author: JUSTICE LEAPHART

text:
    WALTER HAMMERMEISTER, et al., Plaintiffs and Appellants, v. NORTHERN MONTANA JOINT REFUSE DISPOSAL DISTRICT, PONDERA COUNTY, GLACIER COUNTY, TETON COUNTY, et al., Defendants and Respondents.
    Nos. 96-120, 96-126 and 96-128.
    Submitted on Briefs September 19, 1996.
    Decided October 22, 1996.
    53 St.Rep. 1009.
    278 Mont. 464.
    925 P.2d 859.

      For Appellants: Edmund F. Sheehy, Jr.; Cannon & Sheehy, Helena.
    For Respondents: Selden S. Frisbee, Attorney at Law, Cut Bank; Mark F. Higgins; Ugrin, Alexander, Zadick & Higgins, Great Falls; Kevin C. Meek; Davis, Hatley, Haffeman & Tighe, Great Falls.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Appellants Hammermeister, Reagan, William Mancoronal and Elizabeth Mancoronal, et al., appeal from the judgment of the Ninth Judicial District Court, Pondera County, in which it granted Northern Montana Joint Refuse Disposal District, Teton County, Glacier County and Pondera County, City of Conrad, City of Valier and Thomas C. Hammerbacker’s (collectively NMJRDD) motion for summary judgment and denied appellants’ motion for summary judgment. We affirm.

All parties agreed that there were no genuine issues of material fact and, thus, the matter was appropriate for summary judgment ruling under Rule 56, M.R.Civ.P. The undisputed facts as related by the District Court are as follows: NMJRDD was created in 1990 following several years of discussion between interested persons in several northern Montana counties and municipalities regarding disposal of refuse in light of the advent of more stringent federal regulation of land fills. The original Resolution of Intention to create NMJRDD described a land area larger than the district which was ultimately created. Notice of the original Resolution of Intention was properly given according to statute. However, no additional affirmative notice of the reduction in size was provided by the governmental entities creating the district. The reduction in size was the result of the fact that, although the resolutions passed by Glacier, Teton and Pondera Counties included the territory within Toole County, Toole County itself did not pass a resolution to create the district and thus was not included in the final refuse district. Appellants’ challenge to the formation of NMJRDD is based on the lack of subsequent notice of the reduction in size of the district.

Following its creation, NMJRDD developed a roll-off site and landfill site, incurred bond indebtedness, assessed and collected fees for its services from the residents of the district, including the appellants in this matter, and was utilized by the citizens of the district as well as other entities on a contract basis. No person is subject to assessment by the district whose property was not included in the original Resolution of Intention, though persons (who were not parties to this proceeding) whose property was included in the original Resolution of Intention, are not part of the district as finally created. In other words, the notice was overly broad.

Section 7-13-212, MCA, requires that, before ordering any proposed improvements, the commissioners shall pass a resolution creating the refuse disposal district “in accordance with the resolution of intention theretofore introduced and passed by the commissioners.” Appellants contend that the county commissioners didnot create a refuse disposal district in accordance with the Resolution of Intention because the boundaries of the district were reduced from the boundaries set forth in the notice of intent to create.

The question presented by the cross-motions for summary judgment is whether the initial creation of NMJRDD is subject to challenge due to the fact that the original Resolution of Intention to create NMJRDD described a land area larger than the district ultimately created. In other words, does the fact that the land area ultimately included in the NMJRDD was smaller than the area described in the original Resolution of Intention invalidate the NMJRDD?

DISCUSSION

The statutory procedure for creation of a joint refuse disposal district is set forth in Title 7, Chapter 13, part 2, MCA (1989). Pursuant to the statutory procedure, it is necessary for the county commissioners of the counties involved to adopt a Resolution of Intention to create a refuse disposal district. Such resolution is required to contain, among other things, a general description of the territory or lands of said district, giving the boundaries thereof. Section 7-13-204(2)(c), MCA. The counties of Pondera, Glacier and Teton passed resolutions of intention setting forth the requisite information. Because the proposed boundaries of the joint refuse disposal district included various municipalities, it was necessary that the commissioners of each of the three counties transmit a copy of their respective “Resolutions of Intention” to the executive head of each of the cities or towns within the proposed district in that particular county so that the resolution could be considered by the city or town council. Section 7-13-206, MCA.

Thereafter, if any of the city or town councils, by resolution, concur in the resolution of the county commissioners, the city or town council must transmit a “Resolution of Concurrence” to the county commissioners. On the other hand, if an incorporated city or town council does not concur in the resolution, then the county commissioners have no authority to include said city or town in the district. The commissioners can, nonetheless, “continue to develop the district, excluding said city or town.” Section 7-13-207, MCA. Thus, the legislature, having specifically authorized the commissioners to proceed to develop the district after excluding any city or town which chooses to opt out, specifically recognized that the final boundaries of the district may well be smaller than those outlined in the initial resolution of intention.

Section 7-13-208, MCA, then requires the commissioners to give notice of the passage of the resolution of intention and resolution of concurrence, if applicable, by publishing a notice describing the general characteristics of the collection system; the proposed fees to be charged for services; designating the time and place where the commissioners will hear and pass upon protests made against the operation of the proposed district; and “stating that a description of the boundaries for the proposed district is included in the resolution on file in the county clerk’s office.” The statute does not require that the notice describe the boundaries of the district or lands included in the district but, rather, refers the reader of the notice to the description of the boundaries included in the resolution on file in the county clerk’s office. These notices were required to be published and mailed to every person firm, or corporation having real property within the proposed district.

At any time thirty days after the date of first publication of the notice, any owner of property liable to be assessed for said services is entitled to make written protest against the proposed service or against the proposed fees. The protest is required to be in writing and delivered to the county clerk. Section 7-13-209, MCA. Under § 7-13-210, MCA, the commission is required to conduct a hearing and proceed to hear and pass upon all protests and “its decision shall be final and conclusive.” Pursuant to § 7-13-212, MCA, the commissioners are deemed to have acquired jurisdiction to order improvements immediately upon the occurrence of one of the following: when no protests are delivered to the clerk within the specified time limit, when less than fifty percent of the family residential units in the proposed district protest, or when a protest shall have been overruled.

In the present case, each of the three counties determined that protests were filed by less than fifty percent of the family residential units in their respective portions of the proposed district. Accordingly, Teton, Glacier, and Pondera Counties each adopted resolutions creating the joint district.

Did the District Court err in holding that appellants were estopped from challenging the formation of the refuse district some five years after its formation?

Appellants base their challenge on the fact that the refuse district as finally adopted, contained a smaller geographic area than what was originally delineated in the Notice of Intention to Create. Appellants did not file their suit challenging the creation of the refuse district until 1995. In light of the fact that the district, as of the time of the challenge, had been operating for more than five years, the District Court was correct in relying upon Henderson v. School Dist. No. 44 (1926), 75 Mont. 154, 242 P. 979, and concluding that, given the public’s reliance on the district for five years, appellants were estopped from challenging the creation of the refuse district.

Henderson involved an annexation of a small Fergus County school district (#42) to an adjacent and larger district (#44). The annexation was accomplished in 1919 by order of the county superintendent. Validity of the annexation was not challenged until five years later in 1925. All residents within the district, including the plaintiffs, acquiesced in the annexation, took part in the school elections, sent their children to its schools and paid the taxes levied upon their property for its support and maintenance. Henderson, 242 P. at 980. The plaintiffs in Henderson argued that the annexation was void since there had been no election on the issue in each of the districts, as required by statute. The Supreme Court in Henderson found that since there had been a good faith attempt to comply with an existing law, it could have found that the school district was a de facto corporation and thus not subject to collateral attack. Henderson, 242 R at 981. The Court chose, however, to rely on an estoppel doctrine based upon public policy.

After a community has for years, as in the case at bar, exercised the functions of a public corporation, its legal existence cannot be questioned without causing disturbance more or less serious, and if the question of the regularity of its organization can be kept open to collateral inquiry indefinitely, no one can ever be secure in dealing with such entities, or be sure that taxes levied, bonds floated, or contracts necessarily entered into for the transaction of its business will be valid and enforceable. The transaction of public business might be blocked at any time at the will or whim of a private individual and the credit of the corporation impaired or destroyed. For these and other cogent reasons it is held that:
“An individual may be estopped by his conduct to attack the validity of the incorporation of a municipality, even though, but for such estoppel, he might do so.” 28 Cyc. 175.
Thus acquiescence in the exercise of corporate functions, and dealing with the corporation as such over a period of years will estop all persons dealing with the corporation from assailing its legality. [Citations omitted.]

Henderson, 242 P. at 981-82.

The plaintiffs in Henderson argued that they should not have been subjected to estoppel by acceptance unless they had knowledge of the relevant facts and that they were unaware of the creation of the district until five years later, in April of 1925. Despite the lack of an election, the Court upheld the annexation noting that plaintiffs did more than accept the benefits; “they dealt with the district and accepted liability as well; they paid the taxes levied against their property for a number of years, thus recognizing the district and acquiescing in its assumption of corporate capacity ...” Henderson, 242 P. at 982. The Court then went on to point out that the estoppel being applied was not based upon plaintiffs’ acceptance of or acquiescence in benefits, but was an estoppel based on public policy.

[T]he estoppel here invoked is not, therefore, strictly an estoppel by acceptance of benefits, but rather it is an estoppel based upon public policy, because of the confusion into which a judgment, at this late date, that the organization was void, would throw public and private rights and interests acquired through years of operation with the acquiescence of the inhabitants, and is therefore not dependent upon knowledge of the facts.

Henderson, 242 P. at 982 (emphasis added).

In Scilley v. Red Lodge-Rosebud Irr. Dist. et al. (1928), 83 Mont. 282, 272 P. 543, this Court refused to invalidate the creation of an irrigation district despite a showing that an absentee landowner was not given notice of the inclusion of his real property in the new irrigation district. Although that single landowner was allowed to be excluded from the district, the Court, relying on Henderson, stated:

[1]f after years of such operations, the creation of a district may be declared invalid, wholesale ruin and disaster may follow within and without the territory included within the supposed district; bondholders be stripped of their security for money loaned in good faith, and future worthy projects be subject to suspicion and distrust. For these reasons, courts should declare against the validity of the organization of such going concerns only for the most cogent reasons, and when irresistibly compelled to such a course.

