Sw. Mont. Bldg. Indus. Ass'n v. City of Bozeman
| Decision Date | 27 March 2018 |
| Docket Number | DA 17-0401 |
| Citation | 414 P.3d 761,2018 MT 62,391 Mont. 55 |
| Parties | SOUTHWEST MONTANA BUILDING INDUSTRY ASSOCIATION, et al., Plaintiff and Appellant, v. The CITY OF BOZEMAN, Respondent and Appellee. |
| Court | Montana Supreme Court |
For Appellant: Arthur V. Wittich, Montana Law Company; Bozeman, Montana.
For Appellee: J. Robert Planalp, Patrick C. Riley, Planalp, Reida, Roots & Riley, P.C.; Bozeman, Montana.
¶1 Southwest Montana Building Industry Association (SWMBIA) appeals three orders of the Eighteenth Judicial District Court, Gallatin County, which directed SWMBIA to transfer funds from the Impact Fee Payer Class Refund Account (Refund Account) to the City of Bozeman (Bozeman), to submit an accounting of the Refund Account, and for contempt of court. We affirm.
¶2 We restate the issues on appeal as follows:
¶3 This case concerns the final disposition of approximately $227,000 remaining from a class action settlement. These funds currently reside in the Refund Account, which the District Court established and placed in SWMBIA's control to provide refunds to certain individuals and business entities who had paid "impact fees."
¶4 Pursuant to an ordinance adopted in 1996, Bozeman assessed these impact fees against property owners within certain "impact fee districts" for street, water, wastewater, and fire protection. Bozeman collected the fees as a precondition to obtaining permits for construction or connecting to city services.
¶5 In 1998, Bozeman increased some of the impact fees, and a citizens' group submitted an initiative petition to further raise the fees for street, water, and wastewater. Voters approved this initiative and the increases became effective January 15, 1999.
¶6 On February 17, 1999, SWMBIA, a non-profit organization whose members include businesses involved in residential and commercial construction in Bozeman and the surrounding area, sued for declaratory relief. SWMBIA alleged the impact fee ordinances and their amendments were unconstitutional. SWMBIA did not itself pay impact fees, but it represented the interests of its members who had paid, and continued to pay, them. Among other relief, SWMBIA requested class action certification and a refund to the fee payers.
¶7 Over the next few years, SWMBIA amended its complaint and joined additional plaintiffs. The District Court granted SWMBIA's motion to certify the class, defining it as all persons and entities who paid or will pay an impact fee due to the 1996 ordinance or its amendments. The District Court designated SWMBIA as the class representative and SWMBIA's counsel, Arthur V. Wittich (Wittich), as class counsel.
¶8 After several years of litigation, the parties submitted a proposed settlement agreement to the District Court. On April 15, 2005, the District Court entered a Consent Decree and Judgment (Consent Decree) in which it declared Bozeman's impact fee ordinances and their amendments, and all impact fees assessed and collected thereto, were valid and enforceable. Bozeman would pay the court $5,000,000, and these funds would be used to distribute partial refunds to the certified class and to pay Wittich as class counsel. Bozeman would also temporarily reduce its impact fee rates and employ a consultant to advise it on determining appropriate rates for future impact fees.
¶9 After receiving $5,000,000 from Bozeman, the District Court awarded Wittich attorney fees of $500,000. The District Court held all eligible class members who paid impact fees on or after July 1, 2001, would receive a 10% refund out of the settlement funds, "and those paying to the City under general governing powers prior to July 1, 2001 shall receive the balance of the lump sum payment as refunds." The District Court transferred the funds to the Refund Account and ordered Wittich to attempt to complete the refund process within six months.
¶10 By December 13, 2006, Wittich had calculated the refunds due the class members and distributed over $4,250,000 from the Refund Account. He informed the District Court he had been unable to locate or elicit a response from 87 potential claimants and their refunds remained undistributed. Wittich intended to keep the refund process open one more year, and promised the court a status report and closure recommendation by the end of 2007.
