City of Missoula v. Mountain Water Co.

2016 MT 183, 378 P.3d 1113, 384 Mont. 193, 2016 Mont. LEXIS 517

• Court: Montana Supreme Court
• Decided: August 2, 2016
• Docket: DA 15-0375
• Status: Published

Opinions

JUSTICE COTTER

delivered the Opinion of the Court.

¶1 Mountain Water Company (Mountain Water) owns the water system that provides potable water to the residents of Missoula. The City of Missoula (the City) filed a complaint in the Fourth Judicial District Court, Missoula County, to condemn the water system. Montana’s eminent domain statutes required the City to prove that public ownership of the water system is “more necessary” than private ownership. After a bench trial regarding the necessity of condemnation, the District Court issued findings of fact, conclusions of law, and a preliminary order of condemnation. Mountain Water, its employees, and its corporate owner, Carlyle Infrastructure Partners, LP (Carlyle), appeal from the preliminary order of condemnation. We affirm.

ISSUES

¶2 We restate the issues on appeal as follows:

¶3 Issue One: Did the District Court deny Defendants procedural due process by denying their motions for a continuance?

¶4 Issue Two: Did the District Court abuse its discretion by declining to admit evidence of valuation during the necessity phase of the proceedings?

¶5 Issue Three: Did the District Court err by refusing to dismiss Carlyle as a party to this case?

¶6 Issue Four: Did the District Court err in concluding that collateral estoppel does not bar the City from initiating this condemnation action?

¶7 Issue Five: Did the District Court err in concluding that a municipality may condemn a water system even if the owner of the water system does not have a franchise agreement or a contract to provide the municipality with water?

¶8 Issue Six: Did the District Court err in concluding that the effect of condemnation on the Mountain Water Employees is a factor to be considered in determining whether the acquisition is “more necessary,” but is not a dispositive factor?

¶9 Issue Seven: Were the District Court’s findings regarding the effects of condemnation on the Mountain Water Employees clearly erroneous?

¶10 Issue Eight: Did the District Court err in finding that public ownership of the water system is more necessary than private ownership?

FACTUAL AND PROCEDURAL BACKGROUND

¶11 The City of Missoula is a municipal corporation. Its residents obtain potable water through a water system fed by an underground aquifer. Missoula is the only one of Montana’s 129 municipalities that does not own its own water system; its water system is owned and operated by Mountain Water. Mountain Water is a corporation owned by Park Water Company, whose only equities are Mountain Water and two other water utilities in California. Park Water Company is the sole equity of Western Water Holdings. Western Water Holdings is a holding company; its controlling member is Carlyle, a global investment partnership. Carlyle acquired Mountain Water by acquiring Western Water Holdings’ stock in 2011.

¶12 The City desired to own the water system that serves its residents because City officials believe a community’s water system is a public asset best owned and operated by the public. In January 2014, the City offered to purchase Mountain Water from Carlyle for $50 million. Carlyle rejected the offer. The City then filed an amended complaint in the Fourth Judicial District Court, Missoula County, on May 5, 2014, in which it sought to condemn the water system, pursuant to Montana’s law of eminent domain. The City intends to put the water system to the same use to which it is currently put by Mountain Water and Carlyle (collectively, the Defendants): providing potable water to Missoula residents. Cognizant of the statutory requirement to proceed with all aspects of a condemnation proceeding “as expeditiously as possible,” § 70-30-206(5), MCA, the District Court set a three-week bench trial for March 18, 2015. The parties proceeded with discovery.

¶13 On May 28, 2014, thirty-eight employees of Mountain Water (Employees) moved to intervene in the action, asserting that the condemnation of Mountain Water would affect their rights, benefits, and interests in employment. The City did not object to the intervention, so long as the Employees’ participation was limited to addressing their employment interests and how those interests affect the analysis of whether public ownership of the water system is more necessary than private ownership. The District Court granted the Employees’ motion to intervene and allowed them to participate in the action “based upon the twelve specific interests asserted in their motion to intervene.” The District Court reserved the right to confine the Employees’ participation in the litigation should they stray from those interests. The Employees participated in the litigation from this point forward.

¶14 Five months after the City commenced its condemnation action, Liberty Utilities Company (Liberty) entered into a merger agreement with Carlyle to purchase Mountain Water. Liberty then sought to intervene in the condemnation action, arguing that because it is under contract to purchase Mountain Water, it has a contractual interest in the property sufficient to justify intervention. The District Court denied Liberty’s motion to intervene, finding that present, vested ownership is necessary for intervention under Rule 24(a) of the Montana Rules of Civil Procedure, and that Liberty’s interests would be adequately pursued by Carlyle. Liberty filed a petition for a writ of supervisory control with this Court, seeking a stay of the proceedings and a right to intervene as a defendant. We denied Liberty’s petition on February 5, 2015. See Liberty Utils. Co. v. Mont. Fourth Judicial Dist. Court, 2015 Mont. LEXIS 284, 378 Mont. 539, 348 P.3d 671. Discovery and trial preparation continued.

¶15 Three weeks before trial, the City produced thousands of documents that were, for the first time, in usable electronic formats. Mountain Water filed a motion for a continuance of the trial to allow the Defendants more time to review the documents and prepare for trial. The District Court denied the motion. Mountain Water then filed a petition for a writ of supervisory control with this Court on March 5, 2015, seeking to compel the District Court to grant the continuance. We denied the petition, but we noted that “we are troubled by what appears to be the City’s obstruction of discovery to gain a tactical advantage.” We denied the petition because Mountain Water “[did] not ma[ke] a compelling case that it cannot be ready for trial,” and we concluded that “the extent, if any, to which [Mountain Water] ultimately is prejudiced by the delay [in document production] is a matter that may be raised on appeal.” See Mountain Water Co. v. Mont. Fourth Judicial Dist. Court, 2015 Mont. LEXIS 647.

¶16 A three-week bench trial commenced on March 18,2015. On June 15, 2015, Judge Townsend issued a 68-page Findings of Fact, Conclusions of Law, and Preliminary Order of Condemnation. On June 23, 2015, Mountain Water, Carlyle, and the Employees appealed the Findings of Fact, Conclusions of Law, and Preliminary Order of Condemnation and all orders and rulings that led up to and resulted in that Order.

¶17 By statute, condemnation proceedings occur in two phases, a necessity phase and a valuation phase. The necessity phase was concluded with the District Court’s Preliminary Order of Condemnation. The results of that phase are before us on appeal. The valuation phase occurs after entry of a preliminary order of condemnation, § 70-30-207(1), MCA, and begins with filing of the condemnee’s claim of just compensation. If the condemnor fails to accept the claim, the District Court appoints three condemnation commissioners to determine the value of the property being condemned. In this case, Mountain Water, Carlyle, and the Employees filed their claims of just compensation on July 15, 2015. The City rejected the claims on July 24, 2015. As a result, the District Court appointed three condemnation commissioners. On November 17,2015, the condemnation commissioners determined the fair market value of the water system was $88.6 million. The parties did not appeal this valuation.¹ Additional facts will be discussed as necessary in the following analysis.

STANDARDS OF REVIEW

¶18 A district court has broad discretion to determine the admissibility of evidence at trial, so we review a district court’s evidentiary rulings for abuse of that discretion. Seltzer v. Morton, 2007 MT 62, ¶ 65, 336 Mont. 225, 154 P.3d 561. We also review for abuse of discretion a district court’s rulings regarding discovery and control of pretrial and trial proceedings. Pallister v. Blue Cross & Blue Shield of Mont., Inc., 2012 MT 198, ¶ 9, 366 Mont. 175, 285 P.3d 562; Stevenson v. Felco Indus., 2009 MT 299, ¶ 32, 352 Mont. 303, 216 P.3d 763. A district court’s ruling on a motion for a continuance is one such discretionary ruling. In re Matter of R.F., 2001 MT 199, ¶ 21, 306 Mont. 270, 32 P.3d 1257. In order to establish an abuse of discretion, “the appellant must demonstrate that the district court acted arbitrarily without conscientious judgment or exceeded the bounds of reason.’’ Seltzer, ¶ 65 (internal quotations omitted). If the appellant demonstrates that the district court abused its discretion, “[w]e must then determine whether the demonstrated abuse of discretion constitutes a reversible error.... [N]o reversible error occurs unless a substantial right of the appellant is [ajffected, nor does reversible error occur unless the evidence in question was of such character as to have affected the outcome of the trial.” Seltzer, ¶ 65 (internal citations omitted).

¶19 We review de novo a district court’s rulings on motions to dismiss and motions for summary judgment. Hein v. Sott, 2015 MT 196, ¶ 7, 380 Mont. 85, 353 P.3d 494.