Scilley, 272 P. at 550.

Those same public policy concerns mandate a similar result in the present case. In the five plus years since its creation, the refuse district has developed a roll-off site and a landfill site; it has incurred bonded indebtedness and it has assessed and collected fees for its services from the residents of the district, including the appellants in this matter; and it has been utilized by the citizens of the district, as well as other entities on a contract basis. As in Henderson, the undisputed facts indicate that there was a good faith attempt to comply with an existing statutory scheme for annexation. Thus, although there would be a basis for finding a de facto corporation not subject to collateral attack, we choosy instead to hold that the demands of public policy require an estoq £el. It is now over five years since the district was created. To decl>; e that the refuse district is void at this late stage would throw j iLjlic and private rights into considerable confusion. If districts siVj\ as this were indefinitely subject to collateral attack, no one wo- ever be secure in dealing with them, or confident that taxes, bo. s or contracts entered into for the sake of public business were alid and enforceable. “The transaction of public business might i blocked at any time at the will or whim of a private individual am die credit of the corporation impaired or destroyed.” Henderson, 24: P. at 981-82.

Appellants argue that the lack of a new notice setting forth the redefined boundaries was jurisdictional. They rely on our decision in Johnston v. City of Hardin (1919), 55 Mont. 574, 580, 179 P. 824, in support of their contention that the primary purpose of the notice was defeated because of the difference between the area described in the notice of intent as compared to the area encompassed in the final district. The decision in Johnston, however, was based upon the fact that:

It is established by this record that the resolution to which plaintiff and other property owners were referred for a description of the boundaries of districtNo. 9 describes territorynone ofwhichis in that district, and the same thing is true with respect to district No. 10.

Johnston, 179 R at 825. In other words, the resolution totally failed to describe any of the territory within the district. Thus, Johnston is clearly distinguishable from the case at bar in which the notice of intention was overly broad; that is, it encompassed some territory which was not ultimately part of the district. However, all territory which was not included in the final district was included within the notice. As set forth above, this is not a case where an affected party did not receive notice.

The Court cited Johnston in Wood v. City of Kalispell (1957), 131 Mont. 390, 310 P.2d 1058, which involved a claim that defective notice of intent to create a special improvement district rendered the district void ab initio. In Wood the question was whether the city had jurisdiction to create a special improvement district where the notice of intention to create it was not mailed to all property owners in the proposed district. Although notices were mailed to some 424 property owners in the district, one owner (Pettibone) was not mailed a notice. Wood, 310 P.2d at 1059.

Citing Scilley, 272 P. at 552, we held that service of notice as prescribed by statute is jurisdictional and, thus, the failure to send notice to Pettibone deprived the city of jurisdiction to proceed as to him. Wood, 310 P.2d at 1060. As to the remaining property owners, the city argued that under the precedent in Scilley, the district should be void only as to the one property owner who did not receive notice, not as to all those who did. Wood, 310 P.2d at 1060. This Court, however, rejected that argument for the reason that, unlike Scilley where the challenge arose many years after the district had been created, the challenge in Wood was brought before the city commenced work or began selling bonds. Thus, in contrast to Scilley, there was no public reliance as a basis for an estoppel, laches or waiver theory. Wood, 310 P.2d at 1060-61.

Wood is clearly distinguishable from the present case in a number of particulars: In Wood, the Court held that failure to serve notice as prescribed by statute was jurisdictional. Here, there was no failure to serve notice as prescribed by statute. Rather, the statute in question provided that notice must contain a “general description of the territory or lands of said district, giving the boundaries thereof.” Section 7-13-204(2)(c), MCA. There is no statutory requirement that the notice be reissued if the boundaries are reduced in size. Secondly, Wood and Scilley involved situations where a landowner was denied due process because he/she did not receive the requisite notice. In the present case there is no contention that there was a denial of due process through lack of notice. On the contrary, the contention is that notice went out to people who were ultimately not included within the district. That is, that too many rather too few received notice. Finally, unlike Wood where the challenge was brought before any work commenced, appellants did not raise their challenge to the NMJRDD until years after the district was created and in full operation thus giving rise to questions of estoppel. Even assuming, arguendo, that there was a legal requirement that the Resolution of Intention be re-noticed due to a reduction in territory, failure to re-notice did not adversely affect any of the landowners within the district as finally created and, thus, was not jurisdictional.

In summary, we hold that all affected parties received due process of law through receipt of notice of the intent to create the district; there was no statutory requirement that the notice of intent to create be re-noticed when the size of the district was reduced; and even if there were such a requirement, since the district has now been in operation for five plus years, the appellants are, for public policy reasons, estopped from challenging its creation or existence.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HUNT, ERDMANN and GRAY concur.


source: Caselaw Access Project

author: JUSTICE NELSON

license: Public Domain

text:
    MARK TURNER WIER, Defendant and Petitioner, v. LINCOLN COUNTY SHERIFF’S DEPARTMENT, and DISTRICT COURT OF THE NINETEENTH JUDICIAL DISTRICT OF THE STATE OF MONTANA, IN AND FOR THE COUNTY OF LINCOLN, THE HONORABLE JUDGE MICHAEL C. PREZEAU, Presiding, Respondents.
    No. 96-491.
    Submitted on Briefs August 19, 1996.
    Decided October 23, 1996.
    53 St.Rep. 1013.
    278 Mont. 473.
    925 P.2d 1172.

      For Petitioner: James B. Wheelis, Public Defender’s Office, Libby.
    For Respondents: Joseph P. Mazurek, Attorney General, Elizabeth L. Griffing, Assistant Attorney General, Helena; S. Charles Sprinkle, Lincoln County Attorney, Libby.
   JUSTICE NELSON

delivered the Opinion of the Court.

Mark Turner Wier (Wier) filed herein a Petition for Writ of Habeas Corpus for a Stay of Execution of Sentence and for the Setting of a Bond to Insure Appearance and Memorandum of Authorities pursuant to Title 46, Chapter 22, Montana Code Annotated.

Procedural Background

On May 1, 1996, Wier was charged with partner assault, a misdemeanor, in violation of § 45-5-206, MCA, and carrying a concealed weapon while under the influence, a misdemeanor, in violation of § 45-8-327. Wier posted a $2,000 bond and was released pending trial. On July 19, 1996, trial was held in Justice Court in Lincoln County. Wier did not appear and he was found guilty in absentia. Sentencing was scheduled for August 15,1996. There is no record of the sentencing other than a Commitment Order signed by the Justice of the Peace on August 15, 1996, wherein Wier was sentenced to five days in jail commencing August 15,1996, at 3 p.m. and ending August 20, 1996, at 3 p.m.

Wier appealed to the Nineteenth Judicial District Court, Lincoln County, on August 15, 1996, and requested a stay of execution pending his appeal. The Justice of the Peace refused to stay execution of Wier’s sentence. On August 16,1996, the District Court also denied Wier’s motion to stay execution of sentence. There is no record of any proceeding held on this motion. Wier filed a Petition for Writ of Habeas Corpus with this Court on August 16, 1996, seeking his immediate release from custody. The justice reviewing the petition declined to act in the absence of the full Court.

On August 20, 1996, this Court issued an Order staying the remainder of the sentence. The Court further ordered that the Attorney General file a response to the petition addressing the merits of Wier’s argument in addition to any procedural matters.

Wier was released from custody at 9:46 a.m. on August 20, 1996, by order of the Justice of the Peace.

Discussion

Wier argues that his incarceration was unlawful because an “appeal from a judgment from justice court abrogates that judgment” and because an “appeal to district court renders incarceration under a justice court’s order illegal.” The State contends that since Wier is no longer in custody, his claim for relief is moot and this Court should not address the substantive questions in this case.

While a petition for writ of habeas corpus is moot once the defendant is no longer in custody, State v. Sor-Lokken (1991), 247 Mont. 343, 351, 805 P.2d 1367, 1373, the issue here is one that is “capable of repetition, yet evading review.” See Weinstein v. Bradford (1975), 423 U.S. 147, 96 S.Ct. 347, 46 L.Ed.2d 350. This Court has previously stated:

When faced with constitutional questions which are capable of repetition yet could avoid review, this Court will consider the merits of the issues raised on appeal. Romero v. J & J Tire (1989), 238 Mont. 146, 148, 777 P.2d 292, 294; Butte-Silver Bow Local Gov’t v. Olsen (1987), 228 Mont. 77, 82, 743 P.2d 564, 567. As we stated in Butte-Silver Bow:
[t]he exception to mootness for those actions that are capable of repetition, yet evading review, usually is applied to situations involving governmental action where it is feared that the challenged action will be repeated.

Butte Silver Bow, 743 P.2d at 567.

Common Cause v. Statutory Committee (1994), 263 Mont. 324, 328, 868 P.2d 604, 606-7. The constitutional issue implicated here is Wier’s right to a reasonable bail. U.S. Const. Amend. VIII; Art. II, Sec. 22, Mont. Const.

Hence we accept jurisdiction to review the substantive issues raised in this case by writ of supervisory control. We are empowered to do so by Article VII, Section 2(1) of the Montana Constitution, granting this Court “original jurisdiction to issue, hear, and determine writs of habeas corpus and such other writs as may be provided by law,” and by Article VII, Section 2(2) of the Montana Constitution, granting this Court “general supervisory control over all other courts.” State ex rel. Marlenee v. Dist. Court, Etc. (1979), 181 Mont. 59, 62, 592 P.2d 153, 154.

Release or detention pending appeal of a justice court decision is governed by § 46-9-107, MCA, which provides:

Aperson intending to appeal from a judgment imposing a fine only or from any judgment rendered by a justice’s court or city court must be admitted to bail. The court shall order the detention of a defendant found guilty of an offense who is awaiting imposition or execution of sentence or a revocation hearing or who has filed an appeal unless the court finds that, if released, the defendant is not likely to flee or pose a danger to the safety of any person or the community. [Emphasis added.]

Under the plain language of this statute, Wier had a right to be admitted to bail pending his appeal unless the court found that he was likely to flee or that he posed a danger to the safety of any person or to the community. Neither the Justice Court, nor the District Court made any such finding in this case.

