Southwest Montana Building Industry Association v. City of Bozeman

          Submitted on Briefs: March 7, 2018

          APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 99-71 Honorable David Cybulski, Presiding Judge

         COUNSEL OF RECORD:

          For Appellant: Arthur V. Wittich, Montana Law Company; Bozeman, Montana

          For Appellee: J. Robert Planalp, Patrick C. Riley, Planalp, Reida, Roots & Riley, P.C.; Bozeman, Montana

          OPINION

          INGRID GUSTAFSON JUSTICE

         ¶1 Southwest Montana Building Industry Association (SWMBIA) appeals three orders of the Eighteenth Judicial District Court, Gallatin County, which directed SWMBIA to transfer funds from the Impact Fee Payer Class Refund Account (Refund Account) to the City of Bozeman (Bozeman), to submit an accounting of the Refund Account, and for contempt of court. We affirm.

         ¶2 We restate the issues on appeal as follows:

1. Did the District Court exceed its authority when it ordered SWMBIA to transfer the funds remaining in the Refund Account to Bozeman?

2. Is the District Court's December 19, 2011 Order regarding the transfer of the remaining Refund Account funds enforceable?

3. Did the District Court err by not disposing of the remaining Refund Account funds in accordance with M. R. Civ. P. 23(i)(3)?

4. Did the District Court abuse its discretion when it ordered SWMBIA to provide an accounting of the Refund Account?

5. Can SWMBIA obtain relief from the District Court's contempt order?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶3 This case concerns the final disposition of approximately $227, 000 remaining from a class action settlement. These funds currently reside in the Refund Account, which the District Court established and placed in SWMBIA's control to provide refunds to certain individuals and business entities who had paid "impact fees."

         ¶4 Pursuant to an ordinance adopted in 1996, Bozeman assessed these impact fees against property owners within certain "impact fee districts" for street, water, wastewater, and fire protection. Bozeman collected the fees as a precondition to obtaining permits for construction or connecting to city services.

         ¶5 In 1998, Bozeman increased some of the impact fees, and a citizens' group submitted an initiative petition to further raise the fees for street, water, and wastewater. Voters approved this initiative and the increases became effective January 15, 1999.

         ¶6 On February 17, 1999, SWMBIA, a non-profit organization whose members include businesses involved in residential and commercial construction in Bozeman and the surrounding area, sued for declaratory relief. SWMBIA alleged the impact fee ordinances and their amendments were unconstitutional. SWMBIA did not itself pay impact fees, but it represented the interests of its members who had paid, and continued to pay, them. Among other relief, SWMBIA requested class action certification and a refund to the fee payers.

         ¶7 Over the next few years, SWMBIA amended its complaint and joined additional plaintiffs. The District Court granted SWMBIA's motion to certify the class, defining it as all persons and entities who paid or will pay an impact fee due to the 1996 ordinance or its amendments. The District Court designated SWMBIA as the class representative and SWMBIA's counsel, Arthur V. Wittich (Wittich), as class counsel.

         ¶8 After several years of litigation, the parties submitted a proposed settlement agreement to the District Court. On April 15, 2005, the District Court entered a Consent Decree and Judgment (Consent Decree) in which it declared Bozeman's impact fee ordinances and their amendments, and all impact fees assessed and collected thereto, were valid and enforceable. Bozeman would pay the court $5, 000, 000, and these funds would be used to distribute partial refunds to the certified class and to pay Wittich as class counsel. Bozeman would also temporarily reduce its impact fee rates and employ a consultant to advise it on determining appropriate rates for future impact fees.

         ¶9 After receiving $5, 000, 000 from Bozeman, the District Court awarded Wittich attorney fees of $500, 000. The District Court held all eligible class members who paid impact fees on or after July 1, 2001, would receive a 10% refund out of the settlement funds, "and those paying to the City under general governing powers prior to July 1, 2001 shall receive the balance of the lump sum payment as refunds." The District Court transferred ...