Byrum v. Andren

• Decision Date: 01 May 2007
• Docket Number: No. 04-483.,04-483.
• Citation: 337 Mont. 167,159 P.3d 1062,2007 MT 107
• Parties: George BYRUM and Virginia Byrum, Plaintiffs and Appellants, v. Paul ANDREN, Joan Andren, L.W. Jones, Lori Jones, Robert Clark, and Leslie Clark, Defendants, Respondents and Cross-Appellants.
• Court: Montana Supreme Court

159 P.3d 1062

2007 MT 107

337 Mont. 167

George BYRUM and Virginia Byrum, Plaintiffs and Appellants, v. Paul ANDREN, Joan Andren, L.W. Jones, Lori Jones, Robert Clark, and Leslie Clark, Defendants, Respondents and Cross-Appellants.

No. 04-483.

Supreme Court of Montana.

Submitted on Briefs May 17, 2005.

Decided May 1, 2007.

For Appellants: Holly Jo Franz, Franz & Driscoll, Helena, Montana.

For Respondents: J. Blaine Anderson, Jr. Attorney at Law, Dillon, Montana (Andrens), John Bloomquist, Abigail St. Lawrence, Doney, Crowley, Bloomquist & Uda, Helena, Montana (Jones), Stephanie Gehres Kruer, Attorney at Law, Sheridan, Montana (Clarks).

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 George Byrum and Virginia Byrum (Byrums) appeal the findings of fact and conclusions of law entered by the District Court for the Fifth Judicial District, Madison County, determining that Paul Andren, Joan Andren, L.W. Jones, Lori Jones, Robert Clark, and Leslie Clark (hereafter referred to either individually or collectively as Respondents) did not breach the 1998 Settlement Agreement (Settlement Agreement) between the parties. Respondents further cross-appeal on various issues. We affirm in part, reverse in part and remand for further proceedings consistent with this Opinion.

¶ 2 Byrums raise the following issues on appeal:

¶ 3 1. Did the District Court err when it ruled Respondents did not breach the Settlement Agreement?

¶ 4 2. Did the District Court err when it ordered M.R. Civ. P. 11 (Rule 11) sanctions against Byrums?

¶ 5 3. Did the District Court err when it allowed Robert Clark to testify concerning issues outside the pretrial order?

¶ 6 We restate the following issues on cross-appeal:

¶ 7 4. Did the District Court err in dismissing Respondents' counterclaims?

¶ 8 5. Did the District Court err in failing to award attorney's fees and costs to Respondents under § 70-17-112(5), MCA?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 9 The parties in this case each own property along or near the Jefferson River in Madison County, Montana. Byrums' property contains an irrigation ditch known as the Old Dutch Ditch (Ditch). The Ditch diverts water from the Jefferson River to the Respondents' respective properties for the purposes of irrigation and other beneficial uses. Byrums moved onto their property in 1993 and have no rights to the water conveyed by the Ditch. The Ditch has been in use for the benefit of Respondents and the previous owners of Respondents' properties since the 1950's. The existence, uses, and functions of the Ditch have remained largely unchanged since that time.

¶ 10 In 1995—two years after Byrums had moved to their property—Andrens, Clarks, and Browns (Browns were original parties to this lawsuit, but were eventually dismissed) commenced litigation against Byrums over the use and maintenance of the Ditch. The parties settled the 1995 litigation and executed the Settlement Agreement in an attempt to define the rights and duties of the parties with respect to the Ditch. In the Settlement Agreement, Byrums expressly recognized the rights of Respondents to the water rights, ditch rights, and secondary easement rights to the Ditch. Additionally, as the District Court paraphrased in its findings of fact and conclusions of law, the Settlement Agreement obligated Respondents to:

a. Rebuild the dike/levee structure and install two new steel culvert pipes with "adequate closing headgates";

b. Level the top of the dike/levee to allow vehicle access;

c. Use "reasonable and prudent caution" in the installation of the culvert pipes;

d. Utilize "reasonable means" to assure that the dike/levee does not leak;

e. Provide Byrums reasonable notice of at least two weeks, when repairs to the [Ditch] and irrigation apparatus are necessary, unless the repairs are an "emergency";

f. Exercise their access, operation, maintenance, and repair rights in accord with their secondary easement rights and in accord with Montana law; and

g. Install a measuring device in the Ditch on Byrums' property.

Moreover, the Settlement Agreement required that "Byrums agree that they shall not interfere with [Respondents'] reasonable use of their water rights, ditch rights, and exercise of their secondary easement rights."

