’s release from the hospital.

Both parties now appeal. Industrial Indemnity (hereinafter insurer) contests the award of domiciliary care provided by Candice. Gary (claimant) challenges the court’s change of the starting date for compensable domiciliary care.

Montana’s medical benefit provision under the Workers’ Compensation Act is Section 39-71-704, MCA, which states in part:

“(1) In addition to the compensation provided by this chapter and as an additional benefit separate and apart from compensation, the following shall be furnished:
“(a) After the happening of the injury, the insurer shall furnish, without limitation as to length of time or dollar amount, reasonable services by a physician or surgeon, reasonable hospital services and medicines when needed, and such other treatment as may be approved by the division for the injuries sustained.”

In Carlson v. Cain (Mont. 1985), [216 Mont. 129,] 700 P.2d 607, 614-15, 42 St.Rep. 695, 703-04, this Court affirmed a decision of the WCC which recognized that under this statute domiciliary care provided by a member of an injured employee’s family might be compensable as “such other treatment.” Today, we reaffirm that decision. We note that this appears to be the majority position, see 2 A. Larson, Workman’s Compensation Law, Section 61.13(d)(2) (1986), and believe it is correct as a matter of law.

In Carlson, we quoted with approval a five-step test used by the WCC to determine whether “services provided in the home are compensable.” Pursuant to this test, an insurer is liable for domiciliary care if:

“(1) The employer knows of the employee’s need for need for medical services at home resulting from the industrial injury;
“(2) the preponderance of credible medical evidence demonstrates that home nursing care is necessary as a result of accident, and describes with a reasonable degree of particularity the nature and extent of duties to be performed by the family members;
“(3) the services are performed under the direction of a physician;
“(4) the services rendered are of the type normally rendered by trained attendants and beyond the scope of normal household duties; and
“(5) there is a means to determine with reasonable certainty the approximate value of the services performed.”

Carlson, 700 P.2d at 614.

I

Applying these factors, insurer contends that the WCC award of domiciliary care was (1) premature, (2) unsupported by substantial credible evidence, and (3) unreasonable.

A

Insurer initially argues that the award of domiciliary care was premature. After the issue of domiciliary care had been raised, insurer requested, and ultimately obtained, permission to schedule an independent medical examination at University Hospital in Seattle, Washington. During March-April 1986, the staff at the Department of Rehabilitation Medicine at University Hospital conducted a comprehensive, two-week examination of claimant. The stated purpose of that examination was to obtain a second opinion on the status of claimant in terms of his need for domiciliary care.

The Seattle staff was unable to posit any precise opinion as to the amount of domiciliary care required by claimant. Rather, the Seattle group concluded that before any conclusive determination on this issue could be reached, two recommendations should be implemented:

“(1) Modification in the medicines given claimant; and
“(2) a comprehensive rehabilitation program (to be initiated after the medication modification had been completed).”

Insurer accordingly argues that based on the Seattle report; claimant may “improve” to the point where domiciliary care is perhaps even unnecessary. Thus, concludes the argument, any determination of domiciliary care cannot be reached until the Seattle group’s recommendations have been attempted. Applying this argument to our Carlson test, insurer highlights the second factor and asserts that the preponderance of the credible medical evidence does not demonstrate the necessity of domiciliary care. Rather, the weight of the evidence demonstrates that such a decision was premature.

Balanced against the conclusions of the Seattle staff are the recommendations of Drs. Susan Bertrand and Patricia Webber. Dr. Bertrand is a psychiatrist who specializes in rehabilitative medicine. She practices in Missoula, and has been involved in claimant’s case since November 1983. Dr. Webber, also of Missoula, is a psychologist specializing in rehabilitative psychology and has treated claimant since March 1983. Both doctors testified that claimant requires twenty-four hour a day supervision.

Thus, we are faced with conflicting evidence on this issue. We note that since most of the critical evidence presented on this issue was entered by deposition, this Court is considered to be in as good a position as the WCC to judge the weight to be given such testimony. Shupert v. Anaconda Aluminum Co. (Mont. 1985), [215 Mont. 182,] 696 P.2d 436, 439, 42 St.Rep. 277, 281-82.

Our reading of the record persuades us that the preponderance of the credible medical evidence demonstrates that an award of domiciliary care was warranted in this case. We base this conclusion on several factors.

First, this award was supported by the recommendations of Drs. Bertrand and Webber, the two doctors who have had the longest association with claimant’s case. While we recognize the excellence of the Seattle staff, we must also recognize that those doctors examined claimant for only two weeks, albeit intensively, and conducted the examination in a controlled environment.

By contrast, Drs. Bertrand and Webber have each treated claimant since 1983 and have enjoyed the opportunity to witness claimant adapting to his everyday environment. In short, the record reveals that Drs. Bertrand and Webber have had a much more extensive association with claimant’s case.

This fact was acknowledged by the Seattle staff. While the members of the Seattle group may have had reservations about the need for domiciliary care, in the end they deferred to the opinions of Drs. Bertrand and Webber because of the latters’ long-term relationship with claimant. Dr. David Shuster, claimant’s resident physician on the Seattle staff, admitted that Dr. Bertrand is in a better position to evaluate claimant’s condition. Representative of the Seattle staff’s conclusions on the necessity of domiciliary care was this statement by Dr. Justice Lehmann, Chairman of the Department of Rehabilitation at University Hospital and attending physician to claimant during claimant’s examination, when asked if claimant requires twenty-four hour a day care:

“No, I don’t have any opinion because I really don’t know. I think it is highly unlikely that he needs twenty-four-hour-a-day care but I don’t have any factual basis for that, that I can say he does need it, or he doesn’t need it and how much he needs it.”

In essence, we find more persuasive the specific recommendations of the doctors who have worked the longest and most closely with the claimant.

Second, even if the Seattle staff’s recommendations are implemented, it is disputed whether the necessity of domiciliary care would be abated. Dr. Lehmann testified he could not predict the ultimate effect of the implementation of these recommendations. And while Dr. Vernon Neppe, neuropsychiatrist with the Seattle team, predicted very favorable results, Dr. Bertrand stated that even if successful, these recommendations would probably not change claimant’s need for domiciliary care. Dr. Bertrand stated:

“I don’t think that those drugs [recommended by the Seattle staff], if they were used and were used successfully, would affect the amount of domiciliary care he requires. After reviewing Dr. Neppe’s deposition, as well as his report, those — and having conferred with one of our local psychiatrists who is very familiar with the use of those medications in persons with organic brain syndrome, those [drugs] are for control of his emotional outbursts, and if they were successful, that would make Gary’s life more comfortable. However, Gary’s other problems would continue to exist and those are problems with abstract reasoning, with short-term memory, because those are not — those don’t have anything to do with the emotional system that Propranolol or the Tegretol, Carbamazepine, would affect. It would not affect his need for supervision.”

Finally, we must note that any benefit which might result from implementation of the Seattle team’s recommendations would be offset, to some degree, by the detrimental effects of continued litigation. As the WCC noted, medical personnel involved with this case have repeatedly stressed that uncertainty, caused in part;by this lengthy litigation, produces definite negative effects on claimant.

In sum, for the reasons stated, we find the preponderance of the credible medical evidence demonstrates that domiciliary care is necessary as a result of the accident.

B

Insurer next argues that this domiciliary care award is not supported by substantial credible evidence. While acknowledging the injuries suffered by claimant, insurer contends claimant has retained capabilities that belie a need for twenty-four hour a day care.

We cannot accept insurer’s argument in full. Dr. Bertrand testified that claimant’s physical abilities may make care even more difficult:

“[w]hen you consider how physically active Gary is and how physically well he appears, that he is capable of doing lots of things, but not doing them in a safe or organized fashion. And he really requires someone else providing his overall thinking ability. He needs someone monitoring his level of tiredness, and to do it requires input from another individual to maintain him. Especially, with his emotional ability and his ability of not understanding situations he gets himself into trouble. He really requires looking after and that absorbs the time of another, and in this case, usually Candy. So that even though he’s totally impaired, he’s even more impaired when that means that he absorbs time and energy from someone else.”

While it is agreed that claimant need not be supervised every minute, the record supports the conclusion that during the day someone must constantly be available to him. Stated Dr. Bertrand:

“Not everyone who is supervised every minute needs intervention every minute. But it’s the unpredictable nature of the need that demands that there be someone available to meet the need when it arises.”