¶20 We review a district court’s findings of fact to determine if they are clearly erroneous. In re Marriage of Olson, 2008 MT 232, ¶ 20, 344 Mont. 385, 194 P.3d 619. “A finding is clearly erroneous if it is not supported by substantial evidence, the district court misapprehended the effect of the evidence, or our review of the record convinces us the district court made a mistake.” In re Marriage of Olson, ¶ 20. We review a district court’s conclusions of law de novo to determine if they are correct. In re Marriage of Olson, ¶ 20. Mixed questions of law and fact, “including the district court’s application of controlling legal principles to its factual findings,” are reviewed de novo. BNSF Ry. Co. v. Cringle, 2012 MT 143, ¶ 16, 365 Mont. 304, 281 P.3d 203.

¶21 It is well established that in a condemnation action, the question of whether public or private ownership of the property is “more necessary” is a fact-specific, judicial determination. Missoula v. Mountain Water Co., 228 Mont. 404, 410-11, 743 P.2d 590, 594 (1987); Helena v. Rogan, 26 Mont. 452, 476, 68 P. 798, 802 (1902); Butte, Anaconda & Pac. Ry. v. Montana Union Ry., 16 Mont. 504, 538, 41 P. 232, 243 (1895). Section 70-30-111, MCA, includes the “more necessary” finding as one of the “Facts necessary to be found before condemnation,” and we have emphasized before that “[i]n an action to condemn private property for a public use, the question of necessity is one of fact, to be determined as other questions of fact, in view of all the evidence in the case.” State ex rel. Livingston v. District Court, 90 Mont. 191, 196, 300 P. 916, 918 (1931). Thus, we will not disturb a district court’s finding that a public use is “more necessary” than a private use unless the finding is not supported by substantial credible evidence, the trial court has misapprehended the effect of the evidence, or a review of the record “leaves this Court with the definite and firm conviction that a mistake has been committed.” Montana Power Co. v. Burlington N. R.R., 272 Mont. 224, 227, 231-32, 900 P.2d 888, 890, 893 (1995) (“Applying the above-described standard of review, we hold that the District Court’s conclusion, that an easement for the electric power transmission line is necessary, is supported by substantial credible evidence. We further hold that the District Court did not misapprehend the effect of the evidence and that our review of the record does not suggest to this Court that a mistake has been committed.”).

DISCUSSION

¶22 Issue One: Did the District Court deny Defendants procedural due process by denying their motions for a continuance?

¶23 Before trial, Mountain Water twice moved the District Court for a continuance, arguing that the City’s alleged discovery abuses had left it inadequately prepared for trial. The District Court acknowledged that “the timelines in this case are undoubtedly demanding and difficult,” but denied the motions for a continuance, noting that the trial date was set for ten months following the date of service of the amended complaint, which is four months longer than is contemplated by § 70-30-202, MCA, and that the parties consented in the scheduling order to the March trial date. The denial of its motions for a continuance was the impetus for Mountain Water’s petition to this Court for a writ of supervisory control. As explained above, although “we [were] troubled by what appealed] to be the City’s obstruction of discovery to gain a tactical advantage,” we denied the petition because Mountain Water “[did] not ma[ke] a compelling case that it cannot be ready for trial.” Carlyle then moved on the eve of trial to exclude certain untimely disclosed expert testimony and, in the alternative, for a continuance. The District Court orally denied that motion on the second day of trial. The Defendants argue on appeal that the denial of their motions for a continuance deprived them of due process. In this connection, they argue that the City delayed production of thousands of pages of documents in useable format until three weeks prior to trial.

¶24 Article II, § 17 of the Montana Constitution provides that “[n]o person shall be deprived of life, liberty, or property without due process of law.” The F ourteenth Amendment to the U.S. Constitution provides a similar guarantee. Due process has both substantive and procedural components. Montanans v. State, 2006 MT 277, ¶ 29, 334 Mont. 237, 146 P.3d 759. Here, the Defendants have alleged a procedural due process violation.

¶25 Although “the phrase ‘due process’ cannot be precisely definedf,...] the phrase expresses the requirements of fundamental fairness.” In re A.R., 2004 MT 22, ¶ 11, 319 Mont. 340, 83 P.3d 1287 (internal quotations omitted). “[T]he requirements for procedural due process are (1) notice, and (2) opportunity for a hearing appropriate to the nature of the case.” Montanans, ¶ 30. These requirements are “flexible and are adapted by the courts to meet the procedural protections demanded by the specific situation,” taking into account “the factual circumstances of the case, the nature of the interests at stake and the risk of making an erroneous decision.” Montanans, ¶ 30 (internal quotations and citations omitted). Procedural due process “includes, among other things, the ability to discover information relevant to the case against [the Defendants] along with the identity of the witnesses who are expected to testify and the substance of the expected testimony.” Wilson v. Dep’t of Pub. Serv. Regulation, 260 Mont. 167, 172, 858 P.2d 368, 371 (1993).

¶26 The Defendants are not arguing that they lacked notice of or an opportunity to be heard at the condemnation trial. Rather, Defendants argue that the City’s discovery abuses left them inadequately prepared for trial and the District Court’s refusal to grant a continuance “prejudicially impaired the [Defendants’ ability to prepare and present their case.”

¶27 Although the timelines imposed in this case were undoubtedly difficult, Defendants have presented no evidence that would allow this Court to conclude they were deprived of procedural due process. Defendants were allowed to conduct discovery, they knew the identity of the witnesses expected to testify, and they knew the substance of the expected testimony. Wilson, 260 Mont. at 172, 858 P.2d at 371. The tight timeline under which all parties were forced to prepare for trial is a result of the District Court’s discretionary case management rulings, so to the extent the Defendants object to the tight timeline and its alleged prejudicial effects, we review those rulings for abuse of discretion. See e.g. State v. Toulouse, 2005 MT 166, ¶ 16, 327 Mont. 467, 115 P.3d 197 (“Toulouse argues that the District Court violated his due process rights when it denied his motion for a continuance .... A district court... may grant the continuance, in its discretion, if the interests of justice so require. We do not overturn a district court’s ruling on a motion for a continuance absent a showing of prejudice to the moving party.”) (internal citations omitted).

¶28 The Defendants must persuade this Court that the District Court abused its discretion in denying their motions for a continuance, and that they suffered actual prejudice as a result. Fair Play Missoula, Inc. v. City of Missoula, 2002 MT 179, ¶ 34, 311 Mont. 22, 52 P.3d 926. Defendants have not persuaded this Court on either point. Defendants did not prove or even contend that the District Court “acted arbitrarily without conscientious judgment,” nor have they proven that in making its rulings, the District Court “exceeded the bounds of reason.” Seltzer, ¶ 65 (internal quotations omitted). In response to the Defendants’ contentions, the City points to the District Court’s thorough orders denying the motions for a continuance, and notes that the District Court “did not blindly adhere to arbitrary deadlines,” but rather “considered these matters carefully.” Upon review of the District Court’s orders, we agree. Thus, we are not persuaded that the District Court abused its discretion in denying the Defendants’ motions for a continuance.

¶29 Defendants have demonstrated inconvenience and frustration, but not actual prejudice. Defendants cannot point to a single piece of evidence that they were unable to discover, unable to present, or to which they were unable to respond at trial. The PDF documents, emails, and expert reports that are the subject of the Defendants’ accusations that the City abused the discovery process were ultimately produced in useable form in compliance with the rulings of the Special Master. The fact that production was delayed and occurred shortly before trial is not, by itself, sufficient to demonstrate prejudice. As we said in the Order denying Mountain Water’s petition for a writ of supervisory control, “the [Defendants’] frustrations with the City’s document production are understandable,” but the Defendants “ha[ve] not made a compelling case that [they were not] ready for trial.” This pretrial observation was borne out by the fact that Defendants presented a full and well-prepared defense at trial.

¶30 Justice Rice’s Dissent makes much of the allegations that the City abused the discovery process, and concludes that prejudice to the Defendants amounting to a due process violation was the result. But the hardship arising from the tight trial preparation timeline was not uniquely suffered by Defendants. In fact, both parties won and lost discovery disputes before the Special Master, both parties supplemented expert disclosures or produced new documents after the respective deadlines, and both parties had to respond at trial to new information, witnesses, or opinions. Justice Rice’s Dissent characterizes the late production of the City’s 5-year capital expenditure plan and a supplement to an expert report providing a new administrative cost analysis as inherently prejudicial to the Defendants. But at trial Mountain Water was able to thoroughly and meaningfully cross-examine the City’s experts regarding these documents, and we are therefore unable to conclude that the late production was inherently prejudicial. The Defendants have now had ample time to review all of the documents produced in discovery, and still they are unable to identify any specific instance of prejudice. Defendants have not persuaded this Court that the District Court’s discretionary case management rulings prejudiced them so much that the trial was fundamentally unfair. Such a showing is required in order to succeed on a procedural due process claim. In re A.R., ¶ 11. As a result, we conclude that the District Court did not abuse its discretion in denying the Defendants’ motions for a continuance, and because no prejudice resulted from the denials, the District Court did not deny the Defendants procedural due process.

