Submitted on Briefs: April 4, 2018
District Court of the Fourth Judicial District, In and For
the County of Missoula, Cause No. DV-14-352 Honorable Karen
Townsend, Presiding Judge
Appellant Mountain Water Company: William T. Wagner, Stephen
R. Brown, Kathleen L. DeSoto, Garlington, Lohn &
Robinson, PLLP, Missoula, Montana Joe Conner, Adam Sanders,
Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C.,
Appellants: William W. Mercer, Kyle Anne Gray, Brian M.
Murphy, Billings, Montana (for Carlyle Infrastructure
Partners, LP) Michael W. Green; D. Wiley Barker, Crowley
Fleck PLLP, Helena, Montana
Appellee: Scott M. Stearns, Natasha Prinzing Jones, Zachary
Aaron Franz, Randy J. Tanner, Boone Karlberg P.C., Missoula,
Montana William K. VanCanagan, Datsopoulos, MacDonald &
Lind, P.C., Missoula, Montana Harry H. Schneider, Jr.,
Perkins Coie LLP, Seattle, Washington
Appellant Mountain Water Company (Mountain Water) appeals
from the November 9, 2017 order of the Fourth Judicial
District Court, Missoula County, denying Mountain Water's
motion for post-summons interest.
We restate the issue on appeal as follows:
Whether the District Court erred when it determined
Mountain Water was not entitled to interest pursuant to
§ 70-30-302(2), MCA.
AND PROCEDURAL BACKGROUND
Mountain Water operated a water delivery system located in
and around Missoula, Montana. On May 5, 2014, the City of
Missoula (the City) filed an amended complaint seeking
condemnation of the water system. The Fourth Judicial
District Court issued a Preliminary Order of Condemnation
under § 70-30-206, MCA, on June 15, 2015. This Court
affirmed the Preliminary Order of Condemnation in City of
Missoula v. Mt. Water Co., 2016 MT 183, 384 Mont. 193,
378 P.3d 1113.
On October 26, 2015, the District Court concluded that §
70-30-302(5), MCA, which provides that an award of
compensation does not include improvements made to condemned
property, was unconstitutional as applied to Mountain Water.
Therefore, Mountain Water sought compensation for
improvements made to the condemned property after May 5,
2014. A Condemnation Commissioner hearing was held in
November 2015 to determine the amount of just compensation.
The Commissioners determined that the fair market value of
the water system, including all improvements, was $88.6
Following the Commissioners' valuation, Mountain Water
sought interest for the time period prior to the City taking
possession based on the Commissioners' $88.6 million
valuation. On April 6, 2016, the District Court denied an
award of interest concluding the plain language of §
70-30-302(2), MCA, in conjunction with § 70-30-311, MCA,
did not entitle Mountain Water to post-summons interest
because the City never took interlocutory possession of the
On May 3, 2016, the District Court determined Mountain Water
and Carlyle were prevailing parties entitled to recover
necessary expenses pursuant to § 70-30-305(2), MCA.
After an evidentiary hearing, the District Court awarded
Carlyle $1, 111, 659.94 and Mountain Water $2, 800, 745.57
for litigation expenses. However, Carlyle's litigation
expenses remain in escrow pending the outcome of the appeal
to the Montana Supreme Court.
The City then moved for the Court to "oversee and
supervise the transition of ownership and possession."
The City specifically sought access to data such as customer
and human resource information prior to taking possession. On
January 4, 2017, the District Court granted the City limited
access to Mountain Water's data to ensure a smooth
transition of the public utility. However, the District Court
repeatedly stated giving limited access to the City did not
grant the City a possessory right in the water system.
Consequently, the District Court rejected Mountain
Water's argument that allowing the City access to limited
data qualified as a transfer of possession pursuant to §
On June 5, 2017, Mountain Water and the City entered into a
Settlement Agreement. The Settlement Agreement provided the
City would take possession of Mountain Water's condemned
property simultaneously upon the City paying Mountain Water
for all assets and claims asserted in the condemnation action,
the FBO refunds and the Carlyle Litigation Expenses. The
Settlement Agreement provided the City would pay
approximately $84 ...