In State ex rel. Abbitt v. Just. Ct. of Lake Cty. (1986), 220 Mont. 210, 213, 714 P.2d 140, 142, we noted that a person who has appealed from a justice court order is not necessarily entitled to release, but must go through the bail procedures. Thus, Wier must qualify for bail and the amount of his bail must be determined in accordance with § 46-9-301, MCA. Once admitted to bail, Wier’s sentence should then be stayed by the trial court pending his appeal, pursuant to § 46-20-204, MCA.

The State contends that Wier did not attempt to be admitted to bail, but only attempted to stay the execution of his sentence. However, there was no opportunity for a bail hearing in this matter as both the Justice of the Peace and the District Court Judge were unavailable. Wier had previously posted a $2,000 bond in the Justice Court proceeding to secure his release pending trial. The Justice Court still retained this bond at the time of Wier’s appeal.

Accordingly, we hold that the Justice Court erred in failing to stay the imposition of Wier’s sentence pending his appeal to District Court.

CHIEF JUSTICE TURNAGE, JUSTICES HUNT, ERDMANN, TRIEWEILER, GRAY and LEAPHART concur.


author: JUSTICE NELSON JUSTICE GRAY

text:
    MONICA A. BUSCH, Plaintiff and Appellant, v. BRIAN ATKINSON (Michael Atkinson, Jr.), MICHAEL ATKINSON, and RITA ATKINSON, Defendants and Respondents.
    No. 95-456.
    Submitted on Briefs April 11, 1996.
    Decided October 24, 1996.
    53 St.Rep. 1020.
    278 Mont. 478.
    925 P.2d 874.

      For Appellant: Randy S. Laedeke, Laedeke Law Office, Billings.
    For Respondent: Michael P. Heringer, Matthew H. Thomas, Brown, Gerbase, Cebull, Fulton, Harman & Ross, Billings.
   JUSTICE NELSON

delivered the Opinion of the Court.

Plaintiff Monica Busch brought this action in the District Court for the Thirteenth Judicial District, Yellowstone County, to recover damages allegedly sustained in an automobile accident involving Defendant Michael Atkinson, Jr. Defendants filed a motion to dismiss based on Plaintiff’s failure to have a summons issued within one year of filing the complaint, pursuant to Rule 41(e), M.R.Civ.P. The District Court granted Defendants’ motion and ordered the dismissal of this action. We reverse.

We address the following issue on appeal:

Did the District Court err in dismissing Plaintiff’s personal injury action because a summons was not issued within one year of the commencement of the action?

Factual and Procedural Background

Plaintiff Monica Busch was injured on February 2, 1989, when Defendant Michael Atkinson, Jr., the minor son of Defendants Michael and Rita Atkinson, rear-ended Plaintiff’s vehicle while Plaintiff was stopped at a stop sign. Defendants’ insurance company accepted liability and paid for conservative treatment of Plaintiff’s cervical strain until it decided Plaintiff’s healing period should have ended. Plaintiff stopped treatment for a time but when she decided to resume treatment, Defendants’ insurance company refused to reimburse Plaintiff for further treatment.

Plaintiff’s counsel sent a letter to Defendants’ insurance adjuster requesting that the insurance company resume advancing payment for Plaintiff’s medical bills. In a letter dated April 5, 1990, the insurance adjuster stated that his company had already paid $2,900 for various examinations and treatments for Plaintiff and was not interested in advancing any more money for Plaintiff’s medical bills. The letter concluded with the statement “[w]hen your client is ready to talk final settlement of this case, we will be open for discussion.” Thereafter, Plaintiff continued with conservative treatment and submitted her medical bills to her husband’s health insurance carrier.

Plaintiff’s counsel filed the complaint commencing this action on January 31,1992, to prevent the statute of limitations from running. On August 12, 1992, the District Court issued an order requiring Plaintiff to file a status report with the court or to face dismissal of the case. That same month, Plaintiff’s counsel experienced problems with the computer in his office resulting in the loss of all data on the hard drive for the months of June, July and August 1992. Despite these computer problems, counsel filed a Status Report and Objection to Dismissal on September 16,1992, claiming that he was in continuing negotiations with Defendants’ insurance company and stating that the summons and complaint had not been served so that he could continue to deal directly with the insurance company.

In March 1993, Plaintiff’s counsel discovered that no summonses had ever been issued in this action. Counsel prepared a summons and took it to the Clerk of Court’s Office and attempted to have it issued. The court personnel advised counsel that they could not issue the summons because the one-year period provided by Rule 41(e), M.R.Civ.P., had expired. Counsel filed a motion with the court on March 9,1993, for leave to issue a summons beyond the one-year time period provided by Rule 41(e), M.R.Civ.P., on the basis of excusable neglect. He claimed that he mistakenly believed that he had prepared a summons and had it issued soon after he filed the status report with the District Court in September 1992, and that he had not discovered the error sooner because his office calendaring system had been completely wiped out by a computer virus in January 1993.

On May 25,1993, the District Court denied the motion for leave to issue a summons and ordered the action dismissed based upon the court’s finding that the Rules of Civil Procedure require dismissal if no summons has been issued within one year of filing the complaint regardless of the reason for it not being issued. Plaintiff filed a motion for reconsideration on May 28, 1993, under the theory that a summons could be issued on an amended complaint. On July 12, 1993, the District Court granted Plaintiff’s motion for reconsideration, vacating the May 25,1993 order dismissing this action and granting Plaintiff’s motion for leave to file an amended complaint and have summons issued on the amended complaint. However, Plaintiff failed to file the amended complaint or have summons issued.

On January 19,1995, more than 18 months after the District Court granted Plaintiff leave to file, the court sent Plaintiff’s counsel a notice advising that Plaintiff’s case would be dismissed for failure to prosecute unless good cause was shown why no action had been taken by Plaintiff following the court’s issuance of its July 12, 1993 order. In response, Plaintiff filed an amended complaint and three summonses were issued and served on January 26, 1995. However, the day after these summonses were issued, Plaintiff filed a second amended complaint, without leave of the court, to correct the name of one of the Defendants. The second amended complaint and three new summonses were served on the Defendants and an Affidavit of Service of Process was returned and filed with the Clerk of Court on January 31,1995, the day the three-year time limit for serving and filing return of service as set forth in Rule 41(e), M.R.Civ.R, was to expire.

On February 15, 1995, Defendants’ counsel filed a motion to dismiss under Rule 12(b), M.R.Civ.P, on the basis of insufficiency of process, insufficiency of service of process, and failure to state a claim upon which relief may be granted. The District Court granted Defendants’ motion on June 28, 1995, and ordered the dismissal of this action. On July 13, 1995, Plaintiff filed a Motion for Reconsideration but failed to file a supporting brief. The District Court denied Plaintiff’s Motion for Reconsideration on August 1, 1995, and entered judgment in favor of Defendants, ordering the dismissal of Plaintiff’s complaint. Plaintiff appeals.

Discussion

Did the District Court err in dismissing Plaintiff’s personal injury action because a summons was not issued within one year of the commencement of the action?

The District Court dismissed Plaintiff’s personal injury action because it determined that Plaintiff’s failure to issue a summons within one-year of the commencement of the action as mandated by Rule 41(e), M.R.Civ.P, entitled Defendants to dismissal. The court also determined that, even though Plaintiff was allowed to file an amended complaint, the one-year period to issue a summons prescribed in Rule 41(e), M.R.Civ.P., runs from the commencement of the action and does not begin running anew with the filing of the amended complaint.

Our review of a district court’s conclusions of law is plenary. We simply determine whether the court’s interpretation of the law is correct. First Call v. Capital Answering Serv., Inc. (1995), 271 Mont. 425, 426, 898 P.2d 96, 96 (citing Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603).

This Court has previously stated that Rule 41(e), M.R.Civ.P., requires dismissal of an action where summons is not issued within one year of the commencement of the action, unless an appearance is made by the defendant within three years of the commencement of the action. Sinclair v. Big Bud Mfg. Co. (1993), 262 Mont. 363, 367, 865 P.2d 264, 266-67; Association of Unit Owners v. Big Sky (1986), 224 Mont. 142, 148, 729 P.2d 469, 472. Rule 41(e), M.R.Civ.P., provides, in pertinent part:

all actions heretofore or hereafter commenced shall be dismissed by the court in which the same shall have been commenced, on its own motion, or on the motion of any party interested therein, whether named in the complaint as a party or not, unless summons shall have been issued within 1 year, or unless summons issued within one year shall have been served and filed with the clerk of the court within 3 years after the commencement of said action, or unless appearance has been made by the defendant or defendants therein within said 3 years. [Emphasis added.]

Plaintiff argues that a district court has the authority to extend the time for a plaintiff to have a summons issued where the failure to act was the result of excusable neglect pursuant to Rule 6(b), M.R.Civ.R, or for good cause pursuant to the rule established in Livingston v. Treasure County (1989), 239 Mont. 511, 781 P.2d 1129 (overruled by Haugen v. Blaine Bank (Mont. No.95-554, decided October 24, 1996). Plaintiff further argues that under Rule 4C(1), M.R.Civ.P, it was the duty of the Clerk of Court to issue the summons when the complaint was filed and that the burden of issuing the summons was wrongfully placed upon the Plaintiff.

We find it unnecessary to address all three of Plaintiff’s arguments as her argument regarding Rule 4C(1), M.R.Civ.P., is dispositive of this case. Rule 4C(1), M.R.Civ.R, provides in pertinent part:

Upon the filing of the complaint, the clerk shall forthwith issue a summons, and shall deliver the summons either to the sheriff of the county in which the action is filed, or to the person who is to serve it, or upon request, to the attorney for said party who shall thereafter be responsible to see that the summons is served in the manner prescribed by these rules. Upon request, separate or additional summons shall issue against any parties designated in the original action, or against any additional parties who may be brought into the action. [Emphasis added.]

Although this Court has previously stated that the power to issue a summons lies exclusively with the clerk of court and that an attorney can only request that the summons be issued, Larango v. Lovely (1981), 196 Mont. 43, 46-7, 637 P.2d 517, 519, we have not heretofore squarely addressed the precise question raised here — i.e., should the burden of a Rule 41(e) dismissal fall on the party filing a complaint where the summons is not issued within one year because the clerk of court fails to exercise that power in compliance with Rule 4C(1)? In addressing this issue we appreciate that, historically and as a matter of usual practice, attorneys prepare the summons and usually direct the clerk of court to issue it at the time of filing the complaint or at some later time. Normally the clerk simply complies with the attorney’s directive.

