Axtell v. M.S. Consulting

• Decision Date: 24 March 1998
• Docket Number: No. 97-346,97-346
• Citation: 1998 MT 64,955 P.2d 1362
• Parties: Thomas D. AXTELL and Carmen D. Axtell, Plaintiffs and Respondents, v. M.S. CONSULTING, et al., Defendants and Appellants.
• Court: Montana Supreme Court

Page 1362

955 P.2d 1362

1998 MT 64

Thomas D. AXTELL and Carmen D. Axtell, Plaintiffs and Respondents, v. M.S. CONSULTING, et al., Defendants and Appellants.

No. 97-346.

Supreme Court of Montana.

Submitted on Briefs Oct. 9, 1997.

Decided March 24, 1998.

William A. Hritsco, Davis, Warren & Hritsco, Dillon, Montana, for Appellants,

W.G. Gilbert, III, Dillon; Robert C. Griffin, Herndon, Sweeney & Halverson, Billings (defendant Rowe), for Respondents.

HUNT, Justice.

¶1 M.S. Consulting, et al. (M.S. Consulting) appeal from the summary judgment and decree entered by the Fifth Judicial District Court, Madison County, quieting title to certain water rights in favor of Thomas D. Axtell and Carmen D. Axtell (the Axtells). We reverse and remand.

¶2 The following issue is dispositive of this case:

¶3 Did the District Court err in holding that no genuine issues of material fact existed and that summary judgment was proper?

BACKGROUND

¶4 M.S. Consulting is the owner of a 110-acre parcel of land located east of Sheridan, Montana in Madison County (hereinafter the "large parcel"). Within this large parcel lies a 2-acre parcel owned by the Axtells (hereinafter the "small parcel"). The Axtells own a house and operate a machine shop on the small parcel. Eclipse Creek runs through both the large and small parcels. Located on the large parcel, but beyond the perimeter of the small parcel are several springs. Over the years, the Axtells and their predecessors in interest have used one of these springs for their domestic water needs. It is the water rights to this spring which is the subject of the parties' dispute.

¶5 Prior to 1951, the large and small parcels were a single parcel owned by Nellie Clemo Duncan. Ms. Duncan lived in a small house located east of Eclipse Creek on what ¶6 Florence W. Baker was a close friend and neighbor who took care of Ms. Duncan. Ms. Baker's daughter, Shirley McLaren (McLaren), testified that she assisted her mother in taking care of Ms. Duncan by packing the water from either the spring or Mill Creek to the house. McLaren testified that before she left the area in 1953, Ms. Duncan's water needs were met by spring water which traveled from the spring via galvanized pipe to a spigot located just outside the home.

is now the small parcel. Ms. Duncan's granddaughter, Janet Kentfield (Kentfield), who lived with Ms. Duncan from 1936 until 1943, testified that her grandmother's house had no electricity or indoor plumbing, and that their water needs were met by going either to the spring on the large parcel, or to nearby Mill Creek, and packing home buckets of water every day. It appears from the facts that the water from Eclipse Creek was not suitable for drinking. Kentfield testified that located west of Eclipse Creek, still on what is now the small parcel, was another small cabin that her grandmother used for storage. When Ms. Duncan's house burned down sometime after 1943, she fixed up the small storage cabin and moved there. Kentfield testified that this second home likewise had no electricity or indoor plumbing. Although Kentfield moved away in 1943, she visited her grandmother periodically. It was Kentfield's belief that from 1943 until her grandmother's death in 1950, her grandmother continued to have water packed from the spring or from Mill Creek to her home. Kentfield testified that during the years she lived with and visited her grandmother, she never saw nor was made aware of any pipes, spigots, or other devices carrying water from the spring to Ms. Duncan's home.

¶7 On May 9, 1950, the elderly Ms. Duncan conveyed her property to Ms. Baker. Ms. Duncan continued to live on the property until her death on August 10, 1950. Thereafter, the house was vacant.

¶8 On June 15, 1951, Ms. Baker divided the property by conveying the large parcel to H.H. Halse (Halse) and reserving the small parcel. The deed from Ms. Baker to Halse conveyed the stated portion of land "[t]ogether with all and singular the tenements, hereditaments, and appurtenances thereunto belonging or in anywise appertaining." The deed made no mention of water rights. Ms. Baker owned the small parcel for the next ten years and the house continued to remain vacant.