As the WCC correctly noted, it is this constant availability that must be compensated. In Texas Employer Insurance Association v. Choate (Tex.App. 1982), 644 S.W.2d 112, an insurer argued that a claimant’s spouse should only be compensated for the actual time she spent caring for her husband. In rejecting that argument, that court stated:

“The more practical problem with the argument is that it ignores the realities of the situation. Mrs. Choate cannot set aside 40 minutes a day, take care of Choate and then go on to other things. She must be available to meet his need during the entire time he is at home and awake. As the company’s own witness admitted, a third person hired to do what Mrs. Choate does could not be hired or compensated on the 40 minutes per day basis now advanced by the company; instead such a person would be hired by the day or the week and paid for the time during which he or she is available, not just the time spent actually helping Choate.”

Choate, 644 S.W.2d at 116. Accord, Standard Blasting & Coating v. Hayman (Fla.App. 1985), 476 So.2d 1385, 1387; Brown v. Eller Outdoor Advertising Company (Mich. App. 1982), 314 N.W.2d 685, 688. We conclude there is substantial evidence to support the court’s finding.

C

Finally, insurer asserts that the $7.00 per hour rate of compensation fixed by the WCC is unsupported by substantial credible evidence. We disagree. This rate was based upon the testimony of Linda Geiger, a care management services nurse who supervises the Care Management Department at Community Hospital in Missoula. In her position, Linda assesses disabled patients and determines the scope and breadth of services required by these patients. She appears to be very well qualified to assess the need for, and cost of, domiciliary care and her testimony provides ample evidence in support of the WCC’s decision.

II

Finally, claimant contends the lower court’s determination that insurer is liable for this domiciliary care not from the date of claimant’s release from the hospital but from the date this issue was raised by the WCC is incorrect.

We have had difficulty with this issue. The first step of the Carlson test requires that the employer know of the employee’s need for medical services at home. Some courts faced with this issue have imputed a type of constructive notice upon an employer, either because of the severity of the industrial injury or because a representative of the employer had knowledge that domiciliary care would be required. See Balsano v. Fischer Body Division, General Motors Corporation (Mo.App. 1972), 481 S.W.2d 536; Stephens v. Crane Trucking, Inc. (Mo. 1969), 446 S.W.2d 772. While these cases can be distinguished, we agree that an employer may be put on notice of the employee’s need for medical services because of the severity of injury. Need for domiciliary care must be supported by medical evidence, and we find it is.

We believe such is the situation in this case. Given the unquestioned severity of the injury, the degree of medical attention claimant required while in the hospital and the permanence of the resulting disabilities, we find that the employer had notice of claimant’s need for home nursing services at the date claimant was released from the hospital. We accordingly hold that Candice’s domiciliary care should be compensated from March 3, 1983.

We remand this case to the WCC for an order consistent with this opinion.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, SHEEHY, HUNT and McDONOUGH concur.

MR. JUSTICE GULBRANDSON,

dissenting in part:

I concur with all of the foregoing opinion except the extension of the Carlson opinion to now impute constructive notice of the need for medical services at claimant’s residence.

I would not make the award for domiciliary care retroactive, but would affirm the Workers’ Compensation Court Judge on this issue.

FOOTNOTES

      . Insurer does not contest the appointment of a personal care attendant.

      . This test is a slightly modified version of the factors set forth in Warren Trucking v. Chandler (Va. 1981), 277 S.E.2d 488, 493.

      . In raising this point, we must point out that Dr. Bertrand enjoyed a three-year residency in physical medicine and rehabilitation at University Hospital.


source: Caselaw Access Project

author: MR. JUSTICE HARRISON

license: Public Domain

text:
    MAXINE H. BYRNE, and J. Michael Byrne, co-personal Representatives of the Estate of James Byrne, Plaintiffs and Appellants, v. TERESA M. TERRY, Defendant and Respondent.
    No. 87-51.
    Submitted on Briefs July 30, 1987.
    Decided Sept. 16, 1987.
    741 P.2d 1341.
    Milodragovich, Dale & Dye, Kim L. Ritter, Missoula, for appellant.

      Garnaas, Hall & Pinsoneault, H.L. Garnaas, Missoula, for respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

Maxine Byrne and J. Michael Byrne, acting as co-personal representatives of the estate of James Byrne, appeal a judgment of the Fourth Judicial District' in and for the County of Missoula that awarded the estate $42,000 in commission fees as detailed in a note signed by Teresa Terry but that specifically refused to award interest. The judgment was issued September 8, 1986; the memorandum refusing to reconsider the question of an award of interest was issued December 8, 1986.

We affirm in part and reverse in part. We remand the matter to the District Court for proceedings to award interest.

James Byrne served as a realtor for Terry when she entered into a contract for deed on November 6, 1978 to buy some 400 acres of property in Ravalli County. In that contract she agreed to pay James Byrne’s commission. She signed a handwritten note on May 28, 1979 in which she agreed to pay James Byrne $42,000 in commission from the resale of parcels of the acreage. One clause of the note said James Byrne would not charge Terry interest. The relevant portion of the note reads:

“[w]hereas J. Byrne has requested at this time a note be signed for a total of Forty-two Thousand and no/100 dollars ($42,000.00), comprised-of seven (7%) of the total sales-price-ef-six hundred thousand dollars ($600,000); and whereas J-Byrne has stated there will be no interest charged; and whereas J. Byrne has stated that payments of this commission will be made from the assigning of portions of the funds received from the sales of parcels of the purchased property; I therefore promise to pay Forty-two Thousand and no/100 dollars ($42,000.00) as set forth above.”
s/Teresa M. Terry
(Lineouts appear on the original.)

On September 24, 1979, Terry sold 352 acres of the property. Terms were $50,000 payable on that date, $100,000 due on January 31, 1980 and the remaining $450,000, subject to 8V2% interest, due January 1, 1990. Terry transferred her remaining interest on May 16, 1980 pursuant to an agreement that required the transferees to assume all of Terry’s obligations, including the resolution of a claim for $42,000 in commission fees by the James Byrne estate. (James Byrne had died October 30, 1979.) Terry retained 19 acres as security that the transferees would settle the claim. The co-personal representatives, ignorant of the attempted transfer of the obligation, presented the note to Terry. When she refused to honor it, this litigation arose.

The District Court, sitting without a jury, heard the evidence on February 24, 1986. The court found that the writing signed by Terry was a promissory note demonstrating an obligation to pay $42,000 as commission fees when the acreage was resold. It found that substantially all of the property was resold on September 24, 1979 and that Terry received $50,000 in partial consideration of that sale on that date. The court concluded that the note became payable on September 24, 1979 because of the resale of the property, and entered judgment accordingly.

The co-personal representatives moved for reconsideration of the matter in order to obtain interest on the debt. They claimed they were due 8% interest per year as spelled out in a preprinted, typewritten note that had not been presented into evidence and did not contain Terry’s signature. Otherwise, they claimed they still would be entitled to the statutory rate of interest.

Terry also asked the court to reconsider its findings of fact and conclusions of law. She argued to the District Court that plaintiff had failed to prove that she had received any payments on the November 1979 contract or that the proceeds of that contract were intended to pay the $42,000 commission. She now adds the argument that the commission fee is not due since the final payments on the November 1979 contract are not due until January 1990.

The District Court denied the motions to reconsider. In its memorandum of December 8, 1986, the court discounted the provisions of the note referred to by the co-personal representatives. The court wrote:

“There was no copy of the note attached to the Motion. However, referring to the copy of the note which is an exhibit, there is no mention whatsoever of interest except a provision ‘. . . and whereas J. Byrne has stated there will be no interest charged,’. . . The note is payable upon the happening of a contingency and therefore is not payable at a date certain.”

The question of whether interest is appropriate may be resolved through the examination of several statutes, Sections 27-1-211, 27-1-312, and 31-1-106, MCA. These statutes indicate that interest was owed and should have been awarded. Co-personal representatives of the estate base their claim on Section 27-1-211, MCA, which reads:

“Every person who is entitled to recover damages certain or capable of being made certain by calculation and the right to recover which is vested in him upon a particular day is entitled also to recover interest thereon from that day except during such time as the debtor is prevented by law or by the act of the creditor from paying the debt.”

A party must satisfy three criteria to be eligible for prejudgment interest under Section 27-1-211, MCA. Those criteria are (1) an Underlying monetary obligation; (2) the amount of recovery is certain or capable of being made certain by calculation; and (3) the right to recover the obligation vests on a particular day. Agrilease Inc. v. Gray (1977), 173 Mont. 151, 160, 566 P.2d 1114, 1118-19. The three criteria were satisfied in Agrilease even though the obligation was not due on a specific date, but rather when an irrigation system was completed. Thus, the three criteria are satisfied in the case before this Court: the underlying monetary obligation of $42,000 was due and payable on the day that Terry entered into a contract to sell the acreage.

