                                                                                             November 25 2014


                                           DA 14-0022
                                                                                             Case Number: DA 14-0022

              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                          2014 MT 311



CITY OF HELENA, a Municipal Corporation,

              Plaintiff, Counter-Respondent, Appellant,
              and Cross-Appellee,

         v.

SCOTT SVEE and MEGAN SVEE,

              Defendant, Counter-Petitioner, Appellee, and
              Cross-Appellant.



APPEAL FROM:           District Court of the First Judicial District,
                       In and For the County of Lewis and Clark, Cause No. CDV-2011-1106
                       Honorable Kathy Seeley, Presiding Judge


COUNSEL OF RECORD:

                For Appellant:

                       Jeffrey M. Hindoien, Thomas J. Jodoin; Office of the City Attorney;
                       Helena, Montana

                For Appellee:

                       Robert M. Murdo; John M. Semmens; Jackson, Murdo & Grant, P.C.;
                       Helena, Montana



                                                     Submitted on Briefs: September 10, 2014
                                                                Decided: November 25, 2015


Filed:

                       __________________________________________
                                         Clerk
Justice Jim Rice delivered the Opinion of the Court.
¶1     The City of Helena (City) appeals from the Judgment of the First Judicial Court,

Lewis & Clark County, denying its cross-motion for summary judgment and concluding

as a matter of law that it had no legal authority to adopt or enforce Helena City Code

§ 11-42-2. Scott Svee and Megan Svee (Svees) cross-appeal from the Judgment for

dismissing their constitutional claims and denying their claim for attorney’s fees. We

affirm in part, and reverse and remand in part, and restate the issues as follows:

      1. Did the District Court err by determining that Helena City Code § 11-42-2 was
an impermissible building code, and not a zoning ordinance?

      2 Did the District Court err by holding that the Svees were ineligible for an
award of attorney fees under § 27-8-313, MCA?

       3. Did the District Court err by failing to address and dismissing the Svees’s
constitutional arguments?

                 FACTUAL AND PROCEDURAL BACKGROUND

¶2     In January 2009, the Helena City Commission adopted an amendment to its

existing zoning ordinance, § 11-41-1 of the Helena City Code, which created a

wildland-urban interface district (WUI district) encompassing the corporate limits of the

city of Helena and overlaying the City’s other zoning districts. As part thereof, the City

also adopted § 11-41-2, which provides, in pertinent part, as follows:

       A.     Structures located within the wildland-urban interface district may
              not have exposed, wooden roofing materials, whether treated or
              untreated, and must have noncombustible or fire resistant roofing
              materials that are rated Class C or higher in accordance with
              ANSI/UL 790 or ASTM E 108 or any equivalent test.


                                          3
        B.     Existing roofs that undergo renovation, alteration, or repairs that
               involve more than ten percent (10%) of the square footage of the
               affected roof plane must meet the requirements of this chapter. If the
               renovation, alteration, or repair involves more than fifty percent
               (50%) of the square footage of the area of the entire roof, then the
               entire roof must comply with the requirements of this chapter.

Helena, Mont., City Code § 11-41-2.           The challenge in this case is made only to

§ 11-41-2, and the limitations it places on roofing materials, not to the creation of the

WUI district itself.

¶3      The Svees are homeowners whose property is situated within the WUI zoning

district.    After receiving notice that their homeowners insurance policy would be

canceled due to the condition of their roof, the Svees, due to personal financial

constraints, limited repairs to the portion of the roof most in need of improvement,

replacing old wooden shingles on the south plane of the roof with new wooden shingles.

The project began on August 12, 2011.

