Burk Ranches, Inc. v. State
| Decision Date | 16 May 1990 |
| Docket Number | No. 89-145,89-145 |
| Citation | 242 Mont. 300,790 P.2d 443 |
| Parties | BURK RANCHES, INC., A Montana corp., Plaintiff and Respondent, v. STATE of Montana and State of Montana for State Fish and Game Commission, Defendants and Third-Party Plaintiffs and Appellants, v. John W. RIEBER, Jr., Guy Holt, Mack Poole and Larry Bradley, Third-Party Defendants and Respondents. John W. RIEBER, Michele Rieber and Rieber Ranch, A Montana corp., Plaintiffs and Respondents, v. STATE of Montana; and Department of Fish, Wildlife and Parks, Defendants, Third-Party Plaintiffs and Appellants, v. Guy HOLT, Mack Poole, and Larry Bradley, Third-Party Defendants and Respondents. |
| Court | Montana Supreme Court |
Donald Robinson, Poore, Roth & Robinson, Butte, Steve Reida, Landoe, Brown, Planalp & Kommers, Bozeman, for plaintiff and respondent.
The State of Montana appeals from a negligence action in the District Court of the Fifth Judicial District, Beaverhead County, arising out of the collapse of the Brownes Lake Dam. The District Court held all parties liable as a matter of law, and the jury apportioned 100% of the liability to the State and awarded actual and future damages to downstream ranchers.
We reverse and remand.
The State of Montana raises the following issues on appeal:
1. Whether the District Court erred in not dismissing plaintiff Rieber's claim for future damages resulting from his loss of irrigation capacity.
2. Whether in apportioning no negligence to the plaintiff and third-party defendants the jury disregarded the District Court's instructions that all parties were liable.
3. Whether the jury's award of future damages to the plaintiff for lost hay crops, decreased capital value, and increased pasture expenses was excessive as triple compensation for the same injury.
Sometime prior to 1894, Joseph Browne constructed the Brownes Lake Dam on his patented mining claim near Glenn, Montana. Designed to store irrigation water from Rock Creek, the dam raised the natural level of Brownes Lake by eight feet. In 1923, the Beaverhead County District Court apportioned the water rights to Rock Creek and enjoined all parties and successors owning ditch, water, or reservoir rights, or any interest therein, from interfering with the irrigation system. Wood Livestock Co. v. Jensen (5th D.Mont. April 25, 1923).
In 1963 the State of Montana purchased the lake and surrounding land as a recreational site under the control of the State Fish and Game Commission (presently known as the Department of Fish, Wildlife and Parks). The State has filed an as yet unadjudicated claim to a nonconsumptive, recreational, water right. Other water rights holders include John W. Rieber, Guy Holt, Mack Poole, and Larry Bradley [hereinafter water users], the present successors in interest to the parties subject to the 1923 decree. During the State's ownership of the dam, the water users maintained exclusive control of the headgate on Brownes Lake Dam regulating water flow to irrigate their ranches.
Both the State and the water users were aware that the dam was unstable. The State first noted that the dam was old and seeping water in May of 1976. In 1979, the United States Forest Service and the Montana Department of Natural Resources and Conservation inspected the dam and informed the State that it was hazardous. The Forest Service felt that its deteriorating condition could lead to a collapse which would damage public and private land and possibly cause loss of life. In the winter of 1979-80 the State met with some of the water users informing them of the condition of the dam. The State told the water users that they could either take responsibility for maintaining the dam or the State would breach it the following spring. No action was taken by either party. In April of 1981, the Army Corps of Engineers Burk Ranches, Inc., which did not use the irrigation system, filed suit against the State for damage caused by the dam's outwash. Water user Rieber filed against the State for outwash damage and loss of irrigation capacity. In both cases the State joined the nonparty water users as third-party defendants. The State settled with Burk Ranches for $134,000, but retained its action for contribution against the water users.
again informed the State that inspection showed the dam to be in poor condition. Three years later, the dam collapsed damaging the property of downstream ranchers and eliminating the storage system.
Prior to trial, the State admitted liability and the District Court entered summary judgment holding the State and water users jointly and severally liable because they both had a duty to maintain the dam. The court joined the two actions for trial in which the jury was to determine Rieber's damages and to apportion damages between the State and the water users. The jury returned a verdict of $219,478 for Rieber and found the State 100% liable. The State now appeals both decisions.