¶31 Issue Two: Did the District Court abuse its discretion by declining to admit evidence of valuation during the necessity phase of the proceedings?

¶32 In their briefs on appeal, Defendants requested a remand and retrial of the necessity phase, in significant part because during the necessity phase they were disallowed from introducing evidence of the value of the water system. They argue that the City’s claims about the financial benefits of public ownership are essential to the District Court’s determination that public ownership is “more necessary” than private ownership, and that by excluding Defendants’ competing evidence about the actual value of the water system (and thus the related cost to taxpayers of acquisition, rate increases, and capital investments), the District Court made the “more necessary” finding without considering relevant, even determinative, evidence.

¶33 On November 17, 2015, after this appeal was filed, the condemnation commissioners determined the fair market value of the water system to be $88.6 million. As we noted above, Defendants did not appeal that valuation. In light of the valuation determination, this Court inquired of defense counsel at oral argument why we should remand for a new trial and introduction of valuation evidence. Counsel responded that they are no longer seeking a new trial; they now seek dismissal of the case. We therefore must determine whether the District Court’s refusal to admit Defendants’ valuation evidence during the necessity trial compels dismissal of the case for lack of sufficient valuation evidence to support the “more necessary” finding. We conclude that this result is not warranted, and that the District Court did not abuse its discretion by declining to admit all of the proposed valuation evidence.

¶34 In order to be admissible at trial, evidence must be relevant, M. R. Evid. 402, meaning it must have a “tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence,” M. R. Evid. 401. By statute, condemnation proceedings occur in two phases, a necessity phase and a valuation phase. Sections 70-30-206, -207, MCA. This bifurcation of condemnation proceedings dictates what evidence is “of consequence” to which proceeding. The District Court understood the sequential nature of condemnation proceedings when it declined to admit valuation evidence during the necessity phase, noting that “[wjhile there is a nexus between acquisition price and rates, the Court at the public necessity hearing is limited by statute to a consideration of whether the condemnor has established public necessity.” The District Court concluded that “if the Court were to undertake determining the fair market value of the Water System’s total assets it would be invading the province of the commissioners and jury as set forth in the condemnation statutes.”

¶35 We agree with the Defendants that to the extent the value of the water system bears upon its acquisition cost, the rates to be charged to consumers, and the cost of capital investments, some valuation evidence is relevant in a necessity proceeding. However, we also agree with the District Court that “[t]he scope of testimony proposed to be introduced by Mountain Water indicated its intention to import valuation questions into the necessity phase to a much greater extent than necessary for the Court to carry out its role of determining public necessity.” It was within the District Court’s discretion to make evidentiary rulings to strike the balance between admitting evidence relevant to the necessity phase and limiting extensive valuation evidence more appropriately addressed in the valuation phase. Given that the District Court did allow limited testimony about valuation and that the legislature clearly intended for valuation to be determined by unbiased fact-finders after the necessity determination is made by the District Court, the District Court did not abuse its discretion in limiting the admission of the valuation evidence offered by the Defendants.

¶36 In any event, the District Court did in fact allow some valuation testimony and exhibits during the necessity trial. Specifically, the District Court allowed the City’s evidence that its condemnation plan assumed the acquisition price of the water system was $77 million. The District Court then allowed Defendants’ testimony from Frank Perdue, a municipal investment advisor, about the effects on the ratepayers of having the water system condemned and owned by the City. Perdue testified that if the City used $75 million in bond proceeds to acquire the water system, there would not be a rate increase, but if the City used $100 million in bond proceeds, the rate payers will see an increase of almost 12 percent. Further, a bond issuance of $125 million would result in a 24 percent rate increase, and a $140 million bond issuance would result in a rate increase of 30 percent. Simply put, the Defendants were allowed to put on evidence that as the cost of acquiring the water system increases, so too does the cost to rate payers.

¶37 This evidence was sufficient to satisfy the Defendants’ request to admit some valuation evidence to counter the City’s contentions that the water system could be acquired for $77 million, and that at such a price, public ownership is “more necessary” than private ownership. Further, it was sufficient to inform the District Court of the consequences to the public should the value of the water system prove to be incrementally higher than the value proposed by the city.

¶38 As noted above, the Defendants now seek not remand for failure to admit valuation evidence, but dismissal of the entire case. In light of our conclusion that the District Court did not abuse its discretion in limiting the admission of the valuation evidence offered by the Defendants, and in light of the valuation subsequently placed on the water system by the commissioners, we conclude that dismissal of the case premised upon the District Court’s limitation of the valuation evidence would be unwarranted.

¶39 Issue Three: Did the District Court err by refusing to dismiss Carlyle as a party to this case?

¶40 Carlyle moved in the District Court to be dismissed as a party to this case on the grounds that it is not the record owner of the physical assets the City was seeking to condemn. Mountain Water was the record owner of the assets being condemned, so according to Carlyle, it was not a proper party in the eminent domain action. The City responded that Carlyle is a proper party because Carlyle is the ultimate owner of Mountain Water and the water system, and at all times Carlyle represented itself as the entity that would make any decision about selling Mountain Water and its assets to the City. The District Court relied on the language of § 70-30-203(l)(b), MCA, and Carlyle’s actions and representations throughout this case to deny Carlyle’s motion. Carlyle then moved for summary judgment on the same grounds. The District Court again denied Carlyle’s motion, noting that “Carlyle has not provided support for its interpretation of § 70-30-203(l)(b) MCA that a condemnation action can only be taken against a record owner.” On appeal, Carlyle argues the District Court erred by refusing to dismiss it as a party to this case. We are not persuaded by Carlyle’s assertions.

¶41 Section 70-30-203, MCA, governs the contents of a complaint in a condemnation action. The statute provides, in relevant part, “(1) The complaint for condemnation must contain: ... (b) the names of all owners, purchasers under contracts for deed, mortgagees, and lienholders of record and any other claimants of record of the property sought to be taken, if known, or a statement that they are unknown, who are the defendants.” Section 70-30-203(l)(b), MCA. The plain language of the statute reveals an intent to include as defendants all parties with an interest in the property being condemned, not just “record owners,” as Carlyle insists. Since Carlyle offers no supporting authority for its interpretation of the statute and we have no controlling case law on point, our analysis of the plain language of the statute could end the inquiry here.

¶42 However, the facts in this case lead us to conclude that Carlyle is a proper party to this action even though it does not hold title to the assets being condemned because it is the ultimate corporate owner of the assets and at all times relevant to this case it exercised control over the assets. The evidence established that the boards of Western Water Holdings, Park Water, and Mountain Water are all controlled by Carlyle. Robert Dove, Carlyle’s managing director, acted at all times on behalf of Mountain Water in addressing the City’s efforts to acquire the water system. Indeed, leading up to the potential sale of the water system, the City negotiated exclusively with Carlyle. The City’s offers to purchase the water system, including the “operating assets” of Mountain Water, were directed to Carlyle. Mr. Dove, on behalf of Carlyle, declined the City’s offers. In his letters to the City, Mr. Dove praised Carlyle’s operation of the water system, commenting that “Carlyle Infrastructure, along with the fine employees of Mountain Water, have more than fulfilled our responsibilities to provide quality water service to [the City].” The record is replete with evidence that Carlyle exercised control over the potential sale of the water system, and took credit for the role it played in providing the City with water. Carlyle cannot have it both ways; it cannot control Mountain Water, its assets, and the potential sale of its assets while claiming that it is not a proper party to this suit because title to the assets is not in its name. We therefore conclude that the District Court did not err by refusing to dismiss Carlyle as a party.

¶43 Issue Four: Did the District Court err in concluding that collateral estoppel does not bar the City from initiating this condemnation action ?

¶44 Mountain Water moved for partial summary judgment on the grounds that the City’s unsuccessful attempt to condemn the water system in the 1980s collaterally estops the City’s current condemnation action. According to Mountain Water, both the question of necessity and the parties to the action are the same now as they were in the 1980s, and the City is therefore attempting to re-litigate issues that were determined in a prior suit. The City responded that much has changed in 30 years, and the issues being litigated now are not identical to the issues that were litigated in Missoula v. Mountain Water Co. (Mountain Water I), 228 Mont. 404, 743 P.2d 590 (1987) and Missoula v. Mountain Water Co. (Mountain Water II), 236 Mont. 442, 771 P.2d 103 (1989).