¶4      On August 15, 2011, a city building official observed the Svees’ repair project and

issued a stop-work notice. By the time the Svees received the notice, they had finished

the roof repair. The City filed criminal complaints against the Svees for re-roofing

without a permit, serving them on September 8, 2011. Then, on November 7, 2011, the

Helena City Commission voted to file a civil action against the Svees in addition to

pursuing criminal charges. On December 6, 2011, the City filed a six-count complaint

against the Svees in the First Judicial District Court, alleging failure to obtain a building

permit; violation of the International Residential Code by failing to obtain a building

permit; violation of the International Residential Code by installing new roof covering
                                          4
over an existing roof covering; violation of the International Residential code by using

excess applications of roof covering; violation of Helena City Code by using illegal

roofing materials; and public nuisance.       The Svees answered the civil complaint in

January 2012 and petitioned the District Court for a declaratory judgment that the

Ordinance was invalid on statutory and constitutional grounds. On February 13, 2012,

the criminal charges were dismissed on the motion of the City.

¶5     Svees moved for summary judgment on their Petition for Declaratory Judgment

and the City countered by moving for summary judgment while simultaneously

withdrawing five of the counts alleged in its complaint, leaving only the count alleging

violation of the Ordinance. The parties agreed that there were no genuine issues of

material fact, and that the validity of § 11-41-2 was a question of law. Based on a

statutory analysis, the District Court denied the City’s motion and granted the Svees’,

reasoning:

       [W]hen the plain language of the statutes are applied in conjunction with
       one another, the Court concludes that the logical conclusion is that § 11-41-
       2 is a building regulation, i.e., an ordinance relating to the design,
       construction, alternation, or repair of buildings, and the materials to be used
       therefor . . . . The statute does not authorize the City to adopt building
       regulations under the guise of a zoning ordinance.

The court did not address the constitutional claims raised by the Svees.

¶6     On October 25, 2013, the District Court entered a final Judgment, declaring “the

Svees’ claims seeking a declaration that the City had no legal authority to adopt or

enforce Helena City Code § 11-41-2 . . . are GRANTED.” On November 5, 2013, the

Svees filed a motion requesting attorney fees, which the District Court denied.
                                          5
Subsequently, the City filed a notice of appeal from the judgment invalidating the

Ordinance, and the Svees filed a cross-appeal challenging the dismissal of their

constitutional arguments and the denial of attorney fees.

                               STANDARD OF REVIEW

¶7     This Court reviews the grant of summary judgment de novo, using the same M. R.

Civ. P. 56 criteria used by a district court. Albert v. City of Billings, 2012 MT 159, ¶ 15,

365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when the moving party

demonstrates an absence of any genuine issue of material act and entitlement to judgment

as a matter of law. Albert, ¶ 15. When no dispute exists as to the material facts, this

Court reviews whether the district court correctly applied the law. Kalispell Educ. Ass’n

v. Bd. of Trustees, 2011 MT 154, ¶ 9, 361 Mont. 115, 255 P.3d 199. A district court’s

ruling on a summary judgment is not a discretionary function that merits deferential

review. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 53, 345 Mont. 12, 192 P.3d 186. This

Court reviews for correctness a district court’s conclusion regarding the existence of legal

authority to award attorney fees. Hughes v. Ahlgren, 2011 MT 189, ¶ 10, 361 Mont. 319,

258 P.3d 439 (citation omitted). If legal authority exists, we review for an abuse of

discretion a district court’s order granting or denying attorney fees. Hughes, ¶ 10.

                                      DISCUSSION

¶8    1. Did the District Court err by determining that Helena City Code § 11-42-2 was
an impermissible building code, and not a zoning ordinance?

¶9     In 1969, Montana adopted a state building code designed to “provide reasonably

uniform standards and requirements for construction and construction materials
                                         6
consistent with accepted standards of design, engineering, and fire prevention practices.”

Section 50-60-201(1), MCA. Section 50-60-202, MCA, designates the Department of

Labor and Industry as “the only state agency that may promulgate building regulations

. . . .” The Legislature has authorized counties, cities, and towns to locally adopt and

enforce only those building codes that have been “adopted by the department.” Sections

50-60-301(2), MCA; 50-60-302(a), MCA. “Building regulations” are defined as “any

law, rule, resolution, regulation, ordinance, or code, general or special . . . relating to the

design, construction, reconstruction, alteration, conversion, repair, inspection, or use of

buildings and installation of equipment in buildings.” Section 50-60-101(3)(a), MCA.

This definition “does not include zoning ordinances.” Section 50-60-101(3)(b), MCA.