The parties stipulated that Rieber's past special damages totaled $8,998 and the jury found $55,000 in general damages and $155,480 in future special damages. The State contests only the latter award which included damages for decreased capital value, thirty years of loss of hay crops, ten years of increased irrigation labor costs, and thirty years of increased pasturage expenses, all resulting from Rieber's lost irrigation capacity.
The State argues that, although there is no on-point Montana law, the majority of jurisdictions hold that a landowner has no duty to maintain an artificial impoundment for the benefit of other water users absent a statute or covenant to the contrary. See A. Tarlock, Law of Water Rights and Resources, Sec. 3.08(1)-(3) (1989). The State also argues that it was not a successor to water rights created by the 1923 apportionment and, therefore, was not enjoined by the 1923 decree from destroying the dam, or allowing its destruction. Since the State had no duty to maintain the dam for irrigation purposes, it asserts that it is not liable for damages arising from Rieber's lost irrigation capacity.
Who is liable for the maintenance of artificial impoundments is an important question that will undoubtedly arise again as Montana's reservoirs continue to age. That, however, is not the present question. The State's argument attempts to correlate specific types of duties with liability for specific types of damages. The State asserts that it is not liable for loss of irrigation since it had no duty to maintain the dam for irrigation purposes. While this duties-and-damages correlation had meager support at one time, it has been uniformly rejected in modern tort law. W. Keeton, Prosser and Keeton on Torts, Sec. 43 at 289-90 (5th ed.1984); Restatement (Second) of Torts Sec. 281, comment j (1965).
Montana law provides that tortfeasors are liable for all damages caused in fact and proximately caused by their negligence, Sec. 27-1-317, MCA, including reasonably certain future damages, Sec. 27-1-203, MCA. The State admitted liability for the collapse of the dam apparently relying on a landowner's duty to warn about, and make safe, hazardous conditions. See Restatement (Second) of Torts Secs. 364, 370 (1965). As the State itself argues, a finding of liability includes causation-in-fact and proximate causation. The State, therefore, is liable for Rieber's reasonably certain future damages as determined by the jury's apportionment of negligence, see Sec. 27-1-703, MCA, regardless of what type of duty it owed. The future damages awarded by the jury, however, were not reasonably certain and did not comply with the appropriate measure of damages.
Although no single measure of damages can serve in every case to adequately compensate an injured party, the general rule in Montana is that the measure of damages for permanent injuries to real property is the difference between the value of the property before and after the Earl Love gave most of the damages evidence. As the former district conservationist for the Dillon Soil Conservation Service, Love was familiar with the Rieber ranching operation before the dam collapsed. After the collapse he was hired to monitor and analyze the impact of the lost irrigation capacity on the Rieber ranch. He gave the jury his opinion of the ranch's decreased capital value based on lost hay production, lost aftermath grazing, and increased pasturage fees.
injury. 1 Watson v. Colusa-Parrot Mining & Smelting Co. (1905), 31 Mont. 513, 518, 79 P. 14, 15; see also Kebschull v. Nott (1986), 220 Mont. 64, 67, 714 P.2d 993, 995. This measure of damages avoids problems of double and speculative damages as is amply illustrated by Rieber's award of damages for both lost irrigation and decreased capital value
Love's opinion demonstrates that the award constitutes double damages for the same injury. When the landholder recovers damages based on the decreased value of ranch and farm property, damages for lost crops constitute double damages and are not recoverable. Wheatland Irrigation Dist. v. McGuire (Wyo.1977), 562 P.2d 287, 298; Manning v. Woodlawn Cemetery Corp. (1921), 239 Mass. 5, 131 N.E. 287, 288; Kugel v. Village of Brookfield (1944), 322 Ill.App. 349, 54 N.E.2d 92, 96. Love's valuation of the property after injury necessarily took into account the inability of the land to produce at pre-injury levels. Loss of use is an appropriate factor to be considered in determining decreased value; it is not a separately compensable item of damages.
The evidence also demonstrates that the damages failed to satisfy the statutory requirement of reasonable certainty. See Sec. 27-1-203, MCA. The damages for thirty years of lost hay crops and for thirty years increased pasturage...
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