¶45 The District Court compared the pleadings, evidence, and circumstances in the prior condemnation action with those in this action and concluded that “[w]hile there may be some instances in which issue preclusion would apply despite a 30 year difference between the first and second action, this case is not one of them.” The District Court’s review of the two records indicated that the decisions in the 1980s “considered facts and circumstances as they existed between 1979 through 1987 in order to determine public interest and whether the taking was more necessary than the use of the Water System at the time,” while the City’s 2014 complaint is “based on allegations regarding facts and circumstances that occurred after the 1980s case was concluded and focused primarily on a time frame from 2000 forward.” The District Court denied Mountain Water’s motion for partial summary judgment because “[t]he issues in eminent domain are fact specific and requirl e I findings be made on a case by case basis and with reference to the current public interest and necessity.” We agree with the District Court.

¶46 Collateral estoppel, or issue preclusion, “bars a party from reopening an issue that was litigated and determined in a prior suit.” McDaniel v. State, 2009 MT 159, ¶ 28, 350 Mont. 422, 208 P.3d 817. To determine whether relitigation of an issue is barred, we apply a four-part test. McDaniel, ¶ 28. In this case, only the first element is at issue: “Was the issue decided in the prior adjudication identical to the issue raised in the action in question?” McDaniel, ¶ 28. Regarding the first element, we have said before that “I i Issue preclusion requires more than similarity, however, it requires that the issues be identical.” Planned Parenthood v. State, 2015 MT 31, ¶ 23, 378 Mont. 151, 342 P.3d 684. We quoted with approval the U.S. Supreme Court’s holding that “[issue preclusion] must be confined to situations where the matter raised in the second suit is identical in all respects with that decided in the first proceeding.” Planned Parenthood, ¶ 23 (quoting Comm’r v. Sunnen, 333 U.S. 591, 599-600, 68 S. Ct. 715, 720 (1948)).

¶47 Both the current action and the prior action were brought under Title 70, Chapter 30 of the Montana Code, and both actions required a finding that “the public use for which the property is proposed to be used is a more necessary public use.” Section 70-30-11 l(l)(c), MCA. Thus, the question that was litigated in the 1980s appears to be identical to the question being litigated now. However, the question of which use is more necessary is a question of fact that can only be answered by reference to many circumstances that change over time. Whether public or private use is more necessary depends upon factors like the owner’s profit motives, public opinion, efficiency and quality of services, and administrative costs, none of which are static. For this reason, many courts have historically applied a general rule with regard to claim preclusion² in condemnation actions:

A prior unsuccessful attempt to acquire property for a public purpose should not bar the commencement of a subsequent action to acquire the same land providing the court is satisfied that the subsequent action was brought in good faith and that there has been a change of circumstances such that the action is not merely an attempt to relitigate identical issues based upon identical factors for consideration.

Oakes Mun. Airport Auth. v. Wiese, 265 N.W.2d 697, 701 (N.D. 1978) (citing City of Chicago v. Walker, 96 N.E. 536 (Ill. 1911); Laguna Drainage Dist. v. Charles Martin Co., 89 P. 993 (Cal. 1907); Perkiomen v. Sumneytown Turnpike Road, 25 Pa.Super. 462 (1904); Warlick v. Lowman, 16 S.E. 336 (N.C. 1892); Terry v. Town of Waterbury, 35 Conn.Rep. 526 (1869); Whitcher v. Town of Landaff, 48 N.H.Rep. 153 (1868); Petition of Howard, 8 Foster’s Reports 157 (N.H.Super.Ct. of Judicature 1854)); see also City of Chicago v. Midland Smelting Co., 896 N.E.2d 364 (Ill. App. Ct. 1st Dist. 2008); Charlotte v. Rousso, 346 S.E.2d 693, 694 (N.C. Ct. App. 1986) (“A judgment, even though in an action between the same parties, operates as an estoppel only as to the facts in existence when the judgment was rendered; it does not bar a re-litigation of the same issue when new facts occur that alter the legal rights of the parties in regard to the issue.”).

¶48 In support of this unique treatment of preclusion questions in condemnation proceedings, the North Dakota Supreme Court reasoned:

Although the doctrine of [claim preclusion] applies to condemnation actions, the doctrine is not readily applicable to those cases in which a condemning authority seeks to bring a second condemnation action to acquire a part of the same land for which the courts in a prior condemnation action against the same party determined that the condemning authority had failed to prove a public use or public necessity. Those cases possess a unique character to which the doctrine is not readily applied—in that, as time passes from the entry of the judgment in a condemnation action, changes may occur which would add new and important factors to be considered in a determination of whether a proposed taking in a subsequent action is for a public purpose and whether the particular land sought is necessary for that public purpose. The change in circumstances may present an entirely new case for determination even though the same issues involving public use and public necessity had been determined in a prior condemnation action between the same parties involving the same land.

Oakes Mun. Airport Auth., 265 N.W.2d at 700. The District Court found this reasoning persuasive, and so do we. Thus, although the precise question of which use is more necessary is the same question that was litigated in the 1980s, we will determine if the current action is collaterally estopped by the first action by assessing whether “there has been a change of circumstances such that the action is not merely an attempt to relitigate identical issues based upon identical factors for consideration.” Oakes Mun. Airport Auth., 265 N.W.2d at 701.

¶49 We are satisfied that there has indeed been a change of circumstances sufficient to warrant a new analysis of whether public ownership of the water system is more necessary than private ownership. For example, in Mountain Water I, we said that evidence regarding profit motives and out-of-state ownership was “pertinent to the determination of whether the public interest requires the taking.” Mountain Water I, 228 Mont. at 413, 743 P.2d at 596. During the first condemnation action, Mountain Water was owned by Sam Wheeler. The court at the time considered the profit motive of the family-held business and determined this factor did not weigh in the City’s favor because Mountain Water’s profits were in large part reinvested into the system for improvements. In the present action, the District Court found that the profit motive of the new owner, Carlyle, a billion-dollar investment firm whose stated primary goal is to maximize profits for investors, did weigh in the City’s favor. When compared to the City’s unchanged motivations of public health, safety, and access to water, the corporate owner’s profit motive has changed dramatically since the 1980s.

¶50 The home office expense is another example of the change in circumstances. In Mountain Water I, the City claimed that it could eliminate the home office expense entirely, thereby saving rate payers $350,000 per year. The District Court rejected this purported savings because the home office in California “supports the Missoula operation by providing planning, finances, consultation, engineering and management for which the city would have to find a substitute.” Mountain Water I, 228 Mont. at 419, 743 P.2d at 599. In the 1980s, that factor did not weigh in the City’s favor. Now, the City pays Park Water Company between $2.2 million and $2.5 million per year for home office expenses. In addition to valuable management services, however, much of the money goes to costs that would not be incurred if the City owned the water system. For instance, $1.3 million of that money goes to salaries for California staff, $48,000 to “travel and entertainment,” and $103,000 to a Board of Directors fee. The City’s Central Services Director testified at trial that the administrative expenses paid by Mountain Water exceed every other Montana water system by $2 million, and that Mountain Water’s administrative cost per customer is the highest in the state. The City’s expert testified that under City ownership, the administrative expenses incurred by the rate payers will be significantly reduced. This change in circumstances is another indication that the facts relevant to a “more necessary” finding are not the same now as they were during the prior condemnation action.

¶51 The District Court analyzed seven factors that have changed between the 1980s and the present, including the owner’s profit motive, water rates, home office expenses, Public Service Commission regulation, public opinion, efficiency gains under City ownership, and the City’s tax exempt status. We agree with the District Court that the City’s previous unsuccessful attempt to acquire the water system does not bar its current attempt because we are satisfied that “there has been a change of circumstances such that the action is not merely an attempt to relitigate identical issues based upon identical factors for consideration.” Oakes Mun. Airport Auth., 265 N.W.2d at 701. The District Court did not err in refusing to grant Mountain Water partial summary judgment on the grounds of collateral estoppel.

¶52 Issue Five: Did the District Court err in concluding that a municipality may condemn a water system even if the owner of the water system does not have a franchise agreement or a contract to provide the municipality with water?

¶53 Carlyle moved for summary judgment on the grounds that §§ 7-13-4403 and -4404, MCA, require the existence of a franchise agreement or contract between a water system owner and a municipality before the municipality may exercise its right of eminent domain over the water system. Carlyle contended it was entitled to judgment as a matter of law because no such franchise agreement or contract existed between the City and Carlyle, so the City was statutorily barred from initiating this condemnation action. The City responded that Carlyle misinterpreted the relevant statutes, and our holding in Mountain Water I illustrates the proper interpretation. The District Court denied Carlyle’s motion, finding that

[Carlyle’s] proposed interpretation fails to adhere to a plain reading of the language used by the Legislature. Giving effect to all the words used in the enactment, it is plain that the Legislature intended to define the process to be used whenever a contract or franchise exists rather than to impose a prohibition on the power of a municipality to secure a water supply system by eminent domain to only those instances where there is a contract or franchise.