However, our task, when called upon to decide a case involving the Rules of Civil Procedure is to simply apply them as written, not to conform the Rules to what may be a prevailing practice actually at odds with what the Rules clearly and unambiguously require. Moreover, in our interpretation of the various Rules of Civil Procedure, we utilize applicable rules of statutory construction. Thus in our interpretation of the Rules, we are required

simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted [and] [w]here there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all.

.Section 1-2-101, MCA. See also First Call, 898 P.2d at 97; Pierce Packing Co. v. District Court, etc. (1978), 177 Mont. 50, 53-54, 579 P.2d 760, 762. Thus, we must attempt to read Rules 41(e) and 4C(1) together and, if possible, give effect to the clear and unambiguous language of both.

The plain language in Rule 4C( 1), is mandatory and leaves no room for interpretation — “[u]pon the filing of the complaint, the clerk shall forthwith issue a summons, and shall deliver the summons either to the sheriff... or to the person who is to serve it.” Under Rule 4C(1), neither the complainant nor his or her attorney is obliged to request that the summons be issued nor is the complainant or attorney empowered to direct the clerk not to issue the summons. The attorney for the complainant can request delivery of the issued summons and thereafter become responsible for having it served, but that is the extent of his or her authority with respect to the summons required to be issued by the clerk of court upon the complaint being filed.

Under Rule 4C(1), upon filing the complaint, the clerk of court’s duty, without a request from anyone, is to issue the summons and to deliver it for service; no discretion is allowed. This is clear not only from the plain language of the first sentence of Rule 4C(1), which requires no request for issuance of the initial summons, but also from the language of the second sentence of this Rule which provides that “[u]pon request, separate or additional summons shall issue.” (Emphasis added.) While the complainant or attorney is obligated to request additional or separate summons, there is no such obligation as to the initial summons to be issued upon filing the complaint; the clerk of court is simply, and without more, required to issue the summons and to deliver it for service.

Since Rule 4C(1) clearly places the initial burden and mandatory duty of issuing and delivering a summons on the clerk of court upon the filing of the complaint, we are unwilling to affirm the trial court sanctioning the Plaintiff with dismissal under Rule 41(e) and with the irrevocable deprivation of her day in court, where that sanction results directly from failure of the clerk — an officer of the court — to perform this duty, which is clearly required under the Rule and is solely within that official’s responsibility.

Over a decade ago, we were faced with a somewhat similar issue involving another of the Rules of Civil Procedure, Rule 77(d), and the effect on the running of litigants’ appeal times occasioned by the clerk’s failure to issue the notice of entry of judgment as required by the Rule. In those situations we uniformly applied the clear language of the Rule and held that the time for filing an appeal did not begin to run until the clerk of court issued the notice of entry of judgment as required by then existing Rule 77(d), M.R.Civ.P. See Pierce Packing Co. v. District Court, etc. (1978), 177 Mont. 50, 579 P.2d 760 (losing party’s appeal time did not begin to run where the clerk of court failed to serve notice of entry of judgment as required by then existing provisions of Rule 77(d), M.R.Civ.P., notwithstanding that prevailing counsel gave notice of entry of judgment himself); Matter of Estate of Holmes (1979), 183 Mont. 290, 599 P.2d 344 (even though devisee had actual notice of the entry of the district court’s order declaring two-thirds of devise void, the time for devisee to appeal did not begin to run where clerk of court failed to send notice of entry of judgment); Morrison v. Higbee (1983), 204 Mont. 501, 668 P.2d 1029 (appeal filed within 30 days of filing of notice of entry of judgment deemed timely where clerk of court failed to file notice of entry of judgment until three and a half years after the district court filed its findings of fact, conclusions of law and decree); AAR Const. Inc. v. Fergus Elec. Co-op. (1985), 215 Mont. 102, 695 P.2d 819 (losing party’s time for filing a post-judgment motion did not begin to run where the clerk of court failed to serve losing party with notice of entry of judgment).

Accordingly, because we hold that the duty of issuing the summons was solely that of the clerk of court’s under Rule 4C(1) and that it was not the burden of Plaintiff’s counsel to insure that the clerk performed that duty under the Rule, we reverse the District Court’s dismissal of Plaintiff’s personal injury action and remand for further proceedings allowing Plaintiff’s action to proceed. In so doing it is necessary that we make the following observation, however.

We have acknowledged that the clear and unambiguous requirements of Rule 4C(1) do not comport with what has been and is accepted practice. Rule 4C(1) should be amended to remove from the clerk of court the responsibility for insuring issuance of the summons and delivering the same to the process server by placing that responsibility squarely on the back of the party who will suffer the sanction if the summons is not timely issued and served — i.e., on the party filing the complaint. We intend to issue an order amending the rule, forthwith. See for example, our Order dated October 9,1984, wherein we amended Rule 77(d), M.R.Civ.R, because of practical complications, to, among other things, place the requirement for serving notice of entry of judgment on the prevailing party rather than on the clerk of court.

Reversed and remanded for further proceedings consistent with this opinion.

JUSTICES HUNT, GRAY, TRIEWEILER and LEAPHART concur.

JUSTICE GRAY

specially concurs.

While we are ruling in Plaintiff’s favor on a technical issue of first impression, our decision should not be construed by Plaintiff’s counsel as the reward for any great lawyering on his part. To the contrary, Plaintiff’s counsel can hardly be praised for the diligent pursuit of his client’s case in this matter. Computer problems notwithstanding, Plaintiff’s counsel would be well advised to implement some sort of office practice that will insure better tracking of his case and of his compliance with court orders. If this case were to be decided purely on excusable neglect grounds and without the overlay of the issue involving Rules 4C(1) and 41(e), the result might well be different.

JUSTICE NELSON concurs in the foregoing special concurrence.


author: JUSTICE TRIEWEILER

text:
    360 RANCH CORP., a Nevada Corporation, Plaintiff and Respondent, v. R & D HOLDING, a General Partnership, Defendant and Appellant.
    No. 96-152.
    Submitted on Briefs August 8, 1996.
    Decided October 31, 1996.
    53 St.Rep. 1038.
    278 Mont. 487.
    926 P.2d 260.

      For Appellant: Thomas R. Anacker, Anacker Law Office, Bozeman.
    For Respondent: Karl Knuchel, Attorney at Law, Livingston.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

The respondent, 360 Ranch Corp. (“360 Ranch”), filed an action for declaratory relief in the District Court of the Eighteenth Judicial District in Gallatin County. The District Court granted summary judgment in favor of 360 Ranch. The appellant, R & D Holding, appeals the order of the District Court. We reverse the District Court, and remand for resolution of the factual issues.

The issue on appeal is whether the District Court erred when it granted summary judgment in favor of 360 Ranch Corp.

FACTUAL BACKGROUND

In January 1994, 360 Ranch, as seller, entered into a land sale contract with Patrick Lancione by which it agreed to sell a five-acre parcel for the amount of $260,000. Lancione subsequently contracted with David Williams to sell the parcel for $381,150. The simultaneous closings on the land sale contracts were held on April 28, 1994. Williams paid the sum of $381,150, and 360 Ranch received the sum of $260,000. At the time of closing, however, 360 Ranch was unable to convey title to the five-acre parcel. The five acres, as part of a larger twenty-acre tract, could not be conveyed until a survey of the land was conducted, and all of the applicable subdivision review requirements were satisfied. As a result, 360 Ranch conveyed to Williams a recordable deed for the entire twenty-acre parcel of land.

Then, on April 29, 1994, Williams and 360 Ranch entered into a written option agreement. The agreement gave 360 Ranch the option to reacquire fifteen of the twenty acres conveyed to Williams at the closing. In order to exercise its option, however, 360 Ranch was required to prepare and file a minor subdivision plat no later than one year following the date of the option agreement. The agreement also stated that, if the contingencies in the option agreement were not met within the one-year period, then ‘Williams [would] retain the consideration paid today as liquidated damages, and this option [would] become null and void.”

360 Ranch’s attempts to comply with the contingencies in the option agreement were unsuccessful. In January 1995, they applied for minor subdivision review, but their application was denied on the ground that a conflict between the Bozeman Area Master Plan and the Bozeman Area Zoning Map was discovered. The conflict was eventually resolved, but not until after tiie one-year period specified by the option agreement had expired.

Ultimately, therefore, a minor subdivision plat was not filed within one year of the option date. No additional consideration was paid to extend the option, and it expired on April 29, 1995.

360 Ranch filed an action for declaratory relief in which it requested the District Court to extend the one-year period specified in the parties’ option agreement. 360 Ranch moved for summary judgment, and a hearing was held before the District Court. At the conclusion of the hearing, the District Court made the following findings: (1) the clear intent of the parties was to contract for a five acre, and not a twenty acre, parcel of land; and (2) because of the conflict between the. Bozeman Area Master Plan and the Bozeman Area Zoning Ordinance, it was “impossible” for 360 Ranch to comply with the requirements of the option agreement.

Based on its findings, the District Court granted summary judgment in favor of 360 Ranch. The District Court determined that “equity and good conscience ... requires that [360 Ranch] be given reasonable additional time” to fulfill the obligations imposed upon it by the option agreement, and ordered R & D Holding, as the “record owner of the 20-acre parcel,” to sign the application for the minor subdivision plat.

DISCUSSION

Did the District Court err when it granted summary judgment in favor of 360 Ranch Corp.?

Summary judgment is governed by Rule 56(c), M.R.Civ.P., which provides, in relevant part, as follows:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law ....

The purpose of summary judgment is to encourage judicial economy through the elimination of any unnecessary trial. However, summary judgment is never to be a substitute for trial if there is an issue of material fact. Reaves v. Reinbold (1980), 189 Mont. 284, 288, 615 P.2d 896, 898.