¶10    The City interprets the District Court’s order as holding that “the creation of the

WUI zoning district was nothing more than the adoption of ‘a building regulation[] under

the guise of a zoning ordinance,’” (emphasis added), which the City challenges as error.

The City argues that the key issue is “whether the WUI zoning overlay district is a valid

zoning ordinance under Montana law,” and notes that municipalities are authorized,

pursuant to their delegated zoning authority, to regulate the height and size of buildings

and other structures, § 76-2-301, MCA, as well as “the erection, construction,

reconstruction, alteration, repair, or use of buildings.” Section 76-2-302, MCA. Positing

that its WUI district falls squarely within statutorily authorized municipal zoning, the

City then cites the qualification within the definition of “building regulations” in § 50-60-

101(3)(b), MCA, as “not includ[ing] zoning ordinances,” and reasons that this exclusion

                                           7
eliminates any possible classification of the WUI zoning district as a building code

regulation, as well as any conflict with state law.

¶11    The first problem with the City’s overbroad argument, as noted by Svees, is that

Svees did not challenge and the District Court did not invalidate the entire WUI zoning

district as an impermissible building regulation that conflicted with state law. Rather,

they challenged and the District Court invalidated only the portion of the WUI ordinance

that regulated building construction materials, that being § 11-42-2. While the District

Court’s decision may have removed the “teeth” of the WUI district as now enacted, the

district itself remains valid and the City is not precluded from exploring other

mechanisms to secure fire protections in the district. Thus, the City’s assertion that it is

“absurd” to conclude that the WUI district is not a valid exercise of the City’s zoning

authority is falsely premised—the District Court did not so hold, and that issue is not

before us here. The further flaws in the City’s arguments, as discussed below, are that

neither the general municipal zoning authority set forth in §§ 76-2-301, -302, MCA, nor

the distinguishing of zoning ordinances within the definition of “building regulations” in

§ 50-60-101(3)(b), MCA, supplant the Legislature’s clearly demonstrated intention to

occupy this area of the law by enacting a statewide building code and by expressly

prohibiting local governments from adopting regulations that deviate from the state code.

¶12    The City emphasizes the language of § 76-2-302, MCA, which authorizes

municipalities to “regulate and restrict the erection, construction, reconstruction,




                                          8
alteration, repair, or use of buildings, structures or land.”1 As the District Court reasoned,

on first blush this language appears to support the City’s position, but ultimately fails

under further analysis. Section 76-2-302, MCA, clarifies that these powers are granted

“[f]or the purposes of 76-2-301,” which in turn empowers municipalities to regulate the

size, location and use of all structures and land; the size of yards, courts, and other open

spaces; and the occupancy on land and density of population. Section 76-2-301, MCA.

This statute neither mentions nor authorizes municipalities to regulate building materials

that are expressly governed by the state building code.             The exclusion of zoning

ordinances from the definition of “building regulations” in § 50-60-101(3)(b), MCA,

simply distinguishes zoning ordinances that properly regulate structures within the sphere

of authority provided by § 76-2-301, MCA.

¶13    The City next argues that § 11-41-2 is a valid ordinance under this Court’s holding

in Virginia City v. Estate of Olsen, 2009 MT 3, 348 Mont. 279, 201 P.3d 115. There, a

homeowner challenged building requirements imposed by two building permits issued

pursuant to Virginia City’s zoning ordinances, including its Design Review Zoning

Ordinance, by which the City regulated construction to ensure consistency with the City’s

historic character. Virginia City, ¶¶ 3, 9-10. The ordinance regulated such matters as

“setback distances, height, window size and placement, and general structure.” Virginia

City, ¶ 9. We affirmed the District Court’s rejection of the homeowner’s challenge to the


1
  The parties acknowledge that the City of Helena has self-governing powers, Mont. Const. art.
XI, § 6; § 7-1-101, MCA, and neither side contests the applicability of these statutory provisions
in this dispute.
                                           9
requirements of the building permits and entry of summary judgment against the

homeowner. Virginia City, ¶¶ 20, 23, 25. The City reasons that, if ordinances may be

legitimately enacted to “regulate such things as ‘window size and placement’. . . then the

City of Helena can legitimately regulate the use of structures with wooden roofing

materials through the very same municipal zoning authorities for the safety of life and

property.”

