Mont. Dep't of Natural Res. & Conservation v. ABBCO Invs., LLC
| Citation | 285 P.3d 532,366 Mont. 120,2012 MT 187 |
| Decision Date | 28 August 2012 |
| Docket Number | No. DA 11–0759.,DA 11–0759. |
| Parties | MONTANA DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION, and Montana Board of Land Commissioners, Plaintiffs and Appellants, v. ABBCO INVESTMENTS, LLC, et al., Defendants and Appellees, Boyd A. Hardy, Shirley J. Hardy, Hard Investments, L.P., Nickie E. Roth, Counter–Claimants and Appellees, v. Montana Department of Natural Resources and Conservation, and Montana Board of Land Commissioners, Counter–Defendants and Appellants. |
| Court | United States State Supreme Court of Montana |
OPINION TEXT STARTS HERE
For Appellants: Tommy H. Butler, Melissa A. Hornbein; Special Assistant Attorneys General, Department of Natural Resources and Conservation, Helena, Montana.
For Appellees: (No Appellees' brief filed.).
¶ 1 Appellants Montana Department of Natural Resources and Montana Board of Land Commissioners (collectively, “the State”) appeal several portions of the Seventh Judicial District Court's summary judgment order in the State's quiet title action. We reverse and remand.
¶ 2 We address the following issues on appeal:
¶ 3 1. Whether the District Court erred by declaring that islands arising vertically from the bed of the Missouri River after statehood are not held by the State in trust for the financial benefit of the public schools.
¶ 4 2. Whether the District Court erred by refusing to declare a surveyed boundary between the islands and adjacent private lands based on the State's evidence.
¶ 5 3. Whether the District Court erred in requiring the State to pay damages for taxes paid and improvements made on the land under the theory of unjust enrichment.
¶ 6 4. Whether the District Court erred by denying costs to the State.
¶ 7 On July 12, 2006, the State filed an action in the Seventh Judicial District Court to quiet title to three islands in the Missouri River located in Sections 4, 5, and 8, Township 26 North, Range 59 East, MPM, Richland County, Montana. The State attached to its complaint a chronological series of surveys and aerial photographs demonstrating that the islands were formed from sedimentary accretions on the riverbed. The latest aerial photograph, taken in 2005, illustrated that the lands—described as Tracts 1, 2, and 3—were no longer surrounded by water but attached to shore land. The total property at issue was approximately 487 acres. The State averred that, because the islands emerged after statehood, its title to the land was superior to that of all the defendants named in the complaint.
¶ 8 In July 2007, the State filed a request to enter the land, pursuant to M.R. Civ. P. 34, for the purpose of surveying. Nearly a year later, the State filed an amended complaint identifying the precise geographical coordinates of the land it claimed should be declared State-owned land in the quiet title action.
¶ 9 Of the numerous defendants named in the complaint, most did not file an answer and many of the defendants who did respond ultimately settled with the State. Defendants Boyd Hardy, Shirley Hardy, Hardy Investments, L.P., and Nickie Roth, (collectively “Defendants”) filed answers and counterclaimed that they owned portions of the land in fee simple and that the District Court should quiet title in their favor.
¶ 10 On September 11, 2009, the State filed a motion for summary judgment. It asserted that the lands at issue properly were characterized as vertical accretions to a navigable river and, as such, the property belonged to the State and was held in trust for common public schools. Defendants filed a response brief and cross-motion for summary judgment. Defendants did not dispute that the lands constituted accretions to the riverbed and originally belonged to the State; however, they argued they had acquired rightful title to the land by adverse possession.
¶ 11 On May 5, 2011, the District Court granted the State's motion for summary judgment, ruling that the State holds title to the disputed lands and that Defendants could not acquire title by adverse possession against public trust land. The court further held, however, that the riverbeds were not school trust lands. The court based its decision, in part, on this Court's statement in PPL Mont., LLC v. State, 2010 MT 64, 355 Mont. 402, 229 P.3d 421,overruled on other grounds, PPL Mont., LLC v. Montana, –––U.S. ––––, ––––, 132 S.Ct. 1215, 1235, 182 L.Ed.2d 77 (2012), that “the District Court erred in concluding that the riverbeds at issue were school trust lands” because, even if it had authority to do so, the Land Board had not classified them as such. PPL Mont., ¶ 116. The District Court then ruled sua sponte that the State was required, under the doctrine of unjust enrichment, to reimburse Defendants for all property taxes and improvements made on the land. The court concluded its order by directing each party to pay its own costs and fees.