We agree with the District Court.

¶54 In our interpretation of the governing statutes, we are guided by several well-settled rules of statutory construction. First, the role of a judge “is simply to ascertain and declare what is in terms or in substance contained [in the statute], not to insert what has been omitted or to omit what has been inserted. Where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all.” Section 1-2-101, MCA. Second, “[o]ur function as an appellate court is to ascertain and carry out the Legislature’s intent by looking at the plain meaning of the words in the statute.” In re Marriage of Rudolf, 2007 MT 178, ¶ 41, 338 Mont. 226, 164 P.3d 907. Third, “[sjtatutes are not to be read in isolation, but as a whole.” In re Adoption of K.P.M., 2009 MT 31, ¶ 14, 349 Mont. 170, 201 P.3d 833.

¶55 As a preliminary matter, § 70-30-102, MCA, entitles a municipality to condemn a water system for public use: “Subject to the provisions of this chapter, the right of eminent domain may be exercised for the following public uses: ... (6) water and water supply systems as provided in Title 7, chapter 13, part 44.” Thus, we begin our analysis in Title 7, chapter 13, part 44.

¶56 The statutes at issue here are §§ 7-13-4403 and -4404, MCA. The first statute provides:

Acquisition of private water supply system. (1) It is provided that whenever a franchise has been granted to or a contract made with any person or persons, corporation, or corporations and such person or persons, corporation, or corporations, in pursuance thereof or otherwise, have established or maintained a system of water supply or have valuable water rights or a supply of water desired by the city or town for supplying the city or town with water, the city or town granting such franchise or entering in such contract or desiring such water supply shall, by the passage of an ordinance, give notice to such person or persons, corporation, or corporations that it desires to purchase the plant and franchise and water supply of such person or persons, corporation, or corporations. (2) The city or town shall have the right to so purchase the plant or water supply upon such terms as the parties agree.

Section 7-13-4403, MCA. The relevant portion of the second statute provides:

Use of eminent domain powers to acquire water supply system. (1) If agreement is not reached pursuant to 7-13-4403, then the city or town shall proceed to acquire the plant or water supply under Title 70, chapter 30....

Section 7-13-4404(1), MCA.

¶57 According to Carlyle, the statutes dictate the following analysis. First, Title 7, chapter 13, part 44 permits a municipality to use eminent domain to take a water system only if an agreement is not reached under § 7-13-4403(2), MCA. Section 7-13-4404(1), MCA. Second, § 7-13-4403, MCA, applies only if the municipality and the owner of the water system have a franchise agreement or contract under which the owner supplies the municipality with water. Section 7-13-4403(1), MCA. Accordingly, if a municipality does not have a franchise agreement or contract with the water system’s owner, it may not use eminent domain to take the water system. In other words, Carlyle argues that § 7-13-4404, MCA, does not permit a municipality to utilize the general condemnation procedures in Title 70, chapter 30 if § 7-13-4403(1), MCA, does not apply. Therefore, since it is undisputed in this case that Carlyle and the City do not have a franchise agreement or contract, the City is statutorily barred from condemning the water system.

¶58 Carlyle’s interpretation is contrary to the plain language of the statutes and fails to read the statutes as a whole. Section 7-13-4403, MCA, does not make a franchise or contract a prerequisite to condemnation of a water system; section (1) merely sets out the procedure a municipality must follow if there is in fact a franchise or contract in place, and section (2) provides that the parties may also agree to the municipality’s purchase of the water system. As the District Court noted, “[i]n order to adopt Carlyle’s interpretation, the Court would have to interpret ‘whenever a franchise has been granted [to] or contract [] made’ to mean ‘eminent domain is prohibited unless a franchise has been granted or a contract has been made.’ ” Such a reading is contrary to the plain meaning of the words used by the Legislature and requires the insertion of words not used by the Legislature.

¶59 Furthermore, § 7-13-4404, MCA, provides that a municipality shall proceed with condemnation under Title 70, chapter 30 “[i]f agreement is not reached pursuant to 7-13-4403.” The agreement to which this provision refers is an agreement between the parties reached pursuant to § 7-13-4403(2), MCA. Section 7-13-4404, MCA, does not also require the existence of a franchise or contract referred to in § 7-13-4403(1), MCA. The word “if’ in § 7-13-4404, MCA, provides a simple contingency: if the parties reached an agreement under § 7-13-4403(2), MCA, the agreement controls, but if the parties did not reach an agreement, the municipality may proceed with condemnation under Title 70, chapter 30. Section 7-13-4403(1), MCA, is only relevant, then, “whenever a franchise has been granted [] or a contract made.”

¶60 As the City notes, we followed this statutory procedure in Mountain Water I. At that time, there was also no franchise or contract between the City and the water system’s owner. Nonetheless, we held that

[ujnder Section 7-13-4403, MCA, the City properly exercised its right of offering to purchase the water system. Where, as here, there is no agreement to purchase, Section 7-13-4404, MCA, provides that the City “shall proceed to acquire the plant or water supply under the laws relating to the taking of private property for public use.”

Mountain Water I, 228 Mont. at 411, 743 P.2d at 595. We went on to analyze the facts which must be found under Title 70, chapter 30 before private property may be taken for public use. Carlyle has not provided any reason why we should proceed with the same statutory analysis differently in this case.

¶61 Finally, our interpretation of the subject statutes is borne out by the provisions of § 7-13-4405, MCA, which provides that water rights and property necessary for the provision of an adequate water supply for a municipality “may be acquired by purchase, appropriation, location, condemnation pursuant to Title 70, chapter 30, or in any other legal manner.” This statutory allowance of acquisition of property and rights by any legal means available is patently inconsistent with the cramped interpretation that Carlyle would have us apply to the subject statutes.

¶62 Carlyle’s proffered interpretation of §§ 7-13-4403 and -4404, MCA, is contrary to the plain language of the statutes, requires the insertion of words not used by the Legislature, and fails to consider the relevant statutes in conjunction with one another. Accordingly, the District Court did not err in denying Carlyle’s motion for summary judgment.

¶63 Issue Six: Did the District Court err in concluding that the effect of condemnation on the Mountain Water Employees is a factor to be considered in determining whether the acquisition is “more necessary,” but is not a dispositive factor?

¶64 The Employees contend that if they would suffer harm under City ownership, the District Court must find, as a matter of law, that City ownership of the water system is not more necessary than private ownership. The Employees are incorrect. The effect of condemnation on the Employees is one factor to be considered in the “more necessary” analysis, but, as the District Court noted, it is not a dispositive factor. Moreover, the factor is a factual finding, not a legal conclusion that somehow compels rejection of the City’s action as a matter of law.

¶65 In Mountain Water I, we held “that the effect on Mountain Water employees is one factor to be considered in determining whether the acquisition is necessary, but that factor alone is not dispositive.” 228 Mont. at 413, 743 P.2d at 595. And the question of whether acquisition is necessary is itself a question of fact. Section 70-30-111, MCA. There is simply no support for the Employees’ contention that the effect of condemnation on them is a legal conclusion that should result in a determination that City ownership is not more necessary than private ownership if the Employees suffer harm under City ownership.

¶66 The District Court made nineteen factual findings specific to the effects of condemnation on the Employees, so it certainly considered this factor as part of its “more necessary” analysis. The District Court did not err in concluding that the effect of condemnation on the Employees is just one of several non-dispositive factors that must be considered in the “more necessary” analysis.

¶67 Issue Seven: Were the District Court’s findings regarding the effects of condemnation on the Mountain Water Employees clearly erroneous?

¶68 The Employees argue that the City is not entitled to condemn the water system unless the Employees are made whole, and that the District Court’s findings with respect to the Employees were not supported by substantial credible evidence. The City responds that there is no legal authority requiring the City to make the Employees whole, and that substantial credible evidence did support the District Court’s findings. Furthermore, the City contends that since the effect of condemnation on the Employees was merely one factor to be considered in the “more necessary” analysis, it was the Employees’ burden to show that the alleged negative effects of condemnation on them outweigh the other factors favoring condemnation, but the Employees were silent on this point. The City is correct.