¶14    Svees correctly argue that our holding in Virginia City concerned the

homeowner’s failure to adhere to the terms of the building permits, not the propriety of

the zoning ordinances.     We explained that the parties had agreed that the permits

controlled the issues before the Court, that “to the extent that any requirement in the

permits and accompanying documents is at variance with the provisions of Ordinance

503 or other City ordinances, the provisions of the permits control,” Virginia City, ¶ 17,

and thus “Defendants’ counterclaims and arguments relating to the validity and

enforceability of the ordinances have no bearing on whether the City may enforce the

terms of the permits.” Virginia City, ¶ 37. Consequently, we did not address the validity

of the subject ordinances in Virginia City. It is further notable that the actual building

issues resolved in that case involved setback and structural requirements, which are

zoning-related questions not at issue here. Virginia City, ¶¶ 18-24.

¶15    The Svees note that two attorney general opinions are consistent with the District

Court’s holding. In 40 Attorney General Opinion 76, the Attorney General concluded

that the enactment of the state building code in 1969 effectively repealed § 7-33-4203,

                                         10
MCA, which granted local governments the power to regulate the construction of

combustible buildings, opining that “the authority to adopt rules for the construction of

all buildings was vested in the state under [Montana law]. These provisions leave no

room for a local government to prescribe rules dealing with building construction.” 40

Op. Att’y Gen. at 3; see also Opinion No. 81, 37 Op. Att’y Gen. 2 (1977).                     The

Legislature thereafter agreed, subsequently repealing § 7-33-4203, MCA. Sec. 156, Ch.

370, L. 1987.

¶16    Section 7-1-113(1), MCA, provides “[a] local government with self-government

powers is prohibited the exercise of any power in any manner inconsistent with state law

or administrative regulation in areas of law affirmatively subjected by law to state

regulation or control.” Section 11-41-2 of the Helena City Code expressly limits the

materials that may be used in the construction or repair of a building. The Ordinance

thus exceeds the zoning authority granted to municipalities by statute and trespasses into

subject matter that had been made the exclusive domain of the Department of Labor and

Industry by the Legislature. The District Court correctly granted summary judgment in

favor of Svees.2


2
  We noted in City of Missoula v. Armitage, 2014 MT 274, ¶ 18, 376 Mont. 448, __ P.3d__, that
§ 7-1-113(2), MCA, provides that an “exercise of power is inconsistent with state law or
regulation if it establishes standards or requirements which are lower or less stringent than those
imposed by state law or regulation,” and held that a city ordinance imposing a fine upon a DUI
suspect for refusing a breath or blood test was not inconsistent under this provision because it
simply provided an additional regulation and “pose[d] no conflict” to § 61-8-103, MCA.
Armitage, ¶ 22. Here, a conflict is posed between the challenged ordinance, which we have
determined to be a building regulation, and the state building code, and thus the ordinance is
invalid because “[i]n areas affirmatively subjected to state regulation or control, local
governments with self-government powers are expressly prohibited from exercising any power
                                              11
¶17 2. Did the District Court err by concluding the Svees were ineligible for an award
of attorney fees under § 27-8-313, MCA?

¶18    As a general rule, attorney fees are considered to be the burden of the respective

litigants in a case. Montana follows the “American Rule,” which provides that, absent

statutory or contractual authority, attorney fees will not be awarded to the prevailing

party in a lawsuit. Western Tradition P’ship, Inc. v. Att’y Gen. of Mont., 2012 MT 271,

¶ 9, 367 Mont. 112, 291 P.3d 545. We have recognized equitable exceptions to this rule,

but construe them narrowly “lest they swallow the rule.” Trustees of Ind. Univ. v.

