Norbeck v. Flathead Cnty.

• Decision Date: 09 April 2019
• Docket Number: DA 18-0117
• Citation: 2019 MT 84,438 P.3d 811,395 Mont. 294
• Parties: Amber Olivia NORBECK and Andrew Peter Nels Norbeck, Plaintiffs and Appellants, v. FLATHEAD COUNTY, a political subdivision of the State of Montana; The State of Montana (Department of Environmental Quality); Birk Engineering and Construction, Inc. ; and Bret A. Birk, Defendants and Appellees.
• Court: Montana Supreme Court

395 Mont. 294

438 P.3d 811

2019 MT 84

Amber Olivia NORBECK and Andrew Peter Nels Norbeck, Plaintiffs and Appellants,

v.FLATHEAD COUNTY, a political subdivision of the State of Montana; The State of Montana (Department of Environmental Quality); Birk Engineering and Construction, Inc. ; and Bret A. Birk, Defendants and Appellees.

DA 18-0117

Supreme Court of Montana.

Submitted on Briefs: December 12, 2018

Decided: April 9, 2019

For Appellants: W. Wayne Harper, Harper Law Firm, Butte, Montana

For Appellees: Jeffrey M. Doud, Agency Legal Services Bureau, Helena, Montana (for Department of Environmental Quality), Sarah D. Simkins, Johnson, Berg & Saxby, PLLP, Kalispell, Montana (for Birk Engineering & Construction and Bret A. Birk), Gregory L. Bonilla, MACo Defense Services, Helena, Montana (for Flathead County)

Justice Ingrid Gustafson delivered the Opinion of the Court.

¶1 Appellants Amber Norbeck and Andrew Norbeck (Norbecks) appeal the Eleventh District Court’s orders granting summary judgment to the State of Montana Department of Environmental Quality (DEQ), Birk Engineering and Bret A. Birk (Birks), and Flathead County (Flathead), respectively issued December 18, 2017, December 22, 2017, and March 23, 2018. We affirm.

¶2 We restate the issue on appeal as follows:

Did the District Court err in granting DEQ, Birks, and Flathead’s motions for summary judgment?

FACTUAL AND PROCEDURAL BACKGROUND

¶3 William Koenig (Koenig) was the developer of the Harvest View Subdivision (Subdivision) near Kalispell, MT. In approximately November 2005, Koenig engaged Birks to perform engineering services in connection with development of the Subdivision. Birks performed these services from July 2007 to April 2010. On April 2, 2008, the July 28, 2007 DEQ Certificate of Subdivision Plat Approval (COSA) for the Subdivision was filed in the Clerk’s records. The COSA stated the public water system will be provided to the Subdivision and required completion of such within three years of the approval date. It also indicated the developer/owner of record, Koenig, to be responsible for providing a copy of the COSA to all eventual purchasers. Norbecks admit the COSA allowed purchasers to buy and build without the water system completed or having final DEQ certification. Also on April 2, 2008, as part of the final Subdivision plat, a subdivision improvement agreement (SIA) was filed in the Clerk’s records. The April 2008 SIA identified necessary infrastructure improvements and reflected Koenig’s bond to complete those improvements if he failed to do so. The projected cost of the on-site water supply and pump house improvements was $19,740. On December 19, 2008, another SIA between Koenig and Flathead was filed in the Clerk’s records. The December 2008 SIA indicated the Subdivision water system was completed "9/2005" and again estimated the construction costs for the remaining on-site water supply and pump house improvements that still needed to be completed to be $19,740.

¶4 Norbecks purchased a lot in the Subdivision on December 29, 2008, known as 500 Harvest View Lane (Property). On December 31, 2008, Fidelity National Title Company (Fidelity) issued Norbecks a title insurance policy excepting from coverage, among other things, the April 2008 SIA. Norbecks then built their home on the Property, finishing it in January 2010. During construction Norbecks experienced various issues related to the Property. By no later than November 1, 2009, Norbecks’ contractor, Jesse Lee (Lee), knew there was no water to the home and the Subdivision pump house had not been completed. Upon completion of the home, Lee informed Flathead the home had no water and Koenig had not completed his SIA improvement work. He was advised to contact the County Commissioners’ office and have the SIA placed on the discussion agenda. Neither Lee nor the Norbecks ever followed up on this request. The Norbecks moved into the home before the wells were connected to the Subdivision water system and lived without water for three weeks. When the wells were connected to the Subdivision water system, the Norbecks’ water line broke causing flooding in and around their home. It took a week for Sandry Construction to fix this problem. Norbecks then observed Sandry Construction fixing leaks in the water mains, installing a main water line to the well house, and fixing other leaks throughout the Subdivision. Over the next several months to a year, Norbecks continued to have issues with water, both as to quality and quantity. Until their appliances began to fail, Norbecks "simply lived with the situation[,] as it was bearable and appeared to be resolving itself." On March 11, 2010, two months after the Norbecks moved into their home, they had their water tested. Montana Environmental Lab found the turbidity was "15 ? mud" indicating significant mud to be present in Norbecks’ water. In the summer of 2011, Norbecks experienced additional water issues when they turned on their water for their new sprinkler system and there was no pressure to run it and they had to seek assistance from the developer to obtain water pressure for the system.