That Terry disputes she was responsible for the obligation when the Byrne estate presented the note does not save Terry. The fact that a claim is disputed does not make it uncertain and thus unable to support an award of prejudgment interest. Safeco Insurance Co. v. Lovely Agency (Mont. 1985), [215 Mont. 420,] 697 P.2d 1354, 1357, 42 St.Rep. 509, 513. Terry’s assertion that the right to recover did not vest in the Byrne estate because there was no date specified is untenable. The date for payment of the debt was specified as the date on which parcels of property were sold, and that date arose September 24, 1979, when the bulk of the property was sold. Thus, it constitutes a date certain. Agrilease, 566 P.2d at 1118; Safeco, 697 P.2d at 1357.

When the debtor knows of his debt and also knows when it is due, “no demand is necessary to start the running of interest from the date the payment should have been made.” W.J. Lake & Co. v. Montana Horse Products Co. (1939), 109 Mont. 434, 443, 97 P.2d 590, 594, citing 33 C.J. 237 note 61 (now 47 C.J.S. Interest Section 46c). Therefore when Terry sold the bulk of the property on September 24, 1979, she triggered Section 27-1-211, MCA. On that date she owed the Byrne estate $42,000 and she did not pay it. No demand was required by the Byrne estate to enforce her obligation on that day. Thus, it makes no difference whether Terry delegated her duty to pay the commission in May 1980 since she was required by her actions of September 24, 1979 to pay the commission.

The rationale behind Section 27-1-211, MCA, is well summarized in Price Building Services, Inc. v. Holms (Mont. 1985), [214 Mont. 456,] 693 P.2d 553, 559-60, 42 St.Rep. 85, 92, which states that prejudgment interest is to be awarded unless either the law or the creditor prevents the payment of principal. Neither the force of law nor the acts of the Byrne estate prevented Terry from paying the $42,000 commission fee; she simply refused to honor her obligation.

“[Section] 27-1-211, MCA, is not a discretionary statute. Rather, it mandates interest as long as the legal situation fits within the broad guidelines of the statute. Determining whether a cause of action fits within the framework of the statute, particularly the question of whether the claim is determined or can be determined by calculation, is not always an easy one. However, the overriding purpose of the statute can be best preserved if it is remembered that its purpose is to fully compensate the injured party for the loss of use of his money during the period in which a valid claim was not paid. We believe . . . that the objective of fully compensating the injured party, and that is the primary objective of the prejudgment interest statute, should predominate over other equitable considerations. If the legislature has chosen to provide a right to prejudgment interest (Section 27-1-211), the primary objective of the courts, where possible, should be to award prejudgment interest.”

Price Building Service, Inc., 693 P.2d at 559-560.

We reaffirm the notion that the “primary objective” of Section 27-1-211, MCA, is to fully compensate the party who has been deprived of funds that are rightfully his. This is corroborated by statute. Section 27-1-312, MCA, provides that the remedy for a breach of an obligation to pay money is “the terms of the obligation with interest thereon.” The appropriate interest to be charged of Terry on her obligation is ascertainable from Section 31-1-106, MCA. That section prescribes interest of 6% from the date of breach thereafter to October 1,1985, when Section 31-1-106, MCA, was amended to provide for interest at the rate of 10%.

We affirm the District Court’s September 8, 1986 judgment awarding $42,000 to the Byrne estate. However, we reverse that court’s order of December 8, 1986 refusing interest. We remand the Byrne estate’s request for interest to the District Court for proceedings consistent with this opinion.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES SHEEHY, GULBRANDSON and HUNT concur.


author: MR. JUSTICE SHEEHY

text:
    JOHN L. PETERSEN and Montana Oil & Minerals Corporation, a Montana corporation, Plaintiffs and Respondents, v. R.G. “RICK” TUCKER, Doug James, and Andrea Bennett, State Auditor, State of Montana, Defendants and Appellants.
    No. 87-206.
    Submitted on Briefs July 14, 1987.
    Decided Sept. 17, 1987.
    742 P.2d 483.

      Michael J. Mulroney, Helena, for defendants and appellants.
    Karl J. Englund, William A. Rossbach, Missoula, for plaintiffs and respondents.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Defendants appeal from an order of the District Court, Fourth Judicial District, Missoula County, denying their motion for a change of venue from the District Court in Missoula County to Lewis and Clark County.

The issue on appeal is whether venue was properly found in Missoula County.

This case arises out of a cease and desist order issued to the plaintiffs by the State Auditor’s office, Securities Department. The plaintiffs allege that as a result of the cease and desist order being issued, they were the object of tortious conduct and that their civil rights were violated resulting in injury.

Plaintiffs resided in Missoula County and the defendants resided in Lewis and Clark County at the time the order was issued.

Plaintiffs brought this action against the defendants in Missoula County. Appellants filed a number of motions including a motion for change of venue to Lewis and Clark County, and a motion to dismiss the State as a party. On April 2,1987, the District Court denied the defendants’ motion for change of venue and did not rule on the motion to dismiss the State as a party. The defendants appeal from the District Court order denying their motion for change of venue. We find that the District Court was correct in its determination that venue was properly found in Missoula County.

This Court has addressed the issue of venue on numerous occasions and the rules regarding venue are well settled and can be easily discerned by a quick review of the Montana statutes and Montana case law.

Appellants maintain in their brief that venue should be changed as the county designated in the respondents complaint, Missoula County, is not the proper county. The right of the defendant to move for change of place of trial is found in Section 25-2-114, MCA, which provides:

“Right of defendant to move for change of place of trial. If an action is brought in a county not designated as the proper place of trial, a defendant may move for a change of place of trial to a designated county.”

Section 25-2-201, MCA, details when a change of venue is required:

“The court or judge must, on motion, change the place of trial in the following cases:
“(1) When the county designated in the complaint is not the proper county;
“(2) When there is reason to believe that an impartial trial cannot be had therein;
“(3) When the convenience of witnesses and the ends of justice would be promoted by the change.”

Platt v. Sears, Roebuck & Co. (Mont. 1986), [222 Mont. 184,] 721 P.2d 336, 43 St.Rep. 1160.

Appellants contend that venue should be changed to Lewis and Clark County as the general rule regarding venue is that venue is proper in the county where the defendants reside. Platt v. Sears, Roebuck & Co., supra.

Although the appellants have correctly stated the general rule, as Section 25-2-118, MCA, indicates, the code does not confer venue exclusively to the county of the defendants’ residence.

The statute controlling venue in actions against the state, including the instant case is Section 25-2-126(1), MCA, which provides:

“The proper place of trial for an action against the state is in the county in which the claim arose or in Lewis and Clark County. In an action brought by a resident of the state, the county of his residence is also a proper place of trial.”

The appellants contend that the State is not a proper party to this action and as such the venue for this proceeding properly lies in Lewis and Clark County under Sections 25-2-118, and 25-2-122, and/or 25-2-125, MCA. Appellants assert that this Court should dismiss the State as a party in this action alleging that the question of venue would then have but one resolution, that being Lewis and Clark County.

This Court will not address the issue of whether the State is a proper party in this action. We find the record clear on this point as the State is specifically named in the respondents’ complaint as a party and has not been dismissed from the action. Venue must be determined on the basis of the complaint. Johnson v. Clark (1957), 131 Mont. 454, 461, 311 P.2d 772, 776. Further, only the matter of venue can be disposed of by the reviewing court when dealing with an appeal from an order granting or denying venue. Conway v. Fabian (1936), 103 Mont. 574, 63 P.2d 1022. In Guthrie v. Montana Department of Health and Environmental Sciences (1977), 172 Mont. 142, 146, 561 P.2d 913, 915, and Ford v. Montana Department of Fish, Wildlife (Mont. 1984), [208 Mont. 132,] 676 P.2d 207, 209, 41 St.Rep. 220, 222, this Court cited with approval Regents of University of California v. Superior Court (1970), 3 Cal.3d 529, 91 Cal.Rptr. 57, 61, 476 P.2d 457, 461, in which the California Supreme Court held:

“The underlying purpose of statutory provisions as to venue for actions against State agencies is to afford the citizen a forum that is not so distant and remote that access to it is impractical and expensive. To that end, such provisions should be liberally construed in favor of the private litigant.”