Buxbaum, 2003 MT 97, ¶ 19, 315 Mont. 210, 69 P.3d 663; Jacobsen v. Allstate Ins. Co.,

2009 MT 248, ¶ 23, 351 Mont. 464, 215 P.3d 649. We have rejected the expansion of

such equitable exceptions when the effect would “drive a stake into the heart of the

American Rule.” Jacobsen, ¶ 22 (quoting Mountain West Farm Bureau Mut. Ins. Co. v.

Brewer, 2003 MT 98, ¶ 40, 315 Mont. 231, 69 P.3d 652).

¶19    Svees moved for recovery of costs and attorney fees in the District Court on three

bases: 1) The supplemental relief provision of the Uniform Declaratory Judgments Act

(UDJA); 2) § 25-10-711(1), MCA (relating to recovery from a governmental entity when

a suit or defense was frivolous or in bad faith); and 3) the Foy exception to the American

Rule. The District Court denied relief on all three grounds. We conclude Svees are

entitled to attorney fees under the UDJA, and address that single basis for relief.




that is inconsistent with state law or administrative regulation.” Armitage, ¶ 18 (citing § 7-1-
113(1), MCA).
                                           12
¶20   As we explained in United Nat’l Ins. Co. v. St. Paul Fire Marine Ins. Co., 2009

MT 269, ¶ 38, 352 Mont. 105, 214 P.3d 1260, the threshold question for an award of

attorney fees is “whether the equities support an award.” One of these equitable

considerations is whether the parties are similarly situated. In United Nat’l, we reasoned

that because the parties were similarly situated, the equities did not support an award of

attorney fees. United Nat’l, ¶ 39. Similarly, in Mungas v. Great Falls Clinic, LLP, 2009

MT 426, ¶ 46, 354 Mont. 50, 221 P.3d 1230, we held the equities did not support an

award of attorney fees where the subject action involved partnership agreements entered

into by sophisticated and well-informed parties dealing with one another on equal

footing. Likewise, in Ahlgren, ¶ 19 and New Hope Lutheran Ministry v. Faith Lutheran

Church of Great Falls, Inc., 2014 MT 69, ¶ 76, 374 Mont. 229, 328 P.3d 586, we denied

attorney fees because the parties to the cases were situated in similar positions and on

equal footing.




                                        13
¶21    The case here is distinguishable from those noted above in that the parties here are

clearly not similarly situated or on equal footing. The Svees sought to accomplish a

low-cost repair of their roof in response to a notice from their insurance company about

cancellation of their coverage. By so doing, they were named as defendants in both

criminal and civil actions filed by the municipal government, in comparison to whom

they had significantly less resources to litigate the alleged violation of the ordinance. As

such, the equitable threshold consideration is satisfied.

¶22    The next step is to apply the tangible parameters test articulated in Buxbaum.

There, this Court recognized the propriety of an attorney fee award in declaratory

judgment actions. We held that district courts possess authority to award attorney fees

under the supplemental relief provisions of the UDJA as “necessary or proper.”

Buxbaum, ¶ 46.      We stated that while supplemental relief provisions are typically

provided in the context of an insurer/insured relationship, “we need not limit application”

to that arrangement. Buxbaum, ¶ 42. Noting that the “necessary or proper” language is

nebulous, we adopted an analytical framework from the Ohio Court of Appeals to

articulate tangible parameters for trial courts to use when analyzing this issue. Buxbaum,

¶ 43. These parameters contemplated a situation in which the “necessary or proper”

requirement would be satisfied. Buxbaum, ¶ 44. We restated those tangible parameters

in Renville v. Farmers Ins. Exch. as situations in which: 1) an insurance company

possesses what the plaintiffs sought in the declaratory relief action; 2) it is necessary to

seek a declaration showing the plaintiffs are entitled to the relief sought; and 3) the

                                          14
declaratory relief sought was necessary in order to change the status quo. 2004 MT 366,

¶ 27, 324 Mont. 509, 105 P.3d 280.