¶11 On February 7, 2008, Wittich filed another status report, along with SWMBIA's motion for final distribution and closure. In that report, Wittich reported he had distributed $25,746.67 since the previous status report, but over $211,000 remained in the Refund Account. SWMBIA asked the District Court to close the refund process and allow for a final distribution of the funds to a new account not subject to the refund process. Since the class definition included payers who would be required to pay an impact fee in the future, SWMBIA recommended using the remaining funds to hire consultants to investigate and recommend future impact fee levels.
¶12 Bozeman objected to SWMBIA's recommendations. It contended using the remaining funds to hire consultants would violate the Consent Decree. Bozeman argued it should receive the remaining funds. Bozeman further moved the District Court to order Wittich to provide an exact accounting of the remaining funds.
¶13 On July 27, 2011, SWMBIA withdrew its motion for final distribution and closure. On August 1, 2011, the District Court held a hearing to discuss the status of the case. The District Court asked the parties either to agree on a plan or to submit proposals on how to resolve the case. Wittich doubted the parties could reach agreement and told the court, "I think we need an order." The District Court offered the parties the opportunity to submit proposals for resolving the case. SWMBIA and Bozeman agreed to do so.
¶14 After the hearing, SWMBIA proposed the District Court either follow the procedure SWMBIA had proposed in its withdrawn motion for final distribution and closure, or order the funds distributed to the parties who had already received refunds. SWMBIA proposed any funds unclaimed after additional refunds should escheat to the State. SWMBIA objected to any plan which allowed funds to return to Bozeman.
¶15 Bozeman objected to allowing SWMBIA to use the funds to hire consultants—a move which Bozeman characterized as "fund[ing] future litigation." Bozeman proposed it take possession of the funds, advertise the funds' existence annually for the next three years, and then deliver any remaining funds to the Montana Department of Revenue in accordance with the Uniform Unclaimed Property Act.
¶16 On December 19, 2011, the District Court ordered SWMBIA to turn over all undistributed settlement funds to Bozeman within 14 days of receipt of the Order. It further ordered Bozeman to hold the funds and annually advertise or publish a notice that the unclaimed funds were available to class members who had not received settlement funds. The District Court held if any funds remained unpaid after ten years from April 15, 2005—the date of the Consent Decree—Bozeman could retain those funds.
¶17 However, the District Court inadvertently failed to send this order to the parties. The case fell dormant while the parties awaited a ruling until January 2017, when Bozeman filed a Notice of Issue with the District Court, and the District Court discovered its error and provided the December 19, 2011 Order to the parties.
¶18 Concurrent with its Notice of Issue, Bozeman also moved for an accounting of the Refund Account, after which SWMBIA voluntarily provided a status report and stated $227,077.79 remained in the Refund Account. Bozeman found this statement inadequate, and it moved the District Court to order SWMBIA to provide a detailed accounting of the Refund Account since February 1, 2008—the date of its previous status report. Bozeman advised the District Court SWMBIA had not yet turned over the funds remaining in the Refund Account in accordance with the December 19, 2011 Order.
¶19 On February 17, 2017, Bozeman petitioned the District Court for an Order to Show Cause why SWMBIA had not transferred the Refund Account funds to Bozeman as ordered. On June 13, 2017, the District Court held a hearing on the matter and found SWMBIA in contempt for not transferring the Refund Account funds to Bozeman. At that hearing, SWMBIA provided some bank records regarding the Refund Account which the court admitted under seal. SWMBIA also testified that between February 2008 and January 2017, when it received the District Court's December 19, 2011 Order, SWMBIA spent approximately $100,000 from the Refund Account on "fee consultants." The District Court ordered SWMBIA to provide an accounting of the Refund Account. This appeal followed.
¶20 We review a district court's legal conclusions for correctness. Guill v. Guill , 2014 MT 316, ¶ 9, 377 Mont. 216, 339 P.3d 81 (citation omitted).
¶21 Whether a district court has jurisdiction to rule on a matter is a question of law which we review to determine whether the district court had authority to act. A court exceeds jurisdiction through acts which exceed the defined power of a court, whether that power be defined by constitutional provisions, express statutes, or rules developed by the courts. Green v. Gerber , 2013 MT 35, ¶ 12, 369 Mont. 20, ...
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