¶69 The Employees contend that “public policy affords the Employees the same protection as the physical assets” being condemned. According to the Employees, because the law protects all employees from wrongful or constructive discharge, §§ 39-2-901 et seq., MCA, the Employees must be made whole by the City if the City successfully condemns the water system. There is simply no legal authority supporting the Employees’ position. It is well settled that the “total compensation in an eminent domain case is made up of two parts: the value of the condemned property and severance damages,” K&R P’ship v. City of Whitefish, 2008 MT 228, ¶ 27, 344 Mont. 336, 189 P.3d 593, and that “[t]he only person entitled to recover damages for condemnation is the owner of the land at the time of the taking,” Riddock v. Helena, 212 Mont. 390, 394, 687 P.2d 1386, 1388 (1984). The Employees do not own the water system, so they are not entitled to be compensated or made whole by the City. However, as we said above, they were entitled to present evidence during the necessity phase of the proceeding that the negative effects of condemnation outweigh any factors favoring condemnation. Mountain Water I, 228 Mont. at 413, 743 P.2d at 595. Although they do not explicitly engage in this balancing analysis, the Employees do identify what they perceive to be the negative effects of condemnation.

¶70 The Employees strenuously object to the City’s condemnation of the water system, and maintain that “[t]he overwhelming evidence, and in fact undisputed evidence, was that the City would not match the wages, benefits and terms of employment” the Employees currently receive. Specifically, the Employees take issue with three of the District Court’s factual findings: (1) that “[w]ith the exception of three executive level positions, the current Mountain Water employees’ salaries are comparable to those in the municipal environment”; (2) that “I e Imployment by the City confers advantages on Employees in terms of job security”; and (3) that “[t]he City’s offer of employment is reasonable and fair to Employees.” Since we review a District Court’s findings of fact for clear error, we will not disturb a finding because one party disagrees with it, but rather because “it is not supported by substantial evidence, the district court misapprehended the effect of the evidence, or our review of the record convinces us the district court made a mistake.” In re Marriage of Olson, ¶ 20.

¶71 The District Court’s first finding, that as employees of the City, the Employees would receive “comparable salaries,” was based on substantial credible evidence. The Mayor of Missoula, John Engen, testified at trial that “[w]e do not want to terminate employees, nor do we want to reduce their salaries or benefits.” The Mayor testified that he compared a list of City employees and their salaries to a list of Mountain Water Employees and their salaries, and that he took that information into consideration when determining what to offer the Mountain Water Employees. The Mayor was then asked, “As you sit here today under oath, a representative of the City, are you prepared to assure the Court that if you acquire the water system, the current employees that serve that water system will be able to be employed by the City at their current levels of income?” The Mayor responded affirmatively, and agreed that the guarantee extends for a minimum of five years. With respect to the top two or three Employees, whose salaries are significantly higher than equivalent employees of the City, the Mayor testified that he was willing to offer those Employees their current salaries for a minimum of one year.

¶72 In response to the Mayor’s testimony, the Employees solicited testimony from Michelle Halley, the Business Administration Manager for Mountain Water. Halley testified that the Employees would suffer harm under City employment because the offered minimum employment terms for top executives (1 year) were not equal to the minimum terms offered to all other employees (5 years) although the former are valuable employees, that the offered wages and benefits are set as of February 9, 2015, and that employee pay increases after acquisition are not guaranteed, but are subject to City approval.

¶73 Although this evidence about what the Employees perceive to be the negative effects of City ownership was in the record at trial, the contention that the City could not match the Employees’ current wages was certainly not undisputed, as the Employees contend. In light of all the evidence and the conflicting opinions presented at trial, we cannot conclude that the District Court’s finding that the City could offer the Employees comparable salaries was clearly erroneous.

¶74 The District Court’s second finding, that the Employees would have more job security under City ownership, is also supported by substantial credible evidence. Mayor Engen testified at trial that the City’s offer to employ the Employees at their current salaries for five years is not a five year limit of employment, but rather a minimum guarantee. Under Mountain Water’s current ownership, the Employees have no employment guarantee. As long as Mountain Water is owned by a large, for-profit enterprise like Carlyle or Liberty, the Employees will have no guarantee that their employer and employment terms this year will be the same next year, since investors in the water utility business tend to “buy and flip” such utilities. Robert Dove, Carlyle’s Managing Director, testified at trial that Carlyle and investors like it try to buy water utilities at a “good price, work to improve the return, and then at some point exit.” Carlyle has done just that; it has entered into a merger agreement with Liberty to sell Mountain Water. The City contends that the identity of the water system’s owner is an important factor when assessing the job security of the water system’s employees.

¶75 The Employees do not share the City’s understanding of “job security.” The Employees believe that the terms of employment offered by Liberty are superior to those offered by the City. With respect to employment guarantees, Liberty offered an eighteen month guarantee of employment in the Merger Agreement with Carlyle, but at trial it offered the Employees a five year guarantee. However, as the District Court noted, there is no guarantee that Liberty will own Mountain Water in eighteen months or in five years. Although we are cognizant of the Employees’ objections to City ownership, we cannot conclude that the District Court was clearly in error when it found, in light of competing understandings of “job security,” that the Employees would have more job security under City ownership.

¶76 The District Court’s overall finding that the City’s offer to the Employees is “fair and reasonable” is also supported by substantial credible evidence, some of which is listed above. The Employees devote much of their brief to listing the ways in which they perceive the City’s offer to be unfair and unreasonable. But their dissatisfaction with aspects of the City’s offer does not render the District Court’s finding mistaken or unsupported. Harrison v. Liberty Northwest Ins. Corp., 2008 MT 102, ¶ 11, 342 Mont. 326, 181 P.3d 590 (“As for the scope of our review, we do not resolve conflicts in the evidence, and we do not consider whether evidence supports findings that are different from those made by the [court]; rather, we confine our review to determining whether substantial credible evidence supports the findings actually made by the [court].”). It is also important to bear in mind that the effect of condemnation on the Employees is simply one factor that must be considered before the District Court determines whether public ownership of the water system is more necessary than private ownership. The District Court did extensively consider the effects of condemnation on the Employees, but their dissatisfaction at the prospect of City ownership was not enough to dissuade the District Court from finding that public ownership of the water system was more necessary than private ownership. We are satisfied that the District Court’s findings regarding the effects of condemnation on the Mountain Water Employees are supported in the record and are not clearly erroneous.

¶77 On a final note, the Employees’ participation in this case was limited by the District Court to twelve articulated employment interests. We therefore decline to address the Employees’ general objections to the City’s condemnation of the water system because those objections have more to do with the effect of condemnation on rate payers than they have to do with employment interests, and because those objections are best made by Carlyle and Mountain Water.

¶78 Issue Eight: Did the District Court err in finding that public ownership of the water system is more necessary than private ownership?

¶79 The Defendants maintain that “the ‘more necessary’ test should be informed by the Montana Constitution’s strong protections for private property owners,” and that many of the findings upon which the District Court based its “more necessary” determination were clearly erroneous. The Defendants ask this Court to dismiss the case on the grounds that the District Court clearly erred in finding that the City’s ownership of the water system is more necessary than the Defendants’ ownership. The City responds that the District Court’s individual factual findings, as well as its overall finding that public ownership is more necessary than private ownership, were based on substantial credible evidence, so this Court should not reverse the District Court for committing clear error. For the reasons set forth below we hold that the District Court’s factual finding that public ownership of the water system is more necessary than private ownership was not clearly erroneous.

A. The law of eminent domain

¶80 “Eminent domain is the right of the state to take private property for public use.” Section 70-30-101, MCA. This power is “constitutionally grounded” and it “derives from the power of sovereignty,” and “the power of the state for the perceived common good of the public as a whole.” Montana Talc Co. v. Cyprus Mines Corp., 229 Mont. 491, 501, 748 P.2d 444, 450 (1987). However, the Montana Constitution also endows all persons with the right to acquire, possess, and protect private property. Mont. Const, art II, § 3. For this reason, the Montana Constitution limits the state’s power of eminent domain such that “Iplrivate property shall not be taken or damaged for public use without just compensation to the full extent of the loss having been first made to or paid into court for the owner.” Mont. Const, art II, § 29. Furthermore, “[t]he due process rights of the party whose property is taken for public use are protected by the statutes providing the procedures for eminent domain.” Montana Talc, 229 Mont. at 501, 748 P.2d at 450. Although our constitution and statutes provide certain protections to private property owners, the Defendants provided no legal authority in support of their contention that the private property right is elevated in the constitution above the right of eminent domain, nor has this Court located any such authority. We observed as much in Mountain Water I when we noted “the absence of a declared policy by the Legislature giving greater or lesser weight to public ownership as compared to private ownership of a water system.” Mountain Water I, 228 Mont. at 413, 743 P.2d at 596. Rather, the constitutional right of eminent domain presumes the existence of private property and provides protections to private property owners in the event of a taking.