¶ 11 The Settlement Agreement was agreed to and adopted by the parties in 1998. Byrums initiated the present litigation against Respondents in 2002. Byrums alleged in their Complaint that Respondents had breached the terms of the Settlement Agreement, created a nuisance, and trespassed onto their property. Byrums' claim of trespass was dismissed shortly before trial. In response, Respondents counterclaimed against Byrums, alleging breach of the Settlement Agreement, interference with their water rights, primary easements, and secondary easements to the Ditch, nuisance, and violation of § 85-1-111, MCA, which provides that "[t]he right of any person . . . to take and use any water . . . from any stream or streams for the purpose of irrigation or any beneficial or industrial pursuit shall not be abridged."

¶ 12 A trial was held on July 22, 23, and 24, 2003, by the District Court, sitting without a jury. On January 26, 2004, the District Court issued its Findings, Conclusions, and Decree. The court found that Byrums' allegations were without merit and in addition, awarded Rule 11 sanctions against Byrums to Respondents. Furthermore, the District Court found all of Respondents counterclaims "unfounded" and dismissed all counterclaims with prejudice. Byrums appeal and Respondents cross-appeal.

¶ 13 Additional facts will be discussed where relevant.

STANDARD OF REVIEW

¶ 14 We review the findings of a district court sitting without a jury to determine if the court's findings were clearly erroneous. See M.R. Civ. P. 52(a). A district court's findings are clearly erroneous if substantial credible evidence does not support them, if the district court has misapprehended the effect of the evidence or if a review of the record leaves this Court with the definite and firm conviction that a mistake has been committed. Ray v. Nansel, 2002 MT 191, ¶ 19, 311 Mont. 135, ¶ 19, 53 P.3d 870, ¶ 19. Additionally, we must view the evidence in the light most favorable to the prevailing party when determining whether substantial credible evidence supports the district court's findings. Ray, ¶ 19. We review a district court's conclusions of law to determine whether those conclusions are correct. In re Estate of Harms, 2006 MT 320, ¶ 12, 335 Mont. 66, ¶ 12, 149 P.3d 557, ¶ 12.

¶ 15 We review a district court's evidentiary rulings for an abuse of discretion. McDermott v. Carie, LLC, 2005 MT 293, ¶ 10, 329 Mont. 295, ¶ 10, 124 P.3d 168, ¶ 10 (citing Busta v. Columbus Hosp. Corp., 276 Mont. 342, 353, 916 P.2d 122, 128 (1996)). Absent a showing of such abuse we will not overturn a district court's ruling on the admissibility of evidence. McDermott, ¶ 10 (citing Christofferson v. City of Great Falls, 2003 MT 189, ¶ 8, 316 Mont. 469, ¶ 8, 74 P.3d 1021, ¶ 8). A district court abuses its discretion if its acts "arbitrarily without employment of conscientious judgment or exceed[s] the bounds of reason resulting in substantial injustice." McDermott, ¶ 10 (citing VonLutzow v. Leppek, 2003 MT 214, ¶ 14, 317 Mont. 109, ¶ 14, 75 P.3d 782, ¶ 14).

¶ 16 With regard to the sanctions issue, Rule 11 provides, in pertinent part that:

The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

. . .

If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney's fee.

¶ 17 Our standard of review with respect to the imposition of Rule 11 sanctions has been consistently stated as follows: "a district court's findings of fact will be overturned if clearly erroneous, and a court's legal conclusion that the facts constitute a violation of Rule 11 will be reversed if the determination constitutes an abuse of discretion." Brandt v. Sande, 2000 MT 98, ¶ 35, 299 Mont. 256, ¶ 35, 1 P.3d 929, ¶ 35 (citing D'Agostino v. Swanson, 240 Mont. 435, 446, 784 P.2d 919, 926 (1990) (emphasis added)). Moreover, "[w]e will review the case de novo only if the violation is based on the legal sufficiency of a plea or motion" Brandt, ¶ 35, (citing D'Agostino, 240 Mont. at 446, 784 P.2d at 926).¹ In closely examining the language of this standard of review, however, we conclude that the proper standard of review is not correctly stated in the foregoing decisions. Accordingly, we take this opportunity to clarify and re-state our standard of review in Rule 11 cases.

¶ 18 The foregoing statement of our standard of review was adopted in D'Agostino and was constructed as one which "combines the standards utilized by the federal courts." D'Agostino, 240 Mont. at 446, 784 P.2d at 926.² Unfortunately, in articulating this composite rule it is apparent that the D'Agostino Court conflated our review of the district court's legal conclusion that the facts constitute a violation of the Rule (to which a de novo standard of review applies) with the district court's choice of sanction once the violation is found (a choice which we review for abuse of...