It is well established that the moving party is required to show a complete absence of any genuine factual issues. D’Agostino v. Swanson (1990), 240 Mont. 435, 442, 784 P.2d 919, 924. To defeat the motion, the nonmoving party must set forth facts which demonstrate that a genuine factual issue exists. O’Bagy v. First Interstate Bank of Missoula (1990), 241 Mont. 44, 46, 785 P.2d 190, 191. All reasonable inferences that may be drawn from the offered proof must be resolved in favor of the nonmoving party. D’Agostino, 240 Mont, at 442, 784 P.2d at 924. Additionally, if there is any doubt regarding the propriety of the summary judgment motion, it should be denied. Whitehawk v. Clark (1989), 238 Mont. 14, 18, 776 P.2d 484, 486-87.

When the District Court granted 360 Ranch’s motion for summary judgment, it concluded that “there are no genuine issues of material fact in dispute ... and that [360 Ranch] is entitled to judgment as a matter of law.”

R & D Holding, however, asserts on appeal that there are genuine issues of material fact, and that, therefore, the District Court erred when it granted 360 Ranch’s motion for summary judgment. Specifically, R & D Holding claims that genuine factual disputes exist with regard to the following issues: (1) the intent of the parties with regard to the conveyance of the twenty acres and the execution of the option agreement; and (2) whether 360 Ranch’s failure to perform, as required by the terms of the option agreement, can be excused on the grounds of impossibility of performance.

INTENT OF THE PARTIES

The District Court determined that, “[c]learly, it never was within the contemplation of anyone involved in these transactions that [R & D Holding] would get a 20-acre parcel of real property ....” The District Court found, instead, that the parties intended only to buy and sell a five-acre parcel.

R & D Holding, however, contends that there is a genuine issue of material fact with regard to the parties’ intent. To support their claim, they first point to the affidavitof David Williams, in which he asserts, “it was [my] intent to purchase 20 acres for the sum of $381,150.00, subject to the 360 Ranch Corporation option, and to retain the entirety of said 20 acres if the option was not exercised in accordance with its term[s].” 360 Ranch claims that this affidavit is self-serving and was made only after the institution of litigation. We recognize, however, that when a court determines whether summary judgment is appropriate, “the papers supporting [the] movant’s position are closely scrutinized, while the opposing papers are indulgently treated.” Payne Realty v. First Sec. Bank (1992), 256 Mont. 19, 25, 844 P.2d 90, 94.

Even more significant, however, is the contract itself. The language of the option agreement states, “[i]f the option is not exercised on or before the above-specified date [one year from the date of the option agreement], DAVID WILLIAMS is to retain the consideration paid today as liquidated damages and this option shall become null and void.” The option agreement clearly contemplates the possibility that Williams (and R & D Holding as his successor in interest) could acquire the entire twenty acre parcel.

In Engebretson v. Putnam (1977), 174 Mont. 409, 413, 571 P.2d 368, 370, we held that “summary judgment is usually inappropriate where the intent of the contracting parties is an important consideration.” Furthermore, all reasonable inferences must be drawn in favor of R & D Holding, the nonmoving party.

Therefore, we conclude that there is a genuine issue of material fact with regard to the intent of the parties.

IMPOSSIBILITY OF PERFORMANCE

The District Court found that 360 Ranch’s “efforts to divide the 20-acre parcel through the minor subdivision process were made impossible due to the conflict between the Bozeman Area Master Plan and the Bozeman Area Zoning Ordinance.” On that basis, the District Court excused 360 Ranch’s failure to perform, and gave them “reasonable additional time” to comply with the terms of the option agreement.

R & D Holding, however, contends that there is a genuine issue of material fact with regard to whether 360 Ranch’s failure to perform should be excused on the ground of impossibility of performance. In support of its contention, R & D Holding makes the following assertions: 360 Ranch did not file its first application for minor subdivision review 'until January 1995 — more than eight months after the term of the option commenced; the application contained errors which caused the Bozeman City Planning Office to reject the application; and as of March 1995, one month before the option expired, 360 Ranch did not have a valid application on file with the proper authority.

R & D Holding concedes that the conflict in the Bozeman area planning documents caused a delay, and that 360 Ranch was not responsible for either the conflict or the delay. Nonetheless, R & D Holding claims, on appeal, that the delay “would not have prevented [360 Ranch] from obtaining minor subdivision review during the term of the one (1) year option period had it simply made a timely filing of its minor subdivision application.” In essence, R & D Holding contends that the doctrine of laches, rather than impossibility of performance, should apply to the facts of this case.

The starting point for our analysis is the principle that “[i]mpossibility of performance is a strict standard that can only be maintained where the circumstances truly dictate impossibility.” Barrett v. Ballard (1980), 191 Mont. 39, 44, 622 P.2d 180, 184.

There will, undoubtedly, be contract cases in which a district court could grant summary judgment based on impossibility of performance. For example, where an Act of God physically destroys the subject matter of a contract, or where the subject matter of a contract is subsequently declared illegal, then it could be held that, as a matter of law, performance of the contract was impossible. In many other cases, however, whether performance of a contract was impossible will be a question of fact, and summary judgment will not be appropriate.

We conclude that this case falls into the latter category. Based on the facts alleged in this case, there are two possible interpretations. The first is that, as the District Court determined, due to the conflict in the Bozeman area planning documents and ensuing delay, it was impossible for 360 Ranch to file a minor subdivision plat within the one-year time period specified by the option agreement. The other is that, as R & D Holding contends, had 360 Ranch acted with proper diligence, their application for a minor subdivision plat could have been filed within the one-year time period, despite the conflict in the planning documents and ensuing delay.

We conclude that, based on the facts alleged in this case, the question of impossibility of performance presents a genuine issue of material fact.

Accordingly, we hold that the District Court erred when it granted summary judgment in favor of 360 Ranch.

Finally, we note that when the District Court issued its order, it determined that “equity and good conscience ... requires that [360 Ranch] be given reasonable additional time” to comply with the terms of the option agreement. We conclude that the District Court exceeded its authority when it modified the express terms of the parties’ contract.

It is well established that a district court may only assert its equitable jurisdiction when no statutory or legal remedy is available. Jeffries Coal Co. v. Industrial Accident Board (1953), 126 Mont. 411, 252 P.2d 1046. In this case, the District Court modified the express terms of the parties’ contract, and also failed to apply § 28-2-603, MCA, which states:

Where a contract has but a single object and such object is unlawful, whether in whole or in part, or wholly impossible of performanee, or so vaguely expressed as to be wholly unascertainable, the entire contract is void.

Thus, if after resolution of the pertinent factual issues it is determined that performance was, in fact, impossible, the District Court would be bound by the mandate of § 28-2-603, MCA.

The judgment of the District Court is reversed, and the case is remanded for resolution of the factual issues.

JUSTICES NELSON, HUNT, GRAY and ERDMANN concur.

      . In June 1994, Williams conveyed the property to R & D Holding. As a result, R & D Holding became the successor in interest to Williams, and is the appellant herein.


author: JUSTICE ERDMANN

text:
    AMERIMONT, INC., A MONTANA CORPORATION, CALVIN SMITH and ALICE E. SMITH, Plaintiffs and Appellants, v. M. M. ANDERSON, a/k/a MICHAEL ANDERSON, and NORMA JEAN ANDERSON, Defendants and Respondents.
    No. 96-129.
    Submitted on Briefs July 18, 1996.
    Decided September 30, 1996.
    53 St.Rep. 924.
    278 Mont. 495.
    926 P.2d 688.

      For Appellants: Karl Knuchel, Attorney at Law, Livingston.
    For Respondents: Thomas M. White, Sedivy, Bennett & White, Bozeman.
   JUSTICE ERDMANN

delivered the Opinion of the Court.

Amerimont, Inc., a Montana corporation, and Calvin Smith and Alice K. Smith appeal from the judgment entered by the Eighteenth Judicial District Court, Gallatin County, decreeing that Amerimont does not have a prescriptive easement over the property of M. M. Anderson and Norma Jean Anderson. We affirm.

The issue on appeal is whether the District Court erred in concluding that Amerimont does not possess a prescriptive easement over the Andersons’ property.

FACTS

Amerimont purchased property located in Gallatin County from the Smiths in 1993. The property lies near the town of Manhattan and the legal description of the land is the St^SEV4 of Section 26 and the NEV4 of Section 35 and all of Section 25, all situated in Township 2 North, Range 3 East.

Amerimont’s chain of title dates back to 1887 when George Oyler obtained title to the property by homesteading a portion of the ground and purchasing different sections from private individuals. In 1924 George Oyler conveyed title to Robert Oyler and in 1949 Robert Oyler sold the property to Hugh Smith, Calvin Smith’s father. In 1975 Hugh Smith deeded one-half interest in the property to Calvin Smith and when Hugh Smith died in 1990, Calvin Smith inherited the remaining one-half of the property. In July 1993, the Smiths transferred their interest to Amerimont by conveying fee title to Section 25 and executing a contract for deed on the respective portions of Sections 26 and 35.

In 1975 the Andersons acquired Section 29 in Township 2 North, Range 4 East, among other parcels, by warranty deed from Mabel Geraldine McElwee, n/k/a Mabel Geraldine McElwee Vergeront. Section 29 is situated one mile directly east of Amerimont’s Section 25 and the two Sections are separated by Section 30, which is owned by the State of Montana and leased to the Andersons. The Andersons’ predecessors in interest are Orie and Mabel Geraldine McElwee who purchased the property in 1944. When Orie McElwee died in 1973, Mabel Geraldine McElwee obtained sole ownership of the land.

When the Andersons purchased Section 29, there was a dirt road that entered Section 29 at a point near their home. The roadway branches off from the Spaulding Bridge Road and runs in an east-west direction across the extreme southern boundaries of Sections 29 and 30, eventually leading to the Smiths’ residence on Section 25. The roadway is barricaded by a series of gates which have remained closed and at times locked by the Andersons and the McElwees. The road is used for agricultural, recreational, and residential purposes. A map of the properties and the disputed roadway is shown below.

In 1994, Amerimont and the Smiths filed suit against the Andersons seeking to establish they had a prescriptive easement across the Andersons’ property. The case was tried before the District Court without a jury on January 17 and 18, 1995. On December 18, 1995, the District Court entered its findings of fact, conclusions of law, and order, concluding that Amerimont and the Smiths do not have a prescriptive easement over the roadway passing through Section 29, but instead have permissive use of the road. On January 18, 1996, the District Court entered judgment in favor of the Andersons, incorporating its earlier findings of fact and conclusions of law. This appeal followed.