This Court in Billings Associated Plumbing v. Emerson (1977), 172 Mont. 369, 372, 563 P.2d 1123, 1125, held that venue provisions relating to actions against state agencies should be liberally construed in favor of private litigants.

Clearly in the instant case venue was properly found in Missoula County. The plaintiffs are residents of the State of Montana and the county of their residence is a proper venue Section 25-2-126(1), MCA; Section 25-2-115, MCA. As such the appellants have no right to have the venue changed under Section 25-2-201, MCA. The fact that venue would also be proper in Lewis and Clark County is of no import. In State v. Security State Bank (1979), 184 Mont. 461, 464, 603 P.2d 681, 683, this Court held where proper venue has been chosen:

“. . . [t]he courts are powerless based upon the residence of the parties, to transfer the cause to another venue although the other venue itself may also have been proper for the commencement of the action.”

Appellants point out that in McAlear v. Kasak (Mont. 1987), [225 Mont. 113,] 731 P.2d 908, 910, 44 St.Rep. 81, 83, this Court stated “[w]e have never held that a plaintiff has an absolute choice of forum . . . where plaintiffs file the action in an improper county, the defendants may change venue to any proper county.” However, once an action has been filed in a proper county the District Court cannot grant a motion to have it removed. Seifert v. Gehle (1958), 133 Mont. 320, 322, 323 P.2d 269, 270.

As we have previously stated, venue was properly found in Missoula County. The District Court was precluded from granting the defendants’ motion for change of venue and acted appropriately in denying the motion.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER and GULBRANDSON concur.


author: MR. CHIEF JUSTICE TURNAGE

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. RICHARD LEE TOME, Defendant and Appellant.
    No. 86-314.
    Submitted on Briefs May 28, 1987.
    Decided Sept. 17, 1987.
    742 P.2d 479.

      John Keith, Great Falls, for defendant and appellant.
    Mike Greely, Atty. Gen., Judy Browning, Asst. Atty. Gen., Helena, Patrick L. Paul, Co. Atty., Great Falls, Steve Hagerman, Deputy Co. Atty., for plaintiff and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Defendant Tome appeals a bench conviction for burglary and criminal mischief in the Eighth Judicial District, Cascade County. On April 11,1986, Tome was sentenced to a prison term of ten years for burglary and ten years for criminal mischief, to run concurrently. Tome was also sentenced to ten years as a persistent felony offender, to run consecutively.

Tome presents two issues for our review:

1. Does substantial evidence support Tome’s conviction?

2. Did Tome receive effective assistance of counsel?

In the early evening of March 27, 1985, the clubhouse of the Anaconda Hills Golf Course in Great Falls was forcibly entered. Money was taken from a cash register and a vending machine. Damage to the vending machine was $359, while the clubhouse received $191 worth of damage.

The investigation by the Cascade County sheriff led to defendant Tome. On March 30, 1985, a deputy brought Tome to the sheriff’s office where he was advised of his Miranda rights. Based on Tome’s admissions and other witness interviews, Tome was charged with the crimes and arraigned on April 30, 1985.

Issue 1

Does substantial evidence support Tome’s conviction?

On March 18, 1986, the District Court found Tome guilty of burglary, as defined in Section 45-6-204(1), MCA, and criminal mischief, a felony as defined in Section 45-6-101(l)(a), MCA.

Tome contends that the only evidence supporting burglary is his oral admission, which he subsequently denied at trial. Tome asserts that the circumstantial evidence can be interpreted as supporting either guilt or innocence and was therefore insufficient to establish guilt beyond a reasonable doubt.

Our standard of review on issues of substantial evidence is that a conviction cannot be overturned if the evidence, when viewed in a light most favorable to the prosecution, would allow a rational trier of fact to find the essential elements of the crime beyond a reasonable doubt. State v. Kutnyak (Mont. 1984), [211 Mont. 155,] 685 P.2d 901, 910, 41 St.Rep. 1277, 1289.

Our review of the record convinces us that substantial evidence supports Tome’s conviction. At trial, an employee of the Black Eagle Community Center testified that Tome was in the Center near the time of the break-in. The Center is located one block from the clubhouse, on the opposite side of the street. Tome attempted to buy some drinks but did not have enough money. Tome then left for about thirty minutes and returned with a “bunch of nickels and dimes.”

An employee of the golf course testified that he saw a car, which matched the description of Tome’s car, parked outside the front gate of the golf course near the time of the break-in. Two deputies testified that Tome admitted to the burglary after being advised of his Miranda rights but prior to requesting an attorney.

Tome further contends that the evidence does not support a conviction of criminal mischief because the only loss sustained by the city was the $191 damage to its clubhouse. Tome’s contention fails. The vending machine was leased to the golf professional, who was an employee of the city. The machine was located on city property. The State properly introduced a repair bill for $359, which itemized the damage to the machine. The professional maintained possessory control of the machine and was personally responsible for any repair costs. As we held in State v. Holmes (Mont. 1984), [212 Mont. 526,] 687 P.2d 662, 666, 41 St.Rep. 1535, 1539, mere possession of the property is sufficient to show ownership in a property crime. Section 45-2-101(46), MCA.

In conclusion, the evidence in Tome’s trial was primarily circumstantial, there being no witnesses to the actual burglary. When circumstantial evidence is susceptible to two interpretations, one which supports guilt and the other which supports innocence, the trier of fact determines which is the most reasonable. State v. Atlas (Mont. 1986), [224 Mont. 92,] 728 P.2d 421, 423, 43 St.Rep. 2042, 2044. Viewed in a light most favorable to the State, we hold that the evidence was reasonably interpreted and supports Tome’s conviction of burglary and criminal mischief.

Issue 2

Did Tome receive effective assistance of counsel?

Tome contends that he received ineffective assistance because defense counsel agreed to six continuances, waived a jury trial, did not call witnesses in support of Tome’s alibi, and did not move to dismiss the criminal mischief charge because the vending machine was not city property as charged.

We review issues of ineffective assistance of counsel under the standard of Strickland v. Washington (1984), 466 U.S. 668, 687, 104 S.Ct. 2052, 2064, 80 L.Ed.2d 674, 693, which states: “First the defendant must show that counsel’s performance was deficient .... Second, the defendant must show that the deficient performance prejudiced the defense.”

In reviewing the record, we find that Tome has shown neither deficiency of performance nor deprivation of a fair trial. Tome alleges tactical errors but fails to show how these alleged errors reached the magnitude of deficient performance.

Tome’s first public defender requested four continuances, citing scheduling conflicts and continuing plea negotiations. Tome’s second public defender requested another continuance to familiarize herself with Tome’s case. Tome assented to these continuances as evidenced by his signing a waiver of speedy trial on February 21, 1986. Contrary to Tome’s contentions, the continuances reflect the efforts of counsel to provide effective, not ineffective, assistance.

Tome’s waiver of a jury trial does not establish ineffective assistance of counsel. Tome’s waiver of jury trial is evidenced by the written waiver filed by his counsel on June 24, 1985, nearly nine months before his trial. Tome had ample time prior to his trial to request that the waiver of jury trial be withdrawn. He elected to take his chance with a trial before the court as the trier of fact. Now, after an adverse verdict, he wishes to claim the waiver as proof of ineffective assistance counsel. This we cannot permit. State v. McCartney (1978), 179 Mont. 49, 55-56, 585 P.2d 1321, 1325.

Counsel’s decision to not call alibi witnesses was a prudent trial tactic. Prior to trial, Tome’s sole alibi witness failed to support Tome’s story. As we have held, the decision to call or not call witnesses is a matter of trial tactics and does not determine ineffective assistance. State v. Elliott (Mont. 1986), [221 Mont. 174,] 717 P.2d 572, 575, 43 St.Rep. 723, 726.

Counsel’s failure to object to the criminal mischief charge was reasonable. The criminal mischief charge adequately notified Tome of exactly which vending machine was damaged. The purpose of an information is to reasonably apprise the accused of the charges against him so that he has the opportunity to prepare and present his defense. State v. Matson (Mont. 1987), [227 Mont. 36,] 736 P.2d 971, 975, 44 St.Rep. 874, 878. The criminal mischief information against Tome fulfilled that purpose. Any objection would have been impotent. We find that Tome was not misled by the charge or prejudiced by the lack of objection.

