Knudsen v. Ereaux

NO. 95-422
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
LEE KNUDSEN, SHIRLEY KNUDSEN,
JAMES KNUDSEN, and JANICE KNUDSEN,
Plaintiffs and Appellants,
CLAUDE E. EREAUX, a/k/a EZZIE EREAUX, N.W. DOBSON,
a/k/a NORRIS W. DOBSON; ESTHER ARLETTA DOBSON,
a/k/a ARLETTA DOBSON; CITY OF MALTA, an Incorporated
Political Subdivision of the State of Montana;
and MAYOR BYRON EREAUX. CITY COUNCIL MEMBERS
KARLIiARMS, WILLIAM CROWDER, DAVE BROADBROOKS,
and DELMAR DEMARAIS, individually and as members
of the City Council of the City of Malta,
Defendants and Respondents.
APPEAL FROM: District Court of the Seventeenth Judicial
District, In and for the County of Phillips,
The Honorable Marc G. Buyske, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Vicki Knudsen, Attorney at Law,
Roundup, Montana
Mark D. Parker, Parker Law Firm,
Billings, Montana
For Respondents:
Jack Jenks, Malta City Attorney, Bosch, Kuhr,
Dugdale, Martin & Kaze, Havre, Montana
Don Cole, Cole & Amestoy, Malta, Montana
Submitted on Briefs: January 11, 1996
Decided: February 8, 1996
Fil.ed: FE8 8 - 19%
M
Justice Charles E. Erdmann delivered the opinion of the Court.
Plaintiffs appeal from an order issued by the Seventeenth
Judicial District Court, Phillips County, dismissing their amended
petition for lack of standing. We affirm.
We restate the issues on appeal as follows:
1. Did the District Court err by failing to notify the
parties that it was treating the motion to dismiss as a motion for
summary judgment?
2. Did the District Court correctly determine that the
plaintiffs did not have standing to challenge a municipal
annexation made pursuant to Title 7, Chapter 2, Part 46, Montana
Code Annotated (1993)?
FACTS
This case has no adjudicated facts. It comes before this
Court from the dismissal of plaintiffs' amended petition for
declaratory judgment and injunctive relief. No hearing was
conducted and the only facts are those contained in the parties'
pleadings and supporting documents.
On April 12, 1994, the City of Malta approved a petition to
annex property pursuant to 5 7-2-4601(3) (b), MCA (1993), which
allows annexation by petition to the local legislative body. On
February 28, 1995, the City approved a plan for extension of
services for the annexed property and on March 7, 1995, the City
filed the resolution annexing the property.
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On April 27, 1995, the plaintiffs filed their petition for
declaratory judgment and injunctive relief alleging the annexation
was invalid, illegal, and in violation of statutory authority. On
May 15, 1995, the City, Mayor Ereaux, and the City Council filed a
motion to dismiss plaintiffs' petition and on May 22, 1995, filed
a supporting brief. On June 15, 1995, defendants Claude Ereaux,
Norris W. Dobson and Esther Dobson filed their response.
On June 27, 1995, the plaintiffs filed a motion to amend their
petition to address the issue of standing which the City had raised
in its motion to dismiss. The District Court granted plaintiffs'
motion to amend and on June 29, 1995, the plaintiffs filed their
amended petition. The District Court reviewed the pleadings,
written arguments, and supporting documentation and considered the
City's motion to dismiss as a motion for summary judgment for
dismissal. On August 30, 1995, the District Court issued its order
granting the City's motion to dismiss the amended petition for lack
of standing. This appeal followed.
ISSUE 1
Did the District Court err by failing to notify the parties
that it was treating the motion to dismiss as a motion for summary
judgment?
Rule 12(b), M.R.Civ.P., allows the district court to convert
a motion to dismiss into a motion for summary judgment if "matters
outside the pleading are presented to and not excluded by the court
. . . . 1r In the present case, the City attached to its motion to
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dismiss made pursuant to Rule 12(b) (61, M.R.Civ.P., an affidavit
from the president of the Phillips County Abstract Company, as well
as a certificate of abstractor indicating the chain of title to the
annexed property. The District Court considered the supporting
documents in making its ruling and without notifying the parties
converted the City's motion to dismiss into a motion for summary
judgment.
The plaintiffs argue that the District Court committed
reversible error by converting the City's motion without providing
notice to the parties. The City counters that even if notice had
been given and a hearing had been conducted, the result would have
been the same and therefore any error committed was harmless error.