¶23    The District Court concluded that Svees were not entitled to attorney fees,

reasoning that:

       The first factor of the tangible parameters test does not apply here because
       there is no insurer or self-insurer involved. Further, a declaratory judgment
       action was the procedural course chosen by the Svees, who could have
       opted to litigate their position in the context of the suit filed by the City. A
       declaratory judgment action was not necessary to address the validity of the
       ordinance . . . . Svees’ decision to litigate the validity of the ordinance
       through the UDJA does not entitle them to attorney fees per se. If such
       were the case, attorney fees should arguably be awarded in every
       declaratory judgment action challenging a government action.

¶24    Contrary to the District Court’s reasoning, we stated in Buxbaum, as noted above,

that we did not intend to define the exclusive circumstances that would justify an award,

specifically, to only the insurance context. Buxbaum, ¶ 42. Buxbaum was limited in this

regard, describing but one instance in which attorney fees are “necessary or proper”

under the terms of the UDJA. The court’s conclusion that the first prong of the tangible

parameters could not be met because it was inapplicable was incorrect.

¶25    With respect to the second prong of the test, we conclude that a declaratory action

was necessary. At the instance of notice from their insurer, Svees undertook a small

project to replace damaged wooden shingles on their roof, and limited the scope of their

repairs due to personal financial constraints. As a result, the Svees found themselves

defending legal actions brought by the City, first a criminal action and then a six-count

civil action, resulting in three years of litigation and the incurrence of substantial legal

                                          15
fees by Svees. While the District Court reasoned that the Svees could have opted to

litigate within the context of the legal action initiated by the City, it was both appropriate

and necessary for the Svees to file a declaratory action to get to the root of the City’s

multiple claims—the validity of the ordinance itself, from which the City drew its

authority. A declaratory action solely challenging the ordinance was the quickest and

most direct path to resolution and relief, in light of the City’s multiple enforcement

actions.

¶26    The final prong of the test is satisfied when a declaratory judgment action is

necessary to change the status quo. Here, the city initiated legal proceedings based upon

the “status quo”—the enacted ordinance.        In order to change the status quo, Svees

initiated this action to challenge the validity of the ordinance. In Martin v. SAIF Corp.,

2007 MT 234, ¶ 27, 339 Mont. 167, 167 P.3d 916, we held that attorney fees in favor of

SAIF were inappropriate because the declaratory action at issue failed to change the

status quo with respect to SAIF. There, the Oregon Worker’s Compensation Board

(Board) had determined SAIF (a state-chartered worker’s compensation insurance

company) was entitled to a share of Martin’s third-party tort action award as subrogation

for benefits paid to Martin following an accident. Martin, ¶ 7. Because SAIF was

already entitled to its portion of the tort settlement per the Board’s decision, it was not

necessary for SAIF to seek a declaration from the Montana court in order to change the

status quo, and, thus, the third prong of the tangible parameters test was not met. Martin,

¶ 27. Unlike the situation in Martin, Svees did not initiate this action to enforce the status

                                          16
quo, but rather sought to alter it. The third prong of the tangible parameters test is thus

satisfied.

¶27    Because the equitable considerations merit an award of attorney fees and the Svees

have satisfied the tangible parameters test, we conclude it was an abuse of discretion for

the District Court to deny an award of attorney fees. While § 11-41-2 has been found

invalid, the Svees have technically prevailed but are left only with a legally patched roof

and significant legal bills. Accordingly, we reverse the District Court’s decision to deny

attorney fees and remand for proceedings to determine the appropriate amount of fees to

be awarded.

¶28 3. Did the District Court err when denying and dismissing the Svees’s
constitutional arguments?

¶29    The Svees made several constitutional claims for relief within their motion for

summary judgment, which the District Court dismissed. The District Court stated that it

would be “inappropriate . . . to address or resolve any constitutional challenges” because

the order granting summary judgment in favor of the Svees effectively “resolve[d] the

case in the Svees’ favor on non-constitutional grounds.”

¶30    Svees cross-appeal the denial and dismissal of those claims, but acknowledge in

their briefing that, if the District Court’s order is affirmed, then it is unnecessary for this

Court to address their constitutional claims. This Court has repeatedly recognized that

courts should avoid constitutional issues whenever possible. Merlin Myers Revocable

Trust v. Yellowstone Cnty., 2002 MT 201, ¶ 24, 311 Mont. 194, 53 P.3d 1268.