Tome has failed to show that counsel’s performance was deficient and prejudiced his defense. Allegations of ineffective assistance of counsel must be grounded on facts which appear in or are easily deduced from the record and which go beyond mere conclusory allegations. State v. Robbins (Mont. 1985), [218 Mont. 107,] 708 P.2d 227, 232, 42 St.Rep. 1440, 1444. We find that counsel exercised her professional judgment on matters of trial strategy. We hold that Tome received effective assistance of counsel.

Affirmed.

MR. JUSTICES HARRISON, WEBER, HUNT and McDONOUGH concur.


author: MR. JUSTICE WEBER MR. JUSTICE SHEEHY, MR. JUSTICE HUNT,

text:
    The CITY OF MISSOULA, a Montana Municipal Corporation, Plaintiff/Appellant, v. MOUNTAIN WATER COMPANY, a Montana corporation, Defendant/Respondent, Warren A. Bache; La Marr Baldwin; Jacqueline D. Beck; Linda D. Dunn; Dennis L. Falk; Sharon R. Fraser; Gary L. Frey; Georgette Gerlach; et al., Intervenors/Respondents.
    No. 86-548.
    Submitted April 10, 1987.
    Decided Sept. 18, 1987.
    743 P.2d 590.

      Mulroney, Delaney & Scott, Dexter L. Delaney, Jim Nugent, City Atty., Missoula, for plaintiff/appellant.
    Garlington, Lohn & Robinson, Sherman V. Lohn and Susan P. Roy, Missoula, Gough, Shanahan, Johnson & Waterman, William Coldiron, Helena, for respondents.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

This is an eminent domain proceeding for the acquisition of defendant’s water distribution business. The Fourth Judicial District Court, Missoula County, held that the City of Missoula (City) failed to prove by a preponderance of the evidence that its acquisition of the business through eminent domain was necessary. The City appealed. We affirm in part, reverse in part, and remand for reconsideration.

The issue appealed is whether the trial court erred in determining what laws are applicable for establishing the City’s burden of proof and in weighing the evidence.

Mountain Water Company (Mountain Water) is a Montana corporation, which owns and operates a Missoula water system. The system also provides water for some 4,000 customers outside the city limits of Missoula. Park Water Company of California is the sole owner of Mountain Water. Park Water Company, in turn, is nearly wholly owned by Henry (Sam) Wheeler, also of California. Park Water Company at its California headquarters, in conjunction with the local staff of Mountain Water, manages the Mountain Water system.

Mountain Water acquired the Missoula water system from Montana Power Company in 1979. The Missoula City Council was also interested in buying the water system at that time. However, because of the built-in delays associated with municipal financing, the City was unable to fund the purchase before the sale was made to Mountain Water. Shortly after Mountain Water acquired the water system, the City passed an ordinance authorizing the City Administration to acquire the water system by purchase or condemnation under Sections 7-13-4403 and 4404, MCA.

At the time of Mountain Water’s purchase of the system, customers were supplied by surface water from Rattlesnake Creek and water from several wells. The wells supplied approximately 55% of the annual needs, and Rattlesnake Creek supplied the remaining 45%. In 1983, Rattlesnake Creek became infested with giardia. Mountain Water immediately shifted over to the sole use of well water to supply its customers. The City contends that Mountain Water had been forewarned of the danger as much as two years before the outbreak, but that Mountain Water refused to take any preventative action. Mountain Water responds that it was as responsible as possible, having available as its only preventative measure the installation of a filtration system that would have cost between 4 and 5 million dollars, without any guarantee of 100% effectiveness. Mountain Water states that the State Board of Health gave it an unsolicited commendation for its speed in shifting users from Rattlesnake Creek to well water.

Rattlesnake Creek water continues to go unused. Mountain Water has developed additional wells and is currently 100% dependent upon wells for its supply of water. Mountain Water has not relinquished its water rights in Rattlesnake Creek, because the water serves as an emergency source.

In the spring of 1984, the City attempted to negotiate the purchase of Mountain Water. Those negotiations were unsuccessful. In June of the same year, the City adopted a resolution reaffirming its 1979 ordinance and its interest in acquiring the water system. Then, in late 1984, the City brought this condemnation proceeding against Mountain Water. The employees of Mountain Water were allowed to intervene in the action. The question of public ownership of the water system was also submitted to the citizens of Missoula as a ballot initiative in September 1985. The electorate supported acquisition and the initiative passed.

In March 1986, a 4-day trial was conducted before the District Court sitting without a jury. All parties presented testimony and documentary evidence on the economic and other effects of a transfer of the water system from private to public ownership. In August 1986, the court issued its opinion and judgment holding that the City had failed to prove that the condemnation was necessary.

Did the trial court err in determining what laws are applicable for establishing the City’s burden of proof and in weighing the evidence?

The City argued below, and again asserts here, that its ordinance and resolution authorizing the acquisition of the water system conclusively establish the necessity of its acquisition of the system. It maintains that Section 7-5-4106, MCA, is controlling. That statute provides:

“The city or town council has power to condemn private property for opening, establishing, widening, or altering any street, alley, park, sewer, or waterway in the city or town and for establishing, constructing, and maintaining any sewer, waterway, or drain ditch outside of the corporate limits of the municipality or for any other municipal and public use. The ordinance authorizing the taking of private property for any such use is conclusive as to the necessity of the taking and must conform to and the proceedings thereunder had as provided in Title 70, chapters 30 and 31, concerning eminent domain.” (Emphasis supplied.)

Mountain Water argued, and the District Court held, that the controlling statutes are those in Title 7, Chapter 13, part 44, entitled “Water Supply and Regulation.” Their position is that the City ordinance does not establish a conclusive presumption of necessity.

For several reasons, we affirm the District Court’s conclusion on which statutes govern. First, the arrangement of these code sections as enacted in 1895 supports the District Court’s conclusion. The predecessors of both Sections 7-5-4106, MCA, and Sections 7-13-4402 through 4404, MCA, originally were numbered paragraphs under Political Code Section 4800, Codes of Montana 1895. This is how they appeared:

“The city or town council has power:
“64. To contract an indebtedness on behalf of the city or town upon the credit thereof, by borrowing money or issuing bonds for the following purposes, to-wit: Erecting public buildings, sewers, bridges, water works, supplying the city or town with water by contract, the purchase of fire apparatus, the construction or purchase of canals or ditches for supplying the city or town with water . . . provided, that no money must be borrowed or bonds issued for any purpose hereinbefore set forth in this Section, until the proposition has been submitted to the vote of the taxpayers affected thereby of the city or town and the majority vote cast in favor thereof; and, further provided, that an additional indebtedness may be incurred, when necessary, to . . . procure a water supply for the said city or town which shall own or control said water supply and devote the revenue derived therefrom to the payment of the debt as follows: . . . Provided, that whenever a franchise has been granted to, or a contract made with, any person or persons, corporation or corporations, and such person or persons, corporation or corporations, in pursuance thereof and in good faith, have established and maintained a system of water supply, the city or town granting such franchise, or entering into such contract, before taking any action for the procurement of a water supply to be owned or controlled by such city or town, shall, by the passage of an ordinance, give notice to such person or persons, corporation or corporations, that it desires to purchase the plant and franchise of such person or persons, corporation or corporations, it shall have the right to so purchase the said plant upon such terms as the parties may agree; in case they cannot agree then the said city or town may proceed to acquire the same under the laws relating to the taking of private property for public use; provided, that no city or town, having a water supply furnished by private parties, under a contract or franchise, entered into or granted by the city or town, shall proceed to the erection or construction of a water plant to be operated by it, but in case the city or town shall desire to own and operate its water supply, it shall acquire the plant and supply already in operation therein as herein provided.
“75. To condemn private property for opening, establishing, widening or altering any street, alley, park, sewer, waterway, in the town or city, or for any other public use, and the ordinance authorizing the taking of private property for any such use is conclusive as to the necessity of the taking, and must conform to and the proceedings thereunder had, as provided in Title VIL, Part III., of the Code of Civil Procedure concerning eminent domain.
“79. To adopt, enter into, and carry out means for securing a supply of water for the use of a city or town or its inhabitants.”
« 99

The detailed provisions on water system acquisition in paragraph 64 address 3 different aspects of acquisition of a water supply: issuance of bonds for purchase, negotiations with a franchiser for purchase, and a requirement that an existing water franchise be purchased rather than a new plant constructed. Many of those provisions are now found at Sections 7-13-4403 and 4404,’MCA. Paragraph 75 is now Section 7-5-4106, MCA. Paragraph 79 is now Section 7-13-4402, MCA. There is nothing to indicate that paragraph 75 should govern over the detailed provisions on water system acquisition in paragraphs 64 and 79. The reference to streets, alleys, parks, sewers, and waterways in paragraph 75 is primarily a list of “ways”, or uses requiring condemnation of strips of land. A water system is not within the type of items listed. Further, an acknowledged rule of statutory construction states that special statutes will prevail over general statutes. Taylor v. Dept. of Fish, Wildlife & Parks (Mont. 1983), 205 Mont. 85, 666 P.2d 1228, 1231, 40 St.Rep. 1112, 1116. Paragraph 75 could be applied to water distribution systems only through its catch-all mention of “any other public use.” On the other hand, paragraphs 64 and 79 are concerned specifically with city water supply and regulation, including acquisition of a private water supply system through eminent domain.