STANDARD OF REVIEW

This Court reviews a district court’s findings of fact to determine whether they are clearly erroneous. Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904, 906. We have adopted a three part test to determine whether the findings are clearly erroneous. First, the Court will review the record to see if the findings are supported by substantial evidence. Second, if the findings are supported by substantial evidence, we will determine if the trial corut has misapprehended the effect of the evidence. Third, if substantial evidence exists and the effect of the evidence has not been misapprehended, the Court may still find that a finding is clearly erroneous when, although there is evidence to support it, a review of the record leaves the Court with the definite and firm conviction that a mistake has been committed. Interstate Prod. Credit Ass’n v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287.

We review a district court’s conclusions of law to determine whether the court’s interpretation of the law is correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686.

DISCUSSION

Did the District Court err in concluding that Amerimont does not possess a prescriptive easement over the Andersons’ property?

To establish an easement by prescription, the party claiming the easement must show open, notorious, exclusive, adverse, continuous, and uninterrupted use of the easement claimed for the full statutory period of five years. Tanner v. Dream Island, Inc. (1996), 275 Mont. 414, 424, 913 P.2d 641, 647-48 (citing Public Lands Access v. Boone & Crockett (1993), 259 Mont. 279, 283, 856 P.2d 525, 527; Keebler v. Harding (1991), 247 Mont. 518, 521, 807 P.2d 1354, 1356). The burden is on the party seeking to establish the prescriptive easement and all elements must be proved. Tanner, 913 P.2d at 648 (citing Public Lands Access, 856 P.2d at 527; Downing v. Grover (1989), 237 Mont. 172,175, 772 P.2d 850, 852). lb be adverse, the use of the alleged easement must be exercised under a claim of right and not as a mere privilege or license revocable at the pleasure of the owner of the land; such claim must be known to and acquiesced in by the owners of the land. Lemont Land Corp. v. Rogers (1994), 269 Mont. 180, 185, 887 P.2d 724, 727.

If the owner shows permissive use, no easement can be acquired since the theory of prescriptive easement is based on adverse use. Tanner, 913 P.2d at 648 (citing Public Lands Access, 856 P.2d at 527; Rathbun v. Robson (1983), 203 Mont. 319, 322, 661 P.2d 850, 852). Where the use of a way by a neighbor is by express or implied permission of the owner, continuous use of the way by the neighbor is not adverse and does not ripen into a prescriptive right. Public Lands Access, 856 P.2d at 528 (citing Wilson v. Chestnut (1974), 164 Mont. 484, 491, 525 P.2d 24, 27).

Amerimont claims that the historic use of the roadway was sufficient to establish an easement by prescription over the Andersons’ property. Amerimont argues that the Oyler family began using the road in 1887 to reach the homestead on Section 25 and that use of the road continued uninterrupted into the time that the Smiths obtained ownership of the land. Amerimont argues that the use of the road was open and notorious to such a degree that the Andersons should have been placed on notice that the Smiths were making a hostile claim against their ownership.

Amerimont claims that the Smiths and the Oylers used the road under a claim of right and that this claim was clearly known by the Andersons and their predecessors in interest who did nothing to prevent the continued use from 1887 to 1993. Thus, according to Amerimont, the road was used adversely and not as a mere privilege or license revocable at the pleasure of the Andersons or their predecessors in interest. Amerimont acknowledges the existence of gates across the road, but claims that the gates were installed primarily for livestock control and secondarily, to control public access. Amerimont claims that the gates were never meant to keep Amerimont, the Smiths, or the Oylers from accessing their property.

The Andersons argue that from 1946 to 1993 neither they nor the McElwees had a dispute with any neighboring ranchers or property owners, including the Smiths, concerning use of the roadway across their land. The Andersons claim that use of the road by the Smiths and their predecessors was always permissive and therefore never adverse and/or hostile. The Andersons argue that since 1944 they'and the McElwees constantly exercised their right to control access passing over Section 29 to neighboring landowners, including the Smiths and the Oylers. The Andersons note that they and the McElwees always closed the series of gates passing over the route and locked the gates on a monthly, if not weekly basis. According to the Andersons, Amerimont and the Smiths failed to prove the elements necessary to establish a prescriptive easement.

The District Court found as follows:

There is abundant evidence by reputable witnesses that homesteaders who initially lived in this area where Amerimont’s land is located, particularly the Oyler family, developed the common practice or common rule of allowing or utilizing a neighbor’s permissive use to reach land by crossing over each other’s land provided the neighbor closed all gates and didn’t injure the land. The record indicates that the Oyler family had friendly and amiable relations [with] all the neighbors in the area particularly Orie and Mabel Geraldine McElwee. Further, the record is clear that Hugh Smith had particularly good neighborly relations with Mike Anderson from 1975 until Mr. Smith’s death in 1990. Mike Anderson’s testimony regarding his assistance provided to Hugh Smith in opening gates as Mr. Smith would pass through the Anderson property is evidence of “neighborly accommodation”.
Because of this long standing friendship among neighboring property owners, including plaintiffs’ predecessors in interest, the use of the road crossing the Anderson property was never adverse and/or hostile. Use of the road was always permissive.
The Andersons and their immediate predecessors in interest, the McElwees, have exercised complete dominion over the route passing through Sec. 29 since 1946. They have required as a condition of use that all gates be closed. They locked the gate from the county road on a monthly if not weekly basis.
There is no evidence that Amerimont and its predecessors in interest to Sec. 25 ever possessed a key or combination to the gates controlling access to Sec. 29 which have been frequently locked since at least 1944.

The District Court concluded that:

Amerimont and the Smiths have the permissive use of the roadway passing over Sec. 29. Amerimont and the Smiths do not have an easement by prescription over the roadway passing through Sec. 29.

Our review of the record indicates that use of the roadway was allowed as a neighborly accommodation and by permission of the Andersons and their predecessors in interest. George Oyler’s grandson, Enos Oyler, testified that he knew the McElwees and had used the roadway going across Section 29. He stated that he worked for a man named Omen whose family was “friends or neighbors” with the McElwees and they had given Omen and his work crew permission to cross the road.

Mrs. Vergeront [Mabel Geraldine McElwee] testified in her deposition as follows:

Q. Mrs. Vergeront, I’d like to ask you some more general questions regarding the customs of your neighbors in allowing each other to use property and cross over property. Can you explain what your understanding was with respect to other neighboring landowners in utilizing their property or when they utilized your property?
A. Permission was always asked.
Q. Now, was permission required every time a neighbor wanted to go across another neighbor’s property?
A. It was for us.
Q. So anytime somebody wanted to use Section 29 they had to specifically ask you each time?
A. Yes.
Q. Was there ever times when you found somebody going across the road on Section 29 that had not asked for permission?
A. Occasionally.
Q. And what happened when you discovered somebody had used or was’attempting to use this road without your permission?
A. We always found out what their purpose was on our place and why they hadn’t asked permission and explained to them that permission was always required.
Q. Now, you indicated earlier here that you locked the gate and closed the gate to protect your property.
A. Yes.
Q. What on your property was there to protect?
A. Well, the wear and tear on the land for one thing, our crops for another thing, keeping track of our cattle. And we also had a rock quarry that we mined pictured flagstone. And we had to protect that because — one of [the] reasons for the locks on the gate was that people would come, if we weren’t home, and go — they knew where the rock quarry was and they would take rock. And that was part of our income.
Q. So are you certain that every time you left the property for an extended period of time you would lock the gate?
A. Yes.

Norma Jean Anderson testified that she “absolutely” made a conscious effort to keep people from traveling over the property. She indicated that she and her husband had a congenial relationship with Hugh Smith and that in the late 1970s or early 1980s they began interacting with Calvin Smith instead of his father. Mrs. Anderson testified that Calvin Smith would call in advance to use the roadway across Section 29 and that in her opinion, the calls were to “ask us if it was okay.” She indicated that “[y]ou could call [the arrangement] permission” and noted that if she knew in advance that Smith was coming, she would go down and unlock the gates — or if they were unlocked, she would say “[s]ure, go ahead. The gate’s open.”

Michael Anderson testified as follows:

Q: After you began ownership in Section 29 in 1975, what was your practice with respect to allowing other people to use this roadway?
A: Everyone that — anyone that wanted to use it at any time had to have permission.
Q: And did you ever deny permission?
A: Yes.
Q: With respect to neighbors in the area, did you establish a pattern of their use that implied a permission?
A: Well, the neighbors always called and sometimes they were denied. If we had the sprinkler pipe out — I mean, you can’t drive over the sprinkler pipe. And so, I wouldn’t say even a neighbor that might have had an implied permission if they wanted to use it, they were certainly always entitled to that but they weren’t entitled to drive over the sprinkler pipe and we didn’t shut off the sprinkler for them.
Q: When you say, “entitled”, what do you mean by that? In your—
A: By virtue of our grant of permission they would — and sometimes if they needed to go where we were sprinkling, we would outline one of the roads where they could maybe loop around the field or avoid the sprinkler pipe in some fashion.
Q: Backing up. When you purchased the property, did you find the gates locked?
A: Yes.
Q: Did you acquire the keys to the locks on those gates when you purchased the property?
A: Yes, I did.
Q: Since that time, have you continued to lock those gates on a regular basis?
A: Yes.

The record indicates that the Andersons and their predecessors in interest have exercised complete dominion and control over the roadway passing near their home in Section 29. The evidence indicates that gates over the roadway were used to control not only livestock, but also to restrict access to the property and to protect the property from theft. Any individuals, including the Smiths and their predecessors in interest, who used the road did so at the express or implied permission of the Andersons and their predecessors in interest. In Greenwalt Family Trust v. Kehler (1994), 267 Mont. 508, 885 P.2d 421, we stated that where there is a community understanding or a local custom of allowing neighbors to cross the edges of neighboring fields, it is considered permission. Greenwalt, 885 P.2d at 425. In the present case, such a pattern of neighborly accommodation persisted for years and we therefore determine that use of the roadway by Amerimont and the Smiths was not adverse and cannot ripen into a prescriptive easement.