Accordingly, the District Court’s dismissal of these claims is likewise affirmed.
                                          17
¶31    Affirmed in part, reversed and remanded in part.



                                                 /S/ JIM RICE

We concur:

/S/ PATRICIA COTTER
/S/ LAURIE McKINNON
/S/ JAMES JEREMIAH SHEA



Justice Beth Baker, concurring in part and dissenting in part.

¶32    I concur with the Court’s disposition of Issues One and Three, but dissent from its

decision to award attorney’s fees. Applying the deferential standard of review accorded

the trial court in such matters, and consistent with settled precedent under § 27-8-313,

MCA, I would conclude that the District Court’s denial of fees was not an abuse of its

discretion.

¶33    Before the District Court, the Svees sought fees on three grounds: first, that the

City’s action was frivolous or brought in bad faith, justifying a fee award under § 25-10-

711(1)(b), MCA; second, that they were entitled to fees under the equitable exception to

the American Rule established in Foy v. Anderson, 176 Mont. 507, 580 P.2d 114 (1978);

and third, that fees are “necessary or proper” as supplemental relief under § 27-8-313,

MCA. The District Court analyzed and denied relief on all three grounds. The Svees

appeal only the court’s third ruling. They do not challenge the court’s determination that

the City acted in good faith in its attempt to enforce the ordinance, nor do they take issue

                                         18
with the court’s conclusion that the Svees were not “forced to hire an attorney to defend

an action that is frivolous or utterly without merit,” as required by Foy. DeVoe v. City of

Missoula, 2012 MT 72, ¶ 25, 364 Mont. 375, 274 P.3d 752.

¶34       In denying relief under § 27-8-313, MCA, the District Court noted that the case

began as an enforcement action by the City and that the validity of the ordinance could

have been challenged and resolved in that enforcement action. Thus, the Svees were not

compelled “to litigate the validity of the ordinance through the UDJA” and their decision

to do so “does not entitle them to attorney fees per se.” The District Court reasoned that

“[i]t is axiomatic that the City has an obligation to enforce its ordinances and in this

instance it was seeking to do just that.” The court observed that the City had made efforts

to “secure an expeditious district court resolution of the matter” and that the issue was

“resolved short of trial by briefs and a single oral argument.”

¶35       Our precedent is clear that “equitable considerations” are a “threshold

determination” in a claim that fees are “necessary or proper” in a declaratory judgment

action.     W. Tradition P’ship, ¶ 12.   We identified in Buxbaum additional “tangible

parameters” for a court to consider once that threshold standard is met. Buxbaum, ¶ 43.

Although the Court points out that the award of fees is not limited to the insurance

context (Opinion, ¶ 24), that is only the first component of the tangible parameters

consideration. Renville, ¶ 27. The Court’s analysis falls short in attempting to satisfy the

other two factors—whether a declaratory judgment action was necessary to establish the

plaintiffs’ entitlement to relief and whether declaratory relief was necessary in order to

                                         19
change the status quo. Renville, ¶ 27. The District Court addressed these points directly,

observing that the pursuit of a declaratory judgment was not “necessary” in order for the

Svees to obtain relief, because the question was placed at issue by the City’s enforcement

action.     The District Court’s decision is faithful to the tangible parameters analysis

articulated in Buxbaum: fees are “necessary or proper” only “when no other alternative

was available” for a plaintiff to obtain relief except to seek a declaratory judgment.

Buxbaum, ¶ 44 (quoting McConnell v. Hunt Sports Ent., 725 N.E.2d 1193, 1225 (Ohio

Ct. App. 1999)). In Buxbaum, we quoted the Ohio court’s examples of why declaratory

relief was “necessary” in those cases to obtain relief or change the status quo: “without a

declaration, the insureds in Brandenburg would not have coverage under their insurance

policy and the plaintiffs in Culberson would have a cloud on their title.” Buxbaum, ¶ 44

(quoting McConnell, 725 N.E.2d at 1225).           Here, in contrast, without the Svees’

counter-petition for declaratory judgment, the City’s complaint still would have been

litigated, the ordinance still would have been found invalid, and the Svees still would

have a “legally patched roof” and presumably “significant legal bills” Opinion, ¶ 27.