In 1902, this Court considered a case in which the City of Helena sought to condemn portions of several water rights for use as a city water supply. In that case, City of Helena v. Rogan (1902), 26 Mont. 452, 68 P. 798, this Court said,

“Another question presented is this: Can water already appropriated to a public use he condemned in eminent domain proceedings for any other use, whether the other use is a more necessary public use or not? Section 2214 of the Code of Civil Procedure provides that: ‘Before property can be taken it must appear: ... (3) If already appropriated to some public use, that the public use to which it is to be applied is a more necessary public use.’ It must so appear in the complaint. The use of water to irrigate a farm under the water-right law is a public use. Section 15, art. 3, Const.; Ellinghouse v. Taylor, 19 Mont. 462, 48 P. 757. The law permits the condemnation of a water right by a city, as we have seen. Therefore the position taken by respondents, to wit, that water which is being used for any beneficial use cannot be taken for any other use, whether the other use is a more necessary public use or not, is not tenable. Whether the use of water by the city is necessary — that is, whether the city needs a water supply — is for the city, and for the city alone, through its council, to say. Whether it is necessary to condemn the water right in order to supply the city is to be alleged, and is a judicial question to be determined by the court. That it is a more necessary use than that of the ranchman is to be alleged, and by the court judicially determined. If it were not, then not only could a city condemn and take the water from a ranchman owning and irrigating 160 acres of land, but could, on its own allegation of superior necessity, condemn and take the water from another and a neighboring city, and leave it dry. And here again we may, in passing, say that the necessity for a complete description of the property to be taken is necessary, to the end that the court may see that the proposed use is superior in point of necessity to the present public use.”

Rogan, 68 P. at 802. The predecessor of Section 7-5-4106, MCA, was neither applied nor even mentioned. The questions of necessity and “more necessary use” were questions for judicial determination.

For all of the above reasons, we affirm the District Court’s conclusion that the City ordinance does not establish a conclusive presumption that the taking is necessary. The controlling statutes in this case are Sections 7-13-4401 through 4406, MCA, and those parts of Title 70 incorporated therein by reference. We therefore continue our analysis under those statutes.

Under Section 7-13-4403, MCA, the City properly exercised its right of offering to purchase the water system. Where, as here, there is no agreement to purchase, Section 7-13-4404, MCA, provides that the City “shall proceed to acquire the plant or water supply under the laws relating to the taking of private property for public use.” Section 70-30-111, MCA, sets forth the standard of proof and the facts which must be found before private property may be taken for a public use:

“Before property can be taken, the plaintiff must show by a preponderance of the evidence that the public interest requires the taking based on the following findings:
“(1) that the use to which it is to be applied is a use authorized by law;
“(2) that the taking is necessary to such use;
“(3) if already appropriated to some public use, that the.public use to which it is to be applied is a more necessary public use;
“(4) that an effort to obtain the interest sought to be condemned was made by submission of a written offer and that such offer was rejected.”

In this case, the requirement under part (1) is met by Section 7-13-4402, MCA, which authorizes a municipal water system. The requirement of part (4) has been met by the submission of a written offer for the system and the rejection of that offer.

The District Court must determine, under part (2), whether it is “necessary” that the water system be taken by the City. This Court has defined “necessary” under this statute as a reasonable, requisite, and proper means to accomplish the improvement. State etc. v. Standley Bros. (Mont. 1985), [215 Mont. 475,] 699 P.2d 60, 62, 42 St.Rep. 563, 565-66. We recognize that two questions are involved: 1) Is it necessary that the City have its own water system? and, 2) Must the City take Mountain Water’s property in order to have its own system? Unlike the typical case involving condemnation of land for a highway, the first question here is not whether it is necessary to have the improvement, but whether it is necessary to have the improvement operated by the City instead of by private industry.

Under part (3), the District Court must determine whether the proposed use is “more necessary” than the present use. That the water already has been appropriated to a public use cannot be disputed given the broad interpretation of ‘appropriation to a public use’ in the eminent domain statutes. See Sections 70-30-102 and 203, MCA. In State ex rel. Smart v. City of Big Timber (1974), 165 Mont. 328, 528 P.2d 688, this Court determined that it was “more necessary” that city-owned property between a sidewalk and the boundary of a schoolyard be condemned for the purpose of erecting a fence than that the property continue in the existing public use. In doing so, the Court weighed the benefits to be derived from erecting the fence against the impairments to the existing use of the land. While not dispositive in the present case, Smart illustrates the broad range of considerations in determining whether a proposed public use is more necessary than the present use.

The District Court made detailed findings listing its reasons for concluding the City did not prove it was necessary that it acquire the water system. The court’s first finding considers the effects on Mountain Water employees of a takeover by the City. The undisputed record shows that the City would make reductions in the number of personnel and also reductions in the pay scale of the remaining employees in order that the employees would be paid salaries comparable to other City employees. We do not agree with the District Court conclusion that the “City’s calloused plan for Mountain Water’s twenty-six employees, standing alone, is enough to defeat a finding of public necessity.” We hold that the effect on Mountain Water employees is one factor to be considered in determining whether the acquisition is necessary, but that factor alone is not dispositive.

The City submitted evidence to the District Court on the feasibility and cost of constructing a plant for treatment of Rattlesnake Creek water. It contended that Mountain Water was remiss in failing to construct such a plant after the giardia outbreak. The District Court found that use of Rattlesnake Creek water is not necessary. After reviewing the record, we conclude that substantial evidence supports the District Court’s finding. This evidence includes an admission that a treatment plant which is 100% effective against giardia is not technically feasible, and evidence that there is an abundance of well water available from Missoula’s underground aquifer. We conclude that the City’s evidence on construction of a water treatment plant is therefore irrelevant to the issue of whether the taking of the Mountain Water system by the City is necessary.

We also do not agree with the conclusion of the District Court that the “prejudicial issues” of profit and out-of-state ownership “demeans the whole process.” We do not find any legal basis for excluding these facts from consideration on the issue of necessity. We conclude these issues are pertinent to the determination of whether the public interest requires the taking under Section 70-30-111, MCA, as it has been broadly drafted and defined. In the absence of a declared policy by the Legislature giving greater or lesser weight to public ownership as compared to private ownership of a water system, these issues must be considered and weighed by the trial court on remand.

We conclude that the court’s remaining findings are supported by the evidence and are appropriate for consideration in evaluating whether City operation of the water system is a “necessary” use of the system. These include findings on public savings, on rates and charges, on cooperation between Mountain Water and the City, and on the effect of having Mountain Water’s home office in Missoula.

The District Court essentially disregarded the City ordinance and resolution and the vote of the citizens of Missoula on the acquisition of the water system. Apparently it concluded that so long as Mountain Water is running an economical system which is not charging an excessive rate and is furnishing adequate service, there can be no basis for acquisition by the City. The failure of the District Court to consider the vote of the people and the vote of the Missoula City Council makes the issue of necessity solely a matter of economics. Some may consider that to be wise social policy, but that conclusion is not warranted by our statutes. Since Section 70-30-111, MCA, gives the district court the power to determine whether a condemnation is necessary, the votes of the people and the city council cannot be considered as finally dispositive of the issue of necessity. However, we hold that upon remand the public interest as expressed in these votes must be considered and weighed with the other factors in determining whether City acquisition of the water system is necessary. In considering the weight to be given to the votes, the court properly may consider that users outside the City could not vote or express their opinion, if those are the facts. The court may also compare the number and identity of voters with the number and identity of the water users.

Unfortunately Section 70-30-111, MCA, does not set forth all of the issues which are appropriate for consideration on the necessity of taking. A significant argument may be made as to the importance of the City obtaining ownership of the water rights themselves,, in order that the City may assure its inhabitants of long range access to water. It presently appears that the access to such a water source is at least to some extent dependent upon Mountain Water. On remand this element also should be considered and such additional evidence and briefing required as is found to be necessary by the District Court.