We hold that the District Court’s findings of fact are supported by substantial evidence and are not otherwise clearly erroneous. The District Court correctly interpreted the law when it concluded that Amerimont and the Smiths do not possess a prescriptive easement over the Andersons’ property.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HUNT, NELSON and GRAY concur.


author: JUSTICE TRIEWEILER JUSTICE LEAPHART,

text:
    IN RE M.L.M., a minor child.
    No. 95-487.
    Heard April 19, 1996.
    Submitted May 8, 1996.
    Rehearing Denied November 14, 1996.
    Decided October 18, 1996.
    53 St.Rep. 978.
    278 Mont. 505.
    926 P.2d 694.

      For Appellant: Charles E. Petaja, Attorney at Law, Helena.
    For Respondent: Ann Gilkey, Special Assistant Attorney General, Department of Public Health and Human Services, Division of Child and Family Services, Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

On February 28, 1995, Nicolle Jean Will filed a petition for adoption in the District Court for the First Judicial District in Lewis and Clark County. The Department of Family Services (DFS) filed a motion to dismiss the petition on April 7, 1995. Following an oral argument, the District Court granted DFS’s motion to dismiss. Will appeals the District Court’s order granting the motion to dismiss. We reverse the order of the District Court and remand this case to the District Court for proceedings consistent with this opinion.

There are two issues on appeal:

1. Did the District Court err when it concluded that it lacked jurisdiction, pursuant to § 40-8-lll(l)(c), MCA, to review a petition for adoption absent the agency’s consent to adoption?

2. Did the District Cotut err when it concluded that pursuant to § 40-8-108, MCA, agency placement was a prerequisite to adoption?

FACTUAL BACKGROUND

The following facts are taken from Nicolle Will’s petition for adoption. However, since her petition was dismissed pursuant to Rule 12(b)(6), M.R.Civ.P, we presume the facts to be true for purposes of our review of the District Court’s order.

M.L.M. was abandoned by his biological parents shortly after his birth on December 16,1993. Thereafter, the DFS was granted custody of M.L.M. and placed him with Deborah Liggett, a licensed foster parent. On February 1,1994, shortly after M.L.M. was placed in her care, Liggett placed M.L.M. in the care of Nicolle Will. At that time, M.L.M. was only six weeks old.

From February 1,1994, until January 31,1995, Will had sole care and custody of M.L.M. and provided for all of M.L.M.’s needs without any compensation from either Liggett or DFS. During that one-year period, Will met with social workers, child resource specialists, and supervisors, and communicated to each her desire to adopt M.L.M. After one of DFS’s agents assured Will that she had a “99 percent chance” of adopting M.L.M., Will entered into and completed a ten-week adoption applicant course required by DFS.

On January 31, 1995, however, Deborah Liggett took physical custody of M.L.M. on behalf of DFS. Liggett informed Will that DFS had decided to place M.L.M. elsewhere for adoption.

On February 28,1995, Will filed a petition for adoption of M.L.M. in the First Judicial District Court. DFS filed a motion to dismiss Will’s petition. DFS maintained that the District Court did not have jurisdiction to grant Will’s petition because DFS had not given its consent to the adoption, pursuant to § 40-8-111, MCA, and because DFS had not placed M.L.M. with Will for adoption, pursuant to § 40-8-108, MCA. Following a hearing on July 27, 1995, the District Court granted DFS’s motion to dismiss. The court held that since the court was excluded from the list of those who may place a child for adoption pursuant to § 40-8-108, MCA, and since DFS had refused to consent to Will’s petition for adoption of M.L.M. pursuant to § 40-8-111, MCA, the court did not have jurisdiction to review the merits of Will’s petition for adoption.

ISSUE 1

Did the District Court err when it concluded that it lacked jurisdiction, pursuant to § 40-8-lll(l)(c), MCA, to review a petition for adoption absent the agency’s consent to adoption?

The District Court dismissed Will’s petition for adoption based in part on its conclusion that it did not have jurisdiction pursuant to § 40-8-lll(l)(c), MCA, to entertain a petition for adoption absent DFS’s consent to adoption. We review a district court’s conclusions of law to determine whether they are correct. In re Estate of Alcorn (1994), 263 Mont. 353, 355, 868 P.2d 629, 630.

Section 40-8-111, MCA, provides in relevant part:

(1) An adoption of a child may be decreed when there have been filed written consents to adoption executed by:
(a) both parents, if living, or the surviving parent of a child ...
(b) the legal guardian of the child if both parents are dead or if the rights of the parents have been terminated by judicial proceedings and the guardian has authority by order of the court appointing the guardian to consent to the adoption;
(c) the executive head of an agency if the child has been relinquished for adoption to the agency or if the rights of the parents have been judicially terminated or if both parents are dead and custody of the child has been legally vested in the agency with authority to consent to adoption of the child', or
(d) any person having legal custody of a child by court order if the parental rights of the parents have been judicially terminated. In that case, the court having jurisdiction of the custody of the child shall consent to adoption and a certified copy of its order must be attached to the petition.

(Emphasis added.) In this case, because M.L.M.’s biological parents’ rights had been judicially terminated, and because custody and the right to consent to M.L.M.’s adoption had been transferred to DFS, subsection (l)(c), which provides for consent by the head of the agency, was applicable. Because the agency refused to consent to Will’s adoption of M.L.M., however, DFS maintains that the District Court was without jurisdiction to review Will’s petition for adoption. In addition, DFS contends that the District Court was without jurisdiction to review the agency’s decision to withhold its consent to adoption.

Although § 40-8-lll(l)(c), MCA, predicates adoption on agency consent, it does not follow that the agency’s right to withhold consent is absolute. As this Court has recognized for more than fifty years:

[T]he power of the district court may at any time be invoked to guard and protect the welfare of the minor child. No statute may be so construed as to deprive the court of its jurisdiction in that respect.

State ex rel. Frederick v. District Court (1946), 119 Mont. 143, 150, 173 P.2d 626, 629 (emphasis added). In Frederick, we suggested that the district court’s jurisdiction could be invoked “to guard and protect the welfare of the minor child” if an agency’s denial of consent was arbitrary, capricious, or unreasonable. Frederick, 119 Mont, at 151, 173 P.2d at 630. Our decision in Frederick was premised on our recognition that the fundamental purpose of Montana’s adoption statutes was to protect the best interests of the child and that the ultimate decision as to the child’s best interests rested with the district court. Fifty years later, our statutory scheme still reflects those principles. See § 40-8-114, MCA (stating Montana’s policy to “ensure that the best interests of the child are met by adoption proceedings” and adding that “[t]he needs of the child must he the primary focus of adoption proceedings”); §§ 40-8-123 and -124, MCA (giving the district court authority to enter a final decree of adoption if the court is satisfied that the adoption is in the best interests of the child).

In the years since Frederick, however, this Court has erroneously elevated agency consent above the fundamental consideration of the child’s best interests. For example, in In re F.H. (1995), 272 Mont. 342, 901 P.2d 96, this Court held that a district court could not enter an order of adoption without a written consent to adoption executed by the executive head of DFS. F.H., 272 Mont, at 348, 901 P.2d at 100. In that case, the district court concluded after a hearing that “overwhelming, substantial, credible evidence” existed to establish that the best interests of the child would be served by granting the petition for adoption; this Court, however, refused to defer to that conclusion and, in effect, shielded the agency’s denial of consent from judicial scrutiny. F.H., 272 Mont, at 345,348,901 P.2d at 98,100. Our decision in F.H. may have been premised in part on language from an earlier case in which we stated:

The wording of the Montana [adoption] act itself and the public
policy of discouraging black market adoptions and private adoptions argue against judicial review of placement decisions.

Lewis v. Catholic Social Servs. (1992), 253 Mont. 369, 372, 833 P.2d 1023, 1025. The stated purpose of discouraging black market and private adoptions, however, is not inconsistent with the district court’s authority and responsibility to review placement decisions to assure that they do not arbitrarily ignore the child’s best interests. Frederick, 119 Mont, at 150, 173 P.2d at 629. Therefore, to the extent that our prior opinions in F.H. and Lewis conflict with our holding today that agency consent is subject to judicial review, we reverse those cases. We reaffirm our holding in Frederick that an agency’s refusal to consent to adoption is subject to judicial scrutiny for a determination of whether that refusal was arbitrary, capricious, or unreasonable.

Although we hold that an agency’s refusal to consent to adoption is reviewable pursuant to § 40-8-lll(l)(c), MCA, we recognize that a different issue is presented in those cases in which parental consent has been withheld pursuant to § 40-8-111(1)(a), MCA. In those cases, we have recognized that because of the harshness of terminating parental rights, and the protected liberty interest in parenthood, the statutory requirements for parental consent must be satisfied before the child’s best interests become paramount. See, e.g., In re V.R.O. (1991), 250 Mont. 517, 522, 822 P.2d 83, 86; In re S.T.V. (1987), 226 Mont. 18, 21, 733 P.2d 841, 842; In re Challeen (1977), 172 Mont. 362, 364, 563 P.2d 1120, 1121; In re Smigaj (1977), 171 Mont. 537, 539, 560 P.2d 141, 143; In re Biery (1974), 164 Mont. 353, 359, 522 P.2d 1377, 1380. In cases in which agency consent is a prerequisite to adoption, however, the requirement of consent is merely an additional safeguard to the child’s welfare. See, e.g., In re McKenzie (Minn. 1936), 266 N.W. 746, 747; In re Harshey (Ohio Ct. App. 1974), 318 N.E.2d 544, 548. In agency consent cases, therefore, the district court must retain the jurisdiction to review the agency’s decision to determine whether it is arbitrary, capricious, or unreasonable. Without such judicial scrutiny, “agency consent becomes superior to all other considerations, even those which ... are clearly of the gravest importance to the whole adoption program.” In re Haun (Ohio Ct. App. 1972), 286 N.E.2d 478, 481.

Our decision in this case is clearly in accord with the case law of other jurisdictions that have reviewed similar mandatory consent statutes. In fact, most courts, faced with similar statutory directives, have provided for judicial scrutiny of agency consent:

In some jurisdictions, the specific mandatory terms, of adoption statutes deprive a court of jurisdiction to render a judgment on an adoption petition without the consent of the agency or institution having the legal custody, and the right to consent to the adoption, of a child whose adoption is sought, at least where the concerns of the agency involved do not constitute arbitrary or unreasonable concerns. Other courts have determined that even so-called mandatory language of an adoption statute does not deprive the court of jurisdiction to determine an adoption petition where the best interests of the child are at stake.