¶9 On September 6, 1961, Ms. Baker sold the small parcel to Milton and Marilyn Hunt (the Hunts). The deed from Ms. Baker to the Hunts expressly conveyed "full right to all water or water rights on said property." In 1962, the Hunts constructed a home on the small parcel west of Eclipse Creek. Ms. Hunt testified that there were no sources other than Eclipse Creek from which to supply their new home with water. Despite the conveyance of water rights in their deed, the Hunts asked Halse for permission to use water from the spring on the large parcel. Halse agreed and permitted the Hunts to construct a water collection box at the spring and bury plastic water pipes from the spring to their home site. Ms. Hunt testified that during construction of the spring water conveyance system, she and her husband discovered no other buried pipes or evidence of a pre-existing water conveyance system which would have carried water from the spring to the small parcel. Ms. Hunt also stated that she used the former Nellie Clemo Duncan cabin for storage and that it had no indoor plumbing. She stated she never saw nor was she aware of any pipe or spigot conveying water to the cabin.

¶10 Ms. Hunt testified that after building the spring water conveyance system, she, her husband, and Halse entered into a signed, written 99-year lease of the spring water. However, neither party has been able to locate this lease. On December 17, 1963, Halse filed a Declaration of Vested Groundwater Rights for the "total flow of all springs" located on the large parcel.

¶11 In October, 1975, the Hunts sold the small parcel to Thomas Walter (Walter). Walter testified that he purchased the small parcel with a loan from the Veterans Administration who, before approving the loan, warned Walter that his spring water rights were not secure and that he may some day have to find another water source or drill a ¶12 Walter also testified that during his ownership of the small parcel, he buried a half-inch metal pipe across the small parcel, past the Duncan cabin, and up to the top of an adjacent mountain where a television antennae was located. Walter testified that within the pipe he inserted television cables and that he undertook this project to obtain better television reception at his house.

well. At the time, the large parcel, formerly owned by Halse, was now owned by Floyd Fossceco (Fossceco). Walter testified that he continued to use the spring water conveyance system that the Hunts had installed, and that Fossceco never made an issue of water rights.

¶13 In June, 1984, Walter agreed to sell the small parcel to Ralph Hamler (Hamler). To purchase the parcel, Hamler applied for a loan with the Farmer's Home Administration (FHA). The FHA would not approve the loan because the water supply to the house did not meet FHA specifications. For the loan to be approved, the FHA required Walter to drill a well and plumb the house accordingly. Walter complied with this request, and in so doing, installed a valve in the basement of the house so that one could easily alternate between using well water and spring water. Walter then sold the small parcel to Hamler.

¶14 On May 15, 1990, the Axtells purchased the small parcel. Soon thereafter, the Axtells demolished the former Nellie Clemo Duncan cabin, burned it, and discovered remnants of old half-inch galvanized pipe that had not burned. In 1991, the Axtells hired Joe Tezak (Tezak) to excavate a portion of their land for a machine shop they were planning to build for their business of manufacturing rifle sights and target rifles. During this excavation, Tezak discovered an old galvanized pipe approximately one and a half feet below the level at which the plastic water pipes had been buried. In 1992, the Axtells completed construction of the machine shop and plumbed it so that they could alternate between both well water and spring water. The Axtells mostly used spring water for their needs in the machine shop.

¶15 On December 10, 1993, the Axtells filed with the Montana Department of Natural Resources and Conservation a Notice of Water Right to "developed springs" with a diversion rate of sixteen gallons per minute. On the form, the Axtells indicated that they used the spring water for both domestic and livestock purposes.

¶16On December 15, 1993, Fossceco sold the large parcel to M.S. Consulting. Fossceco represented to M.S. Consulting that the Axtells' use of spring water was by permission only. Immediately after closing on their purchase, M.S. Consulting filed a Notice of Water Right on all the springs located on the large parcel, unaware that the Axtells had filed their Notice of Water Right to the spring a few weeks earlier.

¶17 In August, 1995, M.S. Consulting excavated a pond and constructed a dam on the large parcel. During the excavation process, the Axtells' plastic spring water pipe was accidentally severed. The water pipe was temporarily fixed but left on top of the ground pending completion of the dam. The Axtells requested M.S. Consulting to re-bury the pipes but M.S. Consulting refused. After several failed negotiations in trying to resolve the matter, M.S. Consulting gave the Axtells written notice that their water arrangement was terminated and that the Axtells' spring water supply would be cut off in forty-five days. On October 15, 1995, M.S. Consulting cut off the Axtells' spring water supply.

¶18 The Axtells responded by filing a complaint and obtaining an ex parte temporary restraining order (TRO) allowing them to re-connect the water line. A week later, a hearing was held on the matter of the TRO after which the District Court issued a temporary injunction enjoining M.S. Consulting from further interference with the Axtells' spring water...