Rule 12(b), M.R.Civ.P., states that if a motion to dismiss is
converted into one for summary judgment "all parties shall be given
reasonable opportunity to present all material made pertinent to
such motion by Rule 56." Accordingly, we have held that before a
court can convert a motion to dismiss into a motion for summary
judgment, it must give notice to the parties of its intention to
convert the motion. Hoveland v. Petaja (1992), 252 Mont. 268, 271,
828 P.2d 392, 393 (citing State ex rel. Dept. of Health and
Environmental Sciences v. City of Livingston (1976), 169 Mont. 431,
436, 548 P.2d 155, 157; Gravely v. MacLeod (1978), 175 Mont. 338,
344, 573 P.2d 1166, 1169). Formal notice by the court gives the
party opposing the motion an opportunity to produce additional
facts by affidavit or otherwise which would create a genuine issue
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of material fact to preclude summary judgment under Rule 56,
M.R.Civ.P. Hoveland, 828 P.Zd at 394 (citing First Federal Savings
and Loan v. Anderson (19891, 238 Mont. 296, 299, 777 P.2d 1281,
1283).
We therefore conclude that the District Court erred in not
notifying the parties that it converted the City's motion to
dismiss into a motion for summary judgment. However, based on our
holding on Issue 2 below, we conclude this error was harmless and
does not affect the outcome of the case.
ISSUE 2
Did the District Court correctly determine that the plaintiffs
did not have standing to challenge a municipal annexation made
pursuant to Title 7, Chapter 2, Part 46, Montana Code Annotated
(1993) ?
We must first note that even though the District Court in
reaching its decision considered supporting documents beyond the
pleadings, we determine it is not necessary to go beyond the
pleadings in this case. We reach our conclusion based solely on
our review of the pleadings, and therefore, we review the District
Court's order as being based on a motion to dismiss and not on a
motion for summary judgment.
In considering a motion to dismiss made pursuant to Rule
12(b) (6), M.R.Civ.P., a court must view the allegations in a light
most favorable to the plaintiff, admitting and accepting as true
all facts well-pleaded. Farris v. Hutchinson (1992), 254 Mont.
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334, 336, 838 P.2d 374, 375 (citing Devoe v. Missoula County
(1987), 226 Mont. 372, 374, 735 P.2d 1115, 1116; United States
Nat'1 Bank of Red Lodge v. Dept. of Revenue (1977), 175 Mont. 205,
207, 573 P.2d 188, 190. A court should not dismiss a complaint for
failing to state a claim unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his or her claim
which would entitle him or her to relief. Farris, 838 P.2d at 375.
The District Court in this case relied on O'Donnell Fire
Service and Equipment v. City of Billings (1985), 219 Mont. 317,
711 F.2d 822, and concluded that the plaintiffs did not have
standing to challenge the City's annexation resolution. In
O'Donnell, the City of Billings annexed several parcels in the
Billings Heights area, five of which were annexed pursuant to the
same statutory authority used by the City of Malta. O'Donnell
filed a complaint in district court seeking an injunction against
further annexations and a declaratory judgment that the annexations
were illegal and void. In concluding that O'Donnell did not have
standing to challenge the annexations, we relied on the rule set
forth in Sharkey v. City of Butte (1915), 52 Mont. 16, 155 P. 266,
and Nilson Enterprises, Inc. v. City of Great Falls (1980), 190
Mont. 341, 621 P.2d 466. We held that:
[T]he annexations would have to be void ab initio and the
challenger would have to be a nropertv owner who would
suffer tax increases before the annexation could be set
aside in a direct attack. O'Donnell owns no Dropertv in
the annexed area. . . . Given these facts, O'Donnell has
no standing to challenge the annexations done pursuant to
Part 46 . .
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O'Donnell, 711 P.2d at 824 (emphasis added).
In their amended petition, the Knudsens state "[pletitioners
own land in Malta, Phillips County, Montana, adjacent to the land
purported to be annexed . . .'I (emphasis added). Thus, we
determine from the pleadings that the plaintiffs did not own
property in the annexed area and therefore lacked standing to
challenge the City's annexation of the property.
The Knudsens also attempt to collaterally attack the
annexation by challenging the agreement for services made between
the City and the developer. We stated in O'Donnell that:
If it [O'Donnell] lacks standing to directly attack the
annexations, it should not be permitted to pursue a
collateral attack. Montana has never permitted such a
collateral attack and we will not do so in this case.
O'Donnell, 711 P.2d at 825.
O'Donnell is dispositive of all issues presented in this case.
Recognizing this the Knudsens urge us to modify our holding in
O'Donnell to allow a party to challenge an annexation if the
"party's land is directly and uniquely affected by the annexation."
We decline such an invitation to either modify or overrule our
longstanding holding in O'Donnell. We therefore conclude that
since the plaintiffs did not own property within the proposed
annexation they do not have standing to directly or collaterally
attack the annexation resolution. Without standing to state a
claim the plaintiffs can prove no set of facts in support of their
action which would entitle them to relief.
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We affirm the District court ' s order dismissing the
plaintiffs' amended petition for lack of standing. The error
committed by the District Court in failing to notify the parties
that it was converting the City's motion to dismiss to a motion for
summary judgment is harmless error.
as
Justice
We concur:
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