Unfortunately there are no statutory guidelines to assist the District Court in weighing the various factors which it must consider. We do point out that the City has the burden to prove by a preponderance of the evidence that the condemnation is necessary, under Section 70-30-111, MCA.

We reverse the judgment of the District Court and remand for reconsideration of all relevant factors, including the vote by the people and the City’s resolution and ordinance.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON and GULBRANDSON and HON. A. B. MARTIN, District Judge, sitting for MR. JUSTICE MORRISON concur.

MR. JUSTICE SHEEHY,

dissenting:

I dissent and would affirm the District Court which found that the City of Missoula had not carried the necessary burden of proof in this cause.

I do agree with the majority that the statutes which apply to the acquisition of a private water supply system by a municipality and which apply in this case, are Sections 7-13-4403, 7-13-4404, MCA, and by reference in Section 7-13-4404, also the statutes relating to eminent, domain. The contention of the city, that under Section 7-5-4106, its ordinance authorizing the taking of the private water system of Mountain Water Company was conclusive is properly refuted in this cause.

The question of necessity in this case remains for determination by a court under eminent domain procedures. The statutes authorizing a city to operate a water supply system do not grant to a city council or commission the frightening power to take by itself conclusive action in condemning the property of another. I say frightening because city utilities may levy charges without regulation by the Public Service Commission, and may raise those charges up to 12% per year. Section 69-7-101, MCA.

I part from the majority in their determination of how the condemnation statutes are to be applied to this type of attempted condemnation, and from their determination that the District Court erred in considering the factors upon which it did rely that no necessity was shown here.

First, Section 7-13-4404, MCA, requires that when a municipality is unable to acquire a private water supply system by offering to purchase the same, then it may proceed to acquire the plant or water supply “under the laws relating to the taking of private property for public use.”

The majority say that public ownership versus private ownership is a factor of necessity to be considered in this case. Where the majority stray into error is their implicit assumption that the City of Missoula, as a governmental entity, stands in a better position as a condemnor for purposes of public use than Mountain Water Company, a private corporation. No such distinction is made in our statutes. Instead, in providing for eminent domain procedures, Section 70-30-102, MCA, enumerates what a public use is, and that the right of eminent domain may be exercised in behalf of such public uses. Any entity, governmental, corporate, or private, which devotes property to a duty described as a “public use” under Section 70-30-102, has the further right to become a plaintiff in an eminent domain proceedings to acquire property for such public use. Thus, Section 70-30-203, MCA, provides that the plaintiff may be a corporation, association, commission, or person in charge of the public use for which the property is sought. The right of Mountain Water to condemn property when necessary is equal to the right of the City to condemn. This case is not the stage on which to debate public ownership versus private ownership of property. Public ownership of Missoula’s water supply system cannot be a factor of necessity, because all condemnors, whether public or private, stand on equal footing before the law in condemnation proceedings.

“Public use” includes flumes, ditches or pipes conducting water, heat or gas for the use of the inhabitants of any county, city or town. Section 70-30-102(3), MCA. The property that Mountain Water Company devotes to such public use is already “appropriated” to such use, though it may never have been acquired through condemnation proceedings. Under our statutes, if property is already appropriated to public use, whether or not it originated in such use by condemnation, such property is not thereby insulated from further condemnation. Though already appropriated to some public use, the property may be condemned if the public use to which it is to be applied after condemnation is a more necessary public use. Section 70-30-111, MCA.

As between the City of Missoula and Mountain Water Company, therefore, as entities using or proposing to use property for a public use, there is no distinction as to powers. Each has an equal right of condemnation, and if one desires to acquire property of the other that is already devoted to a public use, it must show by a preponderance of the evidence that the public interest requires a taking based on a finding that the “public use to which it is to be applied is a more necessary public use.” Section 70-30-111(3), MCA.

Thus, in this case, the burden of proof rested on the City of Missoula in its proceeding before the District Court, to establish by a preponderance of the evidence the fact question of greater necessity. That necessity is a fact issue to be proven has long been the rule in this state. State ex rel. Livingston v. District Court (1931), 90 Mont. 191, 196, 300 P. 916, 918.

When there are before the court two entities devoting or proposing to devote the same private property to a public use, if the property is already devoted to a public use, the question of fact on necessity becomes, is the proposed use more necessary than its present public use? Section 70-30-111(3), MCA, is not limited to a situation where the condemnor proposes to devote the property to a different public use. A proposal to utilize the property for the same public use must still be found to be more necessary. That point was decided in Butte-Anaconda Pacific Railway Company v. Montana Union Railway (1895), 16 Mont. 484, 41 P. 248.

Before a court issues its preliminary condemnation order, the public interest in the taking is a factor for the court to determine as well as whether the condemnor, in this case, has proved that the taking is a more necessary public use. Section 70-30-206(2), MCA, provides:

“If the court finds and concludes from the evidence presented that the public interest requires the taking of such interest in real property and that the plaintiff has met his burden of proof under 70-30-111, it must forthwith make and enter a preliminary condemnation order . . .” (Emphasis added.)

If the findings of the District Court here are considered in the light of the proper construction of the condemnation statutes where the City is proposing to take over a private water supply system, it is clear that the findings and conclusions of the District Court in this case support its denial of a condemnation order. Unless the findings of fact of the District Court are clearly erroneous, we cannot set aside or ignore them. Rule 52(a), M.R.Civ.P. Those facts include the following:

Three private water companies presently supply water to Missoula, of which Mountain Water is one. Mountain Water serves 16,201 customers of which 4,481 live outside the city limits.

The court found that Mountain Water employs 26 people to operate its Missoula system and the smaller Superior, Montana, system. The city proposed to eliminate 6 of the present top jobs and replace them with city employees. The remaining 20 employees of Mountain Water would suffer drastic salary reductions because their pay scales would be based on city employees’ pay schedules and not that of the private employer Mountain Water. The city claimed a total savings of $280,639 per year because of the reduction of pay of 20 people for a total savings of $117,656 and the replacement of 6 people by present city employees for a savings of $162,983. The court found this proposal to be “personally and publicly catastrophic” explaining that some would leave their jobs, the key jobs would have the greatest cuts in pay and it was impractical to expect the city to accomplish, without cost to the city, the jobs of Mountain Water manager and other staff heads. The court further found that there was no evidence that public employment makes a public worker more efficient; and that Mountain Water’s present ratio between water connections and employees is lower than most similar water supply systems in Montana. He found loyalty in the present Mountain Water employees to their employer and satisfaction with their present working arrangements. If a complete disruption in the present management of the water system, the elimination of 6 management jobs, and drastic reductions in pay to the remaining 20 employees do not affect the public interest in Missoula in a dispositive way, public interest must have become a fiction to this Court.

The city claimed that during the first five years of its operation of the water system, water subscribers would enjoy savings of $3.5 million. The District Court found that the purported savings were based upon an unsupported assumption that the city could purchase Mountain Water Company for $11 million. The owner valued his property at $19 million. The city appointed no appraiser and offered during the hearing no appraisal of the fair market value of the Mountain Water system. The District Court found that the city could not guarantee that future city administrations would not increase water rates during the next five years because the city’s other assumptions were understated.

The city claimed that Rattlesnake Creek water was necessary to the operation, and that if it obtained the property, it would immediately install a filter plant for the elimination of giardia cysts. The cost of an adequate filter plant would be $4-5 million. However, the court found that such plants do not assure complete elimination of giardia cysts, and that well water, now produced by Mountain Water Company, was a better alternative to the cyst problem. The District Court also rejected the city’s claim that Rattlesnake Creek water had to be utilized to assure that the Missoula aquifer was not depleted. The court found that the aquifer under the Missoula valley was one of the best in the United States and is continually recharged.

Hence the city raised the issue of the Rattlesnake Creek water as a matter of necessity. The District Court is completely supported in the record that if such water should be used, a filtration plant would not safeguard against giardia cysts and its cost was not justified. The city having failed to prove its own issue, the majority now find that it was irrelevant anyhow, and send the case back with the implicit direction to try something else. I leave it to others to explain that determination. Perhaps we will continue to reverse this case until the city gets it right.

This Court held in City of Helena v. DeWolfe (1973), 162 Mont. 57, 508 P.2d 122, that a claimed future need which is highly speculative will not support necessity and that the “necessity” for the taking must be shown as a reasonable need with foreseeable ability to complete the project.