¶ 12 On May 18, 2011, the State filed a motion to alter or amend the court's order pursuant to M.R. Civ. P. 59(g) (2009). The State asserted the court should strike the portion requiring the State to reimburse Defendants for the property taxes and improvements made on the land as that directive was improper. The State also averred it was statutorily entitled to recover its costs for bringing the quiet title action. Defendants opposed the State's motion and the State filed a brief in reply. The court did not rule on the motion and entered judgment on December 1, 2011, consistent with its earlier order. After the State's motion was deemed denied, the parties filed a stipulation, agreeing “that $8,845.00 is the value of taxes, improvements and interest as specified in the Court's May 5, 2011 Summary Judgment Order,” and reserving each party's right to appeal any other issues. The State timely appealed, raising four issues for review. Defendants did not cross-appeal or file a response brief. Because the issue has not been appealed, we do not address or disturb the District Court's judgment in favor of the State on Defendants' claim of adverse possession.
¶ 13 We review summary judgment rulings de novo, applying the same M.R. Civ. P. 56 criteria as the District Court. Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Albert, ¶ 15. A district court's conclusions of law are reviewed for correctness. Roe Family, LLC v. Lincoln County Bd. of Comm'rs, 2008 MT 70, ¶ 12, 342 Mont. 108, 179 P.3d 514.
¶ 14 1. Whether the District Court erred by declaring islands arising vertically from the bed of the Missouri River after statehood are not held by the State in trust for the financial benefit of the public schools.
¶ 15 Article X, Section 11(1) of the Montana Constitution provides:
All lands of the state that have been or may be granted by congress, or acquired by gift or grant or devise from any person or corporation, shall be public lands of the state. They shall be held in trust for the people, to be disposed of as hereafter provided, for the respective purposes for which they have been or may be granted, donated or devised.
Based on this language, we agreed with the district court's determination in PPL Montana that riverbeds were public trust lands of the State. PPL Mont., ¶ 115. We rejected the court's holding “that the riverbeds were school trust lands,” however, because “[e]ven if the Land Board could arguably classify the riverbeds as school trust lands, the simple fact remains that it has not done so.” PPL Mont., ¶ 116.
¶ 16 On the basis of this statement in PPL Montana, the District Court determined that the islands in question were not held in trust for public schools. The court discussed the “equal-footing doctrine” as announced in Pollard's Lessee v. Hagan, 3 How. 212, 44 U.S. 212, 11 L.Ed. 565 (1845), which held that, “upon their admission to the Union, [states] acquire title to the lands underlying the navigable waters within their boundaries.” Oregon ex rel. State Land Bd. v. Corvallis Sand & Gravel Co., 429 U.S. 363, 370, 97 S.Ct. 582, 586–87, 50 L.Ed.2d 550 (1977). The District Court reasoned that because the States succeeded to the riverbeds as sovereigns, rather than as grantees of the federal government, Article X, Section 11(1) of the Montana Constitution was inapplicable. Nevertheless, the District Court held that the land belonged to the State, not in fee simple, but as public trust property based on the doctrine articulated in Illinois Cent. R. Co. v. Illinois, 146 U.S. 387, 13 S.Ct. 110 (1982).
¶ 17 Under the equal footing doctrine, “the State's title to the riverbed vests absolutely as of the time of its admission and is not subject to later defeasance by operation of any doctrine of federal common law.” Oregon ex rel. State Land Bd., 429 U.S. at 370–71, 97 S.Ct. at 587. In contrast, “the public trust doctrine remains a matter of state law.” PPL Mont., LLC v. Montana, ––– U.S. ––––, ––––, 132 S.Ct. 1215, 1235.
¶ 18 The United States Supreme Court has made this distinction clear:
While equal footing cases have noted that the State takes title to the navigable waters and their beds in trust for the public, the contours of that public trust do not depend upon the Constitution. Under accepted principles of federalism, the States retain residual power to determine the scope of the public trust over waters within their borders, while federal law determines riverbed title under the equal-footing doctrine.
PPL Mont., LLC v. Montana, ––– U.S. at ––––, 132 S.Ct. at 1235 (citation omitted).
¶ 19 Under the equal footing doctrine, then, the State takes title as sovereign to the real property underlying the beds of its navigable waters. “After a State enters the Union, title to the land is governed by State law.” Montana v. U.S., 450 U.S. 544, 551, ...
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