2 Am. Jur. 2d Adoption § 94 at 987 (1994) (emphasis added) (citations and footnotes omitted). See also 2 C.J.S. Adoption of Persons § 55 at 473-74 (1972). Most courts that address the issue of agency consent cite In re Haun (Ohio Ct. App. 1972), 286 N.E.2d 478. In Haun, the Ohio Court of Appeals was called upon to interpret a provision of the Ohio adoption act which provided that absent agency consent no final decree of adoption could be entered. That court held:

[T]he requirement of agency consent was not intended by the legislature to give an unnatural parent an arbitrary, unreasonable or capricious power to defeat judicial review and, coincidentally, impede, in a specific case as in this instance, the objectives of securing qualified adoptive parents and promoting the best interests of a child available for adoption.

Haun, 286 N.E.2d at 481. Other courts, in accord with Haun, have held that a facially absolute requirement of agency consent does not deprive a trial court of jurisdiction to review agency denial of consent. See, e.g., In re Roberts (Ala. Civ. App. 1977), 349 So. 2d 1170, 1172; Stines v. Vaughn (Ill. App. Ct. 1974), 319 N.E.2d 561, 567; Stout v. Tippecanoe County Dep’t of Pub. Welfare (Ind. Ct. App. 1979), 395 N.E.2d 444, 451; Fleming v. Hursh (Minn. 1965), 136 N.W.2d 109, 113; M. v. Family & Children’s Serv., Inc. (N.J. Super. Ct. 1974), 326 A.2d 74, 77; Oxendine v. Catawba County Dep’t of Social Servs. (N.C. 1981), 281 S.E.2d 370, 376; State ex rel. Dep’t of Inst., Social and Rehab. Servs, o. Griffis (Okla. 1975), 545 P.2d 763, 768. In those cases in which the agency’s refusal to consent is contrary to the best interests of the child, courts recognize that “the trial court is wholly justified in proceeding as if the consent which ought to have been given had been given.” McKenzie, 266 N.W. at 748.

In this case, because of the District Court’s erroneous conclusion that § 40-8-lll(l)(c), MCA, precluded it from reviewing Will’s petition, the court did not undertake a hearing to determine whether the agency’s refusal to consent was arbitrary, capricious, or unreasonable. Based on our holding that an agency’s refusal to consent is subject to judicial review, and based on our holding that such review cannot be made without a determination of the child’s best interests, we reverse the order of the District Court which granted DFS’s motion to dismiss and remand to the District Court for a hearing to determine whether the agency’s refusal to consent to Will’s petition for adoption was arbitrary, capricious, or unreasonable.

ISSUE 2

Did the District Court err when it concluded that pursuant to § 40-8-108, MCA, agency placement was a prerequisite to adoption?

In its order dismissing Will’s petition for adoption, the corut concluded that pursuant to § 40-8-108, MCA, a district court does not have statutory authority to overrule an agency’s placement decision and to place a child elsewhere for adoption. As stated above, this Cotut reviews a district court’s conclusions of law to determine if they are correct. In re Estate of Alcorn (1994), 263 Mont. 353, 355, 868 P.2d 629, 630.

Section 40-8-108, MCA, provides that:

A child may be placed for adoption only by:

(1) the department;

(2) a licensed child-placing agency; or

(3) the child’s parents.

Section 40-8-103(14), MCA, defines “placement for adoption” as “the transfer of physical custody of a child with respect to whom all parental rights have been terminated and who is otherwise legally free for adoption to a person who intends to adopt the child.”

In Lewis v. Catholic Social Services (1992), 253 Mont. 369, 833 P.2d 1023, this Court interpreted § 40-8-108, MCA, to constrain courts from effecting placement of children for adoption. We stated:

Section 40-8-108, MCA restricts who may place a child for adoption and does not include courts in its list of who may place a child for adoption. Therefore it is clear that the courts could not place Baby Girl W. with the Lewises.

Lewis, 253 Mont, at 372, 833 P.2d at 1025. In addition, we held that Montana’s adoption statutes and public policy compelled a holding that the agency’s placement decision was not subject to judicial review. Lewis, 253 Mont, at 372, 833 P.2d at 1025. The Lewis decision was followed by this Court in In re F.H. (1995), 272 Mont. 342, 901 P.2d 96.

Our decisions in Lewis and F.H. failed to recognize, however, that pursuant to Montana’s statutory adoption scheme, placement is not a prerequisite to a district court’s determination of the merits of an adoption petition. Section 40-8-121, MCA, sets forth the requirements for a petition for adoption. That section provides:

(1) A petition for adoption must be filed in duplicate, verified by the petitioners, and must specify:
(a) the full names, ages, and place of residence of the petitioners and, if married, the place and date of the marriage;
(b) when the petitioners acquired or intend to acquire custody of the child and from what person or agency,
(c) the date and place of birth of child, if known;
(d) the name used for the child in the proceeding and, if a change in name is desired, the new name;
(e) that it is the desire of the petitioners that the relationship of parent and child be established between them and the child;
(f) a full description and statement of value of all property owned or possessed by the child;
(g) facts, if any, which excuse consent on the part of a parent to the adoption.
(2) One copy of the petition must be retained by the court. The other must be sent to the department of public health and human services or to the child-placing agency participating in the adoption proceeding.
(3) Any written consent required by this part may be attached to the petition or may be filed after the filing of the petition, with the consent of the court.

(Emphasis added.) Although, pursuant to § 40-8-121, MCA, the petitioner is required to file a copy of the requisite consent to adoption, there is no parallel requirement that the petitioner file evidence of placement of the child prior to the filing of the petition. Instead, the statute requires only that the petitioner specify when and from whom he or she will acquire custody of the child. Section 40-8-121(l)(b), MCA. Because placement of the child by DFS, a licensed child-placing agency, or the child’s parents, is not a prerequisite to the filing of a petition for adoption, the district court clearly has authority to review the merits of a petition without evidence of such placement.

The same conclusion was reached by the Court of Appeals of Indiana in Stout v. Tippecanoe County Department of Public Welfare (Ind. Ct. App. 1979), 395 N.E.2d 444, 451-52. In Stout, the County Department of Public Welfare maintained that without placement of a child for adoption “the statutory law provides that no petition for adoption can be granted.” Stout, 395 N.E.2d at 451. The Indiana Court of Appeals, however, reviewed Indiana’s adoption scheme in its entirety and concluded that although there was a statute mandating how placement should be made, there was no requirement that the court find that such placement had been effected prior to the court’s review of the petition for adoption. On the issue of placement, the court stated:

Although certainly a desirable method of realizing the best interests of the child, placement by a licensed agency or department is not made a condition to the trial court’s decision of the merits of an adoption.
In those jurisdictions we have found in which placement by the welfare department or child-placing agency is a prerequisite to adoption, the statutes specifically provide for this requirement. We therefore hold placement by the Department in the Stout’s home was not a prerequisite to the trial court’s consideration of the merits of Stout’s petition.

Stout, 395 N.E.2d at 451-52 (footnotes omitted). In arriving at its conclusion, the court cited statutes from Kentucky, Delaware, and Connecticut which clearly required that a petitioner could not file a petition for adoption until the child had been properly placed in his or her home for adoption. Stout, 395 N.E.2d at 452, fn. 13. Montana’s statutes, like Indiana’s, do not have such a requirement.

Furthermore, as we stated above, where the best interests of the child are at stake, a district court clearly retains jurisdiction to review an agency’s decision. State ex rel. Frederick (1946), 119 Mont. 143, 150, 173 P.2d 626, 629. Therefore, in the event that an agency’s placement decision is at issue, we hold that the district court has jurisdiction to review that decision to ensure that it is not arbitrary, capricious, or unreasonable. To the extent that our prior opinions in Lewis and F.H. conflict with this holding, we reverse those cases.

On the basis of our holding that the District Court has jurisdiction to review DFS’s refusal to consent to Will’s petition for adoption of M.L.M. to determine whether that refusal was arbitrary, capricious, or unreasonable, and on the basis of our holding that the District Court has jurisdiction to review Will’s petition for adoption without evidence that DFS placed M.L.M. with Will for adoption, we reverse the order of the District Court which granted DFS’s motion to dismiss. We remand this case to the District Court for a hearing to determine whether the agency’s refusal to consent to Will’s petition for adoption was arbitrary, capricious, or unreasonable, and if so, to decide the merits of Will’s petition.

JUSTICES HUNT, NELSON and ERDMANN concur.

JUSTICE LEAPHART,

specially concurring.

I concur in the Court’s opinion. Although I agree that § 40-8-108, MCA, does not require agency placement as a prerequisite to adoption, I have concerns as to the implications of our decision. We have held that Nicole Will could file a petition to adopt M.L.M., and that the court had jurisdiction to review her petition despite the fact that the agency had not placed the child with Will for adoption. Although Will had significant connections with the child in question, Will was neither a relative nor a foster parent of M.L.M. The question thus arises, are there any restrictions as to who can file a petition for adoption and thereby invoke the court’s jurisdiction to review an agency denial of that petition? Is there any reason that a complete stranger could not obtain information about children in the custody of DFS and then file a petition to adopt one or more of those children? If DFS refuses consent, the petitioner could then seek judicial review. Likewise, there appears to be no restriction on the number of couples that could petition to adopt the same child. Given the number of couples seeking to adopt children, it is certainly not hard to envision a situation where three or more deserving couples file petitions to adopt the same child thus creating a “bidding war” as to who will provide the biggest house, best education, health care, etc. Since there are no legal criteria to determine which of several meritorious petitions should be granted, any decision by DFS to choose one couple over another would be subject to being challenged as “arbitrary and capricious.” Those petitioners who are unsuccessful in their bid at the agency level would then be off to district court to take their chances with the judge. Although I do not see anything in the law which would prevent the above scenario, I doubt that such a “competitive,” litigious adoption procedure is any more in the child’s best interests than the prior procedure under which agency consent was absolute and beyond judicial review.

CHIEF JUSTICE TURNAGE and JUSTICE GRAY join in the specially concurring opinion of JUSTICE LEAPHART.