¶81 In Butte, Anaconda & Pacific Railway, 16 Mont. at 536, 41 P. at 243, and again in Montana Talc, 229 Mont. at 497, 748 P.2d at 448, we stated that “the state has an inherent political right, pertaining to sovereignty and founded on what has been expressed to be a ‘common necessity and interest,’ to appropriate the property of individuals to great necessities of the whole community where suitable provision is made for compensation.” We cautioned, however, that “vigorous compliance with procedures required for eminent domain is commanded.” Montana Talc, 229 Mont. at 498, 748 P.2d at 448.

¶82 Among those protective statutory procedures is § 70-30-111, MCA, which outlines the facts that must be found by a preponderance of the evidence before condemnation is ordered. Specifically, a District Court must find the following facts before allowing condemnation:

(a) the use to which the property is to be applied is a public use pursuant to 70-30-102; (b) the taking is necessary to the public use; (c) if already being used for a public use, that the public use for which the property is proposed to be used is a more necessary public use; (d) an effort to obtain the property interest sought to be taken was made by submission of a final written offer prior to initiating condemnation proceedings and the final written offer was rejected.

Section 70-30-111(1), MCA. It is finding (c)—that the public use for which the water system is proposed to be used by the City is a more necessary public use than the use to which it is currently put by Mountain Water and Carlyle—that is disputed in this case. As we said above, it is well established that in a condemnation action, the question of whether public or private ownership of the property is “more necessary” is a fact-specific, judicial determination. Section 70-30-111, MCA; Mountain Water I, 228 Mont. at 410-11, 743 P.2d at 594; State ex rel. Livingston, 90 Mont. at 196, 300 P. at 918; Helena, 26 Mont. at 476, 68 P. at 802; Butte, Anaconda & Pac. Ry., 16 Mont. at 538, 41 P. at 243. As a result, we review this factual finding for clear error, and we will not disturb the finding unless it is not supported by substantial credible evidence. Montana Power, 272 Mont. at 227, 231-32, 900 P.2d at 890, 893.

¶83 Before reviewing the District Court’s factual findings against the backdrop of the foregoing discussion, we must briefly address Justice McKinnon’s Dissent. Justice McKinnon maintains that we err in applying the “more necessary” requirement of § 70-30-lll(l)(c), MCA, contending that this subsection does not apply when the proposed appropriation does not contemplate a change in the usage of property already dedicated to a public use. We disagree with her analysis for two reasons. First, the theory upon which Justice McKinnon’s Dissent is premised was not raised by any of the parties to this litigation. To the contrary, all parties agreed that it was appropriate to conduct the “more necessary” analysis in this proceeding, consistent with our holding in Mountain Water I that the court must resolve whether it is necessary for the City to have its own water system, and whether the proposed use by the City is “more necessary” than the present use. Mountain Water I, 228 Mont. at 412, 743 P.2d at 595. We reiterated in Mountain Water II that this analysis must be conducted by the District Court. 236 Mont. at 453, 771 P.2d at 110. As we have frequently stated, this Court generally declines to resolve a case on a theory that was not raised by the parties. F.H. v. C.P.H. (In re D.A.H.), 2005 MT 68, ¶ 7, 326 Mont. 296, 109 P.3d 247 (citing Armstrong v. State, 1999 MT 261, ¶ 4, 296 Mont. 361, 989 P.2d 364).

¶84 Second, we disagree with Justice McKinnon’s analysis on the merits because the key cases cited in her Dissent simply do not stand for the proposition stated. In Montana Power, we said that the “more necessary” determination “affects condemnation proceedings only when we have two public uses that are not compatible uses.” 272 Mont. at 233, 900 P.2d at 894. In addressing “compatible uses,” we quoted with approval Cocanougher v. Zeigler, 112 Mont. 76, 112 P.2d 1058 (1941), to the effect that two uses could be made compatible where “[t]he latter use does not inhibit the prior use.” Montana Power, 272 Mont. at 234, 900 P.2d at 894. We concluded that it was not necessary for the District Court to make a “more necessary” determination in the Montana Power case “because MPC’s use would not destroy nor materially injure BN’s prior use.” Montana Power, 272 Mont. at 234, 900 P.2d at 895.³ Here, of course, because the City’s acquisition of the water system would “inhibit” Mountain Water’s use of its property by wholly depriving it of the use of the water system, the uses are not compatible, thus requiring the “more necessary” analysis to be conducted. This conclusion is plainly borne out by Montana Talc and Cocanougher, cases Justice McKinnon cites in paragraphs 1, 3, 6, and 7 of her Dissent:

The proposed use must be “more necessary” where the effect of granting the succeeding public use condemnation will deprive the first owner of his use altogether. If the first owner will be completely deprived of his public use of appropriated property, such that his use will be defeated or seriously interfered with by the proposed condemnor’s right if granted, the statute requiring a “more necessary” public use comes into play.

Montana Talc, 229 Mont. at 504, 748 P.2d at 452 (citing Cocanougher, 112 Mont. at 83-84, 112 P.2d at 1061). We turn now to the District Court’s factual findings, which we review for clear error.

¶85 Our case law establishes that the term “ ‘[njecessary,’ in the context of eminent domain, does not mean absolute or indispensable, but reasonable, requisite and proper for the accomplishment of the intended objective.” Park County v. Adams, 2004 MT 295, ¶ 17, 323 Mont. 370, 100 P.3d 640. Our case law further establishes that determining whether one use is a more necessary public use than another involves consideration of a wide range of factors, the relevance of which varies depending on the property and uses in question. We have articulated only one firm “rule” regarding the “more necessary” determination: the proposed public use need not be different than the use to which the property is currently put. Butte, Anaconda & Pac. Ry., 16 Mont. at 546, 41 P. at 246-47. Otherwise we have analyzed general factors such as “the public good to be accommodated by the public uses so proposed,” Montana Talc, 229 Mont. at 504, 748 P.2d at 452, and factors specific to condemnation of a water system, including the owner’s profit motive, the consequences of out-of-state ownership, the effect on public savings, rates, and charges, the effect of having the home office in the municipality, the public interest as expressed by city residents, the effect on the water system’s current employees, and “the importance of the City obtaining ownership of the water rights themselves, in order that the City may assure its inhabitants of long range access to water,” Mountain Water I, 228 Mont. at 413-14, 743 P.2d at 595-96.

¶86 The District Court properly analyzed all of these factors before making its factual finding that the City’s proposed use of the water system was more necessary than the use to which the water system was put by the Defendants. With these constraints in mind, we review the District Court’s findings for clear error.

B. The District Court’s factual findings

¶87 The District Court’s ultimate finding that the City carried its burden of proof by a preponderance of the evidence in “establishing that its contemplated use of the Water System as a municipally owned water system is more necessary than the current use as a privately owned for-profit enterprise” was based upon 63 pages of factual findings. Those factual findings and their supporting evidence are summarized below.

¶88 The District Court first considered public opinion, and concluded that the Missoula public supports City ownership of the water system. The District Court heard testimony from three elected officials from Missoula, including Mayor Engen, that there was strong public support for City ownership. The District Court also heard testimony about the favorable results of a public opinion poll commissioned by the City. On cross examination, the Defendants elicited some flaws in the poll’s methodology, but the District Court was persuaded by testimony from Harstad Strategic Research that the poll was conducted according to industry standards. The District Court concluded that the use of a poll, even if it was not methodologically perfect, was a reasonable method of measuring public opinion, and that the poll’s results were credible evidence of public support for City ownership of the water system. Our review of the record satisfies us that the District Court’s finding that the Missoula public supports condemnation was based upon substantial credible evidence.

¶89 Next, the District Court looked at evidence about the condition of the water system and the implications of such a condition under public or private ownership. The City introduced testimony that leakage is an important measure of the quality and condition of a water system, and that the Mountain Water water system leaks at a rate of 50% or more, a rate significantly higher than that of other water systems. Experts for the City also testified that 20% of the water system mains and 75% of the service lines have exceeded their useful life, but Mountain Water invested less than $1 million per year in replacing water distribution mains from 2004 to 2014, and Mountain Water has replaced only half of the service lines that its internal analysis determined was minimally necessary. Mountain Water offered testimony that it makes over $4 million in annual capital investments in the water system, and that one of the main sources of leakage is believed to be customer service lines, which are owned and maintained by the customers and not Mountain Water. Mountain Water’s experts also contended that leakage in the water system is not actually wasteful because the water that leaks out of the system returns to the aquifer. The District Court analyzed this competing evidence and determined that the “leakage rate reflects poor utilization of a valuable resource, failure to conform operations to industry standards, and [...] failed coordination with the City and other stakeholders.” The District Court determined that no matter who owns the water system, significant capital expenditures will be required, but that under municipal ownership, long term maintenance planning and capital expenditures can occur under the management of a stable, long term owner. We are satisfied that this conclusion was based upon substantial credible evidence.