The city claimed that it could eliminate Mountain Water’s $350,000 annual home office expense (its home office is in California). This purported savings was rejected by the District Court which found that the Mountain Water home office supports the Missoula operation by providing planning, finances, consultation, engineering and management for which the city would have to find a substitute.

The city claimed it could operate Mountain Water with $500,000 in yearly capital improvements. Mountain Water projects approximately $1.5 million each year for such improvements. The District Court found that Mountain Water projections of $500,000 for capital improvements was unrealistic.

If the city were granted condemnation, it would be required to finance the purchase by incurring bonded indebtedness. The city claimed its cost of finance would be cheaper for it than for Mountain Water. Again the District Court determined that if the fair market value of Mountain Water supply system fixed by the condemnation jury were between $11 million and $19 million, the entire economic projections of the city became untenable and any purported savings a myth. The majority opinion does not discuss this facet of the city’s case but it is clear that the court’s negative findings on the projected savings and operation were irrefutable.

The city claimed a reduction in the rates to the water users would result because the plant and property under a governmental entity would not be taxed. However, the District Court rejected this claim saying that the savings in property taxes would simply be shifted to other property tax payers, some of whom live outside the city in the county of Missoula. Moreover the District Court found that equity and debt financing used by Mountain Water were equally advantageous to water users.

There are a number of other-findings, but the foregoing suffice to show the District Court carefully considered the public interest in the matter and determined under the facts shown, the city had failed to prove by a preponderance of the evidence that the taking was necessary. The District Court did not specifically refer to the term “more necessary” but its conclusion that the taking was not necessary under the facts more than supports the conclusion that the taking was not “more necessary.”

Finally this Court goes afield on a factor relating to necessity that is demonstrably improper. The majority contends that the fact that the city electors voted to take over the water supply system, or that the city council so acted, is a factor proving necessity. There is no statutory basis for such position. Section 7-13-4403, MCA, provides that the passage of the ordinance by the city council is simply notice to the owner of the water supply system that the city desires to purchase the water supply system. There is no provision in the statutes for a vote by the electors on whether a water system should be acquired by a city. The action of Missoula in submitting the matter to the voters was simply gratuitous. The majority opinion is silent as to any factor or facet of the necessity issue that would be proved or disproved by a vote of the city council or the city electors. The vote is irrelevant unless this Court is of the opinion that necessity is determined by majority vote.

Every salient factor found by the District Court which really relates to a “more necessary use” issue is approved in the majority opinion as supported by the evidence. They approved the findings on “public savings, on rates and charges, on cooperation between Mountain Water and the city, and on the effect of having Mountain Water’s home office in Missoula.” The majority agree that the District Court was correct with respect to Rattlesnake Creek water use. These (except for the effect on employees) are the only factors which relate to whether the city’s proposed condemnation is “more necessary.” On retrial the District Court must take these factors as already concluded. There is not much room left for the District Court to weigh the votes of the city and the council, out-of-state ownership, and whether a profit is sinful, as matters of public interest.

I am in the dark about the meaning of the majority relating to water rights. If the reference includes Rattlesnake Creek water rights held by Mountain Water, those rights have no place in this case in light of the majority finding of irrelevance. Only property “used and useful” to the operation can properly be condemned.

Whether considered by the viewpoint of “necessary,” or “more necessary,” the city’s case does not hold water. We should affirm the District Court.

HON. ROBERT W. HOLMSTROM, District Judge, sitting for

MR. JUSTICE HUNT,

dissenting:

I dissent. I would reverse the District Court and direct the District Court to issue a preliminary condemnation order.

I am of the opinion that the City is entitled to the conclusive presumption of necessity contained in Section 7-5-4106, MCA. My opinion is based upon the nature and attributes of the power of eminent domain and upon the statutory history.

The power of eminent domain is an inherent attribute of the state’s sovereignty. Butte, Anaconda & Pacific Ry. Company v. The Montana Union Ry. Company, 16 Mont. 504, 536, 41 St.Rep. 232 (1895). The Legislature alone has the ability to delegate the power of eminent domain, State Highway Commission v. Crossen-Nissen Co., 145 Mont. 251, 400 P.2d 283 (1965), and has done so freely, granting the power to private corporations, such as railroads; to quasi corporate bodies, such as cemetery associations; to the executive branch of government, through administrative agencies such as the highway department; and to local government.

The Legislature has also granted to certain condemnors presumptions of necessity; the presumption varies in proportion to the degree of popular control exercised by the people of Montana over a particular condemnor. Thus, private entities, over which the public exercises no control, are granted no presumption of necessity. They are required, in the exercise of the power, to prove necessity pursuant to Section 70-30-111, MCA.

The State Highway Department is an administrative agency of state government. The Governor guides departmental policy by appointing its director. The Governor is elected by the people, the people thus indirectly exercise control over the department’s actions. Accordingly, the Legislature has granted the department a disputable presumption of necessity, so that the department’s order, pursuant to Section 60-4-104, MCA, when presented at the necessity hearing, establishes a prima facie case of the public necessity of the proposed highway or improvement.

Finally, cities and towns are granted a conclusive presumption of necessity, whereby the city ordinance authorizing the taking of private property establishes necessity. The ordinance is passed by the local legislative body, popularly elected by the citizens of the city or town, and over which those citizens exercise direct control through the ballot box. Recalling that “all political power is vested in and derived from the people” (Article II, Section 1, Montana Constitution), the grant of a conclusive presumption to an ordinance passed by the city council is neither unexpected nor shocking.

The majority seeks to buttress its conclusion that Sections 7-13-4402, through 4404, MCA, control this action by citing the relative arrangement of the statute in the Code of 1895. This argument, however, ignores the fact that the predecessor to Section 7-5-4106 was a feature of Montana law from territorial times, prior to when the sections which would become Sections 7-13-4403 and 4404 were first enacted in 1895. The Legislature is presumed, when enacting new legislation, to act with full knowledge of existing law. Thiel v. Taurus Drilling Limited, 1980-11, [(1985) [218 Mont. 201,] 710 P.2d 33, 42 St.Rep. 1520, (1985). A law passed with that knowledge is presumed not to abrogate an existing law, unless the two are absolutely repugnant to each other. London Guaranty & Accident Co., Ltd. v. Industrial Accident Board, 82 Mont. 304, 310, 266 P.2d 1103 (1928). This Court is obliged to harmonize statutes relating to the same subject, giving effect to each. Crist v. Segna, [_ Mont. -,] 622 P.2d 1028, 38 St.Rep. 150 (1981). The application of these rules of statutory construction dictate the conclusion that the Legislature intended the conclusive presumption of necessity found in what is now Section 7-5-4106, MCA, to apply to actions brought by a city to acquire a water supply system.

The majority also justifies its rejection of the application of Section 7-5-4106, MCA, because the statute does not specifically refer to a water supply system. The language contained therein “any other municipal and public use” is “catch-all” language commonly used by legislators in. Montana and elsewhere because of the impossibility of predicting, with perfect clarity, all the factual variations to which a law applies. This language evidences the Legislature’s intention that the provisions of the statute, including the conclusive presumption of necessity, are to apply to actions other than those seeking to acquire property for the specific purposes mentioned therein. The majority refuses to attach any purpose to the language “any other municipal and public use” and restricts the application of the statute to those purposes specifically mentioned therein. In effect, the majority states that if the city wishes to condemn a street or alley, it is entitled to a conclusive presumption of necessity, but if it desires to acquire a water distribution system under the street, it has no presumption.

The majority fails to recognize the distinction between “necessity” and “necessary” as those terms are used in eminent domain proceedings. “Necessity” as used in eminent domain proceedings generally refers to the need for the improvement itself. In Section 70-30-111, MCA, necessity is described as the “public interest”. “Necessary” as used in (2) of Section 70-30-111, MCA, has been defined as a “reasonable, requisite and proper means to accomplish the improvement.” State ex rel. Department of Highways v. Standley Bros., [215 Mont. 475,] 699 P.2d 60, 42 St.Rep. 563 (1985). There should be no question but what the water supply system owned by Mountain Water is reasonable, requisite and proper to accomplish the improvement, that is, the ownership by the City of the water supply system. The Legislature, when it granted authority to the City to acquire a water supply system owned by another entity, made a determination in accordance with (3) of Section 70-30-113, MCA, that the ownership of the water supply system by the City was a more necessary public use than the ownership of the water supply system by Mountain Water.