Montana Dep’t of Natural Res. & Conservation v. ABBCO Inv., LLC

Montana Dep’t of Natural Res. & Conservation v. ABBCO Inv., LLC, 285 P.3d 532 (Mont. 2012) (holding (i) Montana held islands that arose vertically from the river bed after statehood in trust for public schools; (ii) Montana provided sufficient evidence of the boundary of the land to have a legal description of the land in the final judgment; (iii) the district court violated Montana’s due process rights it required the State to reimburse defendant’s for all property taxes and improvements on the land; and (iv) the judgment in favor of Montana allowed the state to recover costs).

The state of Montana filed a quite title action in the Seventh Judicial District Court (“district court”) against landowners concerning three islands, roughly 487 acres, located in the Richland County section of the Missouri River that grew out of the riverbed due to sediment accumulation.  Over time, these islands grew attached to the riverbank.  Defendants Boyde Hardy, Shirley Hardy, Hardy Investments, L.P., and Nickie Roth (collectively “Defendants”) filed an answer and counter claim alleging that they owned parts of the land in fee simple.  The district court granted summary judgment for Montana, finding Montana had title to the land based on the equal footing doctrine.  However, the district court found the islands were not school trust lands, and further found that Montana provided insufficient evidence for the district court to establish a legal description of the land in its final judgment.  In addition, the district court required Montana to reimburse Defendants for all paid property taxes and improvements on the land, and required each party to pay its own costs and fees.  Montana appealed several portions of the district court’s judgment to the Montana Supreme Court (“Court”).

First, the Court held Montana owned the islands in trust for public schools.  The Court analyzed the equal footing doctrine, noting that under this doctrine, Montana took the title to the real property underlying the beds of its navigable waters through its sovereignty rather than through a federal grant.  Therefore, upon statehood, Montana law governed this land.  The parties agreed that the islands formed b  y vertical accretion within a navigable riverbed after statehood, and therefore, State law governed the lands.  The Court applied Mont. Code. Ann. § 77-1-102(1)(b), which states Montana holds land beneath its navigable waters in trust for public schools.

Second, the Court held Montana offered sufficient evidence to provide a legal description of each island.  Montana introduced a metes and bounds description of the land in addition to the surveys and aerial photos it provided in its original claim.  The Court held this evidence sufficient to support a detailed description of each island and therefore the district court erred in not entering a legal description of the land in the final judgment.

Third, the Court held the district court violated Montana’s due process right when it required, sua suponte, Montana to reimburse Defendants for taxes paid and improvements made to the land.  The Court noted that the district court violated the due process notice right when it allowed damages for unjust enrichment when the Defendants did not assert a claim for damages under this theory.

Finally, the Court held Montana was entitled to recover costs because it was the prevailing party in the quiet title action. Under Mont. Code. Ann, § 25-10-101(5), costs are allowed to a plaintiff who has a favorable judgment in an action that involves the title of real estate.  Therefore, Montana was entitled to recover the cost of producing the survey of the boundary of the land at issue.

Accordingly, the Montana Supreme Court reversed and remanded the district court’s judgment for further proceedings consistent with its holding.