Although the counter-petition may have served to focus the litigation, a plaintiff’s

“tactical” decision to seek a declaratory judgment, even though it “may have proved

resourceful,” does not “equal necessary or proper as contemplated by the statute.”

Buxbaum, ¶ 45 (quoting McConnell, 725 N.E.2d at 1225).

¶36       As we noted just last year, “only once have we upheld an award of attorney’s fees

in a declaratory relief action under § 27-8-313, MCA.” Horace Mann Ins. Co. v. Hanke,

                                          20
2013 MT 320, ¶ 35, 372 Mont. 350, 312 P.3d 429. That single occasion occurred in

Renville, which we described in Hanke as an “outlier” with “extreme circumstances.”

Hanke, ¶¶ 36, 38.       The District Court found no such extreme situation here,

distinguishing another district court decision where fees were awarded against a county

under “egregious circumstances.” The Court does not find clear error in the District

Court’s specific findings that this case does not involve the “burdensome procedural

history involved in Renville” or that the City’s “simply disjointed case management

decisions” did not amount to lack of good faith. Though it bemoans the fact that “three

years of litigation” were consumed in getting the case resolved, the record shows that less

than a year and a half transpired from the date the City’s complaint was filed to the date

of the District Court’s summary judgment order. The District Court determined that this

case involved a good faith legal dispute over the validity of a municipal ordinance, noting

that, like a state statute, it is “presumed valid unless a court determines otherwise.”

¶37    We criticized the District Court in Martin for “focus[ing] on the fact that SAIF

ultimately prevailed in the litigation rather than thoroughly articulating why an award of

attorney fees to SAIF would be ‘necessary and proper.’” Martin, ¶ 25 (quoting Renville,

¶ 27. The Court’s decision today suffers the same flaw. Its analysis is insufficient to

support a conclusion that the District Court acted arbitrarily, without employment of

conscientious judgment, or exceeded the bounds of reason when it ruled that it was not

“necessary” for the Svees to seek a declaratory judgment in order to obtain relief from the

City’s enforcement of its ordinance. As the District Court rightly observed, if fees were

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awarded here, “attorney fees should arguably be awarded in every declaratory judgment

action challenging a government enactment.” The court recognized that a private citizen

opposing the government’s good faith attempt to enforce its regulations most likely will

incur expense and delay. The court was within its discretion to determine that this case

did not present the rare exception that justified a fee award.       See also Wagner v.

Woodward, 2012 MT 19, ¶ 31, 363 Mont. 403, 270 P.3d 21.

¶38    The decision to award fees in this case eviscerates the requirement that a

declaratory judgment action be “necessary” in order for a party to obtain relief. Further,

it disregards § 25-10-711(1)(b), MCA, which we have acknowledged is a statutory

“guidepost” to award fees against a governmental entity based on considerations of bad

faith or frivolous litigation. W. Tradition P’ship, ¶ 18. More, the Court appears to create

an equitable exception to the American Rule broader than that recognized under Foy,

which reserves an award of fees for “rare instances and only when a party has been

forced to defend against a wholly frivolous or malicious action.” Boehm v. Cokedale,

LLC, 2011 MT 224, ¶ 27, 362 Mont. 65, 261 P.3d 994 (citing Estate of Pruyn v. Axmen

Propane, Inc., 2009 MT 448, ¶ 72, 354 Mont. 208, 223 P.3d 845). Today’s decision

appears to require only that, in the reviewing court’s view, the equities of the case

support awarding fees to a citizen who incurs “significant legal bills” in a successful

challenge to a governmental regulation. Opinion, ¶ 27. This conclusion not only departs

from our established course in restricting the scope of exceptions to the American Rule,




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but charts a new path for obtaining fees against a governmental entity seeking to enforce

its regulations.

¶39    I would affirm entirely the District Court’s judgment.



                                                 /S/ BETH BAKER




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