¶5 In early February 2013, Norbecks received a Notice of Violation sent by DEQ to Birks indicating DEQ required the project engineer to submit a certification letter for public water and storm water systems and that, within 90 days of installation, a complete set of as-built drawings were required. On August 15, 2013, another Notice of Violation was issued which set forth a list of water system information DEQ required Birks submit. DEQ issued another Notice of Violation on January 22, 2014, which indicated that Koenig had notified DEQ on January 17, 2014, he had retained a different engineer on the project. Koenig and DEQ then entered an Administrative Order on Consent effective June 4, 2014, which outlined various violations by Koenig, stipulated penalties, and corrective actions required. Norbecks have admitted they had constructive notice of the violations found by DEQ involving the Subdivision as they lived without water for 3 weeks and experienced flooding and ongoing water quality issues. In the summer of 2014, Norbecks decided to sell their home and were informed they could not sell their home using conventional financing due to the DEQ violation notices. On November 14, 2014, Norbecks filed suit against William Koenig, Karen Koenig, Flathead, DEQ, Birks, Fidelity, and Glacier Real Estate (Glacier). Norbecks’ Complaint, in relevant part, asserted violations of § 30-14-103, MCA, the Montana Unfair Trade Practices and Consumer Protection Act (MUTPA) (Count 1); negligence (Count 2); negligent misrepresentation (Count 4); continuing nuisance (Count 5); and constructive fraud (Count 6), as well as a claim for punitive damages. With the exception of Count 3, which was directed specifically at Glacier, Norbecks’ claims are pleaded generally and collectively against all Defendants.

¶6 On February 23, 2017, Glacier moved for summary judgment. Norbecks did not respond and on April 4, 2017, the District Court granted Glacier’s summary judgment motion. Thereafter, Glacier moved to certify the order as final, Norbecks again did not respond and the District Court certified its order and entered final judgment against Norbecks on June 27, 2017. Norbecks sought no further relief from the final judgment in favor of Glacier.

¶7 On August 10, 2017, Fidelity filed its motion for summary judgment. Norbecks did not respond and the District Court granted Fidelity’s motion on September 7, 2017. In its order the District Court found, as a matter of law, Norbecks’ claims relating to violations associated with the completion of the Subdivision’s water system, were known to or in the exercise of due diligence were discoverable by Norbecks no later than May 1, 2010, and, as such, Norbecks’ tort claims were barred by applicable statutes of limitation. Following hearing on September 19, 2017, where counsel for the Norbecks represented that he had never received the summary judgment orders regarding either Glacier or Fidelity, the District Court rescinded its order granting Fidelity’s motion for summary judgment and gave Norbecks two weeks to respond to the motion.¹ Norbecks did not file a response and on October 24, 2017, the District Court certified its order granting Fidelity’s motion for summary judgment as final and entered judgment in favor of Fidelity. Notice of Entry of Judgment was issued October 27, 2017. Norbecks did not appeal the Order or Judgment.

¶8 On October 5, 2017, Norbecks filed a motion to dismiss both Koenig defendants, which was granted by the District Court on October 24, 2017.

¶9 On September 15, 2017, Birks sought summary judgment asserting Norbecks’ Complaint was barred by applicable statutes of limitation and barred as Birks did not owe Norbecks a legal duty of care in connection with Birks’ work on the Subdivision. On December 22, 2017, the District Court granted Birks’ motion for summary judgment finding Norbecks’ claims accrued no later than May 1, 2010, and were therefore barred by applicable statutes of limitation. The District Court did not address Birks’ argument regarding duty.

¶10 On September 28, 2017, DEQ filed its motion for summary judgment asserting DEQ could not be held liable for MUTPA, constructive fraud, or punitive damage claims and that the statute of limitations had run on all tort claims. Norbecks responded on October 23, 2017, conceding their MUTPA, constructive fraud, and punitive damage claims against DEQ and asserting the statute of limitations on their tort claims should be tolled. On November 3, 2017, DEQ filed its reply in which it argued the law of the case precluded Norbecks from asserting the statute of limitations began to run on a different date than that already determined by the Court, the discovery rule was not applicable as Norbecks had sufficient notice of the water system issues to trigger their duty to conduct a reasonable...