¶90 The District Court then considered evidence regarding the City’s ability to effectively manage the water system if it were condemned. The City pointed to its professional and efficient management of the wastewater system as evidence that it has the requisite experience and expertise to manage a complex water utility that is critical to public health and safety. Mountain Water alleged the City’s management of the wastewater system was deficient in various ways. The District Court concluded that even if it was not without difficulty, the City’s history of owning, operating, and setting rates for the wastewater system supports its contention that it can effectively manage the water system as well. The District Court determined that if both public and private owners are competent to manage the water system, municipal ownership is preferable because it would allow for increased coordination and “efficiencies in public health, safety, and welfare functions performed by the City, including transportation, urban planning, and fire safety.” Our review of the record demonstrates that the District Court’s conclusion about the City’s ability to manage the water system was based upon substantial credible evidence.

¶91 Next, the District Court looked at evidence from all parties about the financial considerations relating to owning and operating the water system, including administrative expenses, profit motive, rate setting, and the cost of acquisition and needed capital improvements. Regarding administrative expenses, we said above that the City pays Park Water Company between $2.2 million and $2.5 million per year for home office expenses, much of which would not be incurred if the City owned the water system. For instance, $1.3 million of that money goes to salaries for California staff, $48,000 to “travel and entertainment,” and $103,000 to a Board of Directors fee. The City’s Central Services Director testified at trial that the administrative expenses paid by Mountain Water exceed every other Montana water system by $2 million, and that Mountain Water’s administrative cost per customer is the highest in the state. The City’s expert testified that under City ownership, the administrative expenses incurred by the rate payers will be significantly reduced because the home office expenses would be eliminated and the remaining necessary administrative functions would be combined with those of other City departments that already have full administrative staffing in place. Mountain Water contended that the administrative services performed by the home office are valuable, but it offered no evidence that such services were unique or required special expertise. The President of Liberty testified that under Liberty’s ownership, Mountain Water would be required to make similar payments for corporate personnel and oversight to a home office in Canada. The District Court concluded that “lulnder municipal ownership, the home office expenses to a parent company would be eliminated” and necessary administrative services could be performed by the City. The District Court found this factor weighed in favor of condemnation.

¶92 The District Court also found the profit motive factor to weigh in favor of condemnation. The City offered testimony, which Mountain Water did not dispute, that Mountain Water will continue to earn a profit as long as it is privately owned. Currently, the return on equity is 9.8%. The City also offered testimony that as a municipality, it would not operate the water system on a for-profit basis. The District Court was persuaded that “lulnder City ownership, the water system would not have to generate profits to meet investor expectations,” but rather would charge customers only the amount necessary to operate and maintain the water system.

¶93 Regarding rate setting, the City offered testimony from Alec Hansen, the former executive director of the Montana League of Cities and Towns, that municipalities all over the state are able to set appropriate rates for their water systems using a system that notifies consumers of proposed rate increases and allows public comment. A Missoula City Council member then testified that the City’s rate setting process would involve public informational meetings, public hearings, debate among the council members, public meetings to address and adopt amendments, and a final vote. Mountain Water then offered testimony from John Guastella, an engineer and utility rate and valuation consultant, that the current oversight of Mountain Water by the Public Service Commission (PSC) serves as a substitute for market competition. According to Mountain Water, PSC regulation is preferable to municipal regulation because the PSC uses trained professionals and an intensive fact investigation process to set rates. The District Court determined that the rate setting process is a factor that weighs in favor of condemnation because the protections offered by the PSC “against the potential for earning unfair profits from a captive market are not necessary under municipal ownership,” and municipal rate setting would be subject to transparency and public participation requirements.

¶94 The final financial consideration addressed by the District Court was the effect on rates due to the cost of acquisition and needed capital improvements. The City offered evidence that with its AA+ credit rating from Standard and Poor’s, its eligibility for tax-exempt, low-interest municipal bonds not available to private owners, and its eligibility for state and federal grants not available to private owners, it can afford to acquire and run the water system in a cost effective manner. Mountain Water countered that the City’s evidence regarding its ability to manage the water system in a cost effective manner is speculative because at the time of the necessity trial, the value of the water system was undetermined. Mountain Water also offered evidence that rates would increase under municipal ownership due to the cost of acquisition. The District Court recognized that the City’s acquisition costs may indeed cause future rate increases, and that under either owner, significant capital expenditures will be required to replace and maintain key infrastructure. However, under private ownership, the cost of needed capital improvements will be increased by a rate of equity (currently 9.8%), whereas no such increase would be seen under municipal ownership. The District Court also looked to Carlyle’s marketing materials for Park Water, which forecast a 13% growth in the rate base compounded annually. The District Court concluded that although the value of the water system was undetermined at this point, and the exact effect on rates due to acquisition costs and capital improvements could not be precisely known, municipal ownership was preferable because financial decisions could be made by locally elected officials who would operate the water system to support public health, safety, and welfare, and not to return a profit.

¶95 After weighing all the evidence and testimony about the financial considerations relating to owning and operating the water system, including administrative expenses, profit motive, rate setting, and the costs of acquisition and needed capital improvements, the District Court found that municipal ownership was more necessary than private ownership. Our review of the record satisfies us that this finding was based upon substantial credible evidence.

¶96 The District Court next considered economic and public policy factors. The City presented testimony from Dr. C. Kees Corrsmit, a water utility economist, that City ownership of the water system would benefit the public in a number of ways. Public ownership allows for long term studies and financial planning, which result in rates that are predictable and steady over time. Public ownership also allows for improved coordination of water services with other municipal services like wastewater services and planning for urban growth. In addition, public ownership allows management of the water system to reflect local values like conservation and environmental stewardship.

¶97 The City also presented testimony from Dr. Thomas Power, a professor of economics who specializes in natural resources. Dr. Power testified that private companies are not well suited to the promotion of public interest goals like urban planning, environmental stewardship, and public health, because they must balance those goals against the profit motive and the need to return value to stockholders. Furthermore, frequent change in corporate ownership makes it difficult to engage in long term planning or budgeting for capital improvements to the water system. Finally, Dr. Power testified that City ownership would increase the potential for cost savings as a result of the City’s ability to integrate management of the water system with management of the wastewater system and other City services like street maintenance, urban planning, fire protection, and environmental conservation.

¶98 Mountain Water responded by presenting testimony from Dr. Arthur Laffer, a current economic consultant and former Chief Economist of the Office of Management and Budget under President Reagan. Dr. Laffer testified that municipal management of a water system is only more necessary when a private owner has failed to maintain the water system, and that given Mountain Water’s exemplary record of service to the Missoula community, there is no compelling reason for public ownership of the water system. The District Court did not find Dr. Laffer’s testimony as persuasive as that of Dr. Corrsmit or Dr. Power because Dr. Laffer did not address the “inextricable link” between management of a water supply and public health, safety, and welfare. The District Court also noted that under Montana law, acquisition of a water supply by a municipality is certainly not limited to only those instances in which the current private owner is failing to provide for the needs of the community. The District Court ultimately found, based upon substantial credible evidence, that economics and public policy weigh in favor of condemnation.

¶99 Next, the District Court looked at evidence regarding public health, safety, and welfare. The District Court began this analysis by reviewing testimony from Carlyle’s managing director, Robert Dove, that Carlyle invested in Mountain Water with the intention of profiting from a subsequent sale. The District Court found this short term profit motive to be “incompatible with the long term planning and investment needed to ensure the reliable delivery of clean water” to Missoula residents. The District Court then considered testimony from various City officials that municipal ownership of the water system would help the City meet its public health, safety, and welfare responsibilities, including wastewater treatment and disposal, transportation, management of storm water run-off, urban planning, fire safety, and environmental protection. Mike Haynes, the City’s Development Services Director, testified that Mountain Water has 50 fewer miles of water mains than the City has of sewer mains, and this lack of coordination of water and sewer services is contrary to best practices for urban development and has resulted in a hodgepodge of private wells. Peter Nielsen, the Missoula Water Quality District supervisor, testified that Mountain Water’s failure to extend the water system to cover certain areas of growth has resulted in areas of high industrial and commercial activity that lack fire hydrants for fire suppression or emergency response. This is detrimental to public health and safety. Jason Diehl, the City’s Fire Chief, also testified that there are gaps in fire hydrant coverage throughout the City because these areas are not adequately served by the water system. Firefighters must transport water in tanker trucks to these areas, making the hydrant gaps a public health and safety concern.

¶100 In response, Mountain Water offered testimony regarding its long history of cooperating with the City. Mountain Water engages in advertising to educate the public about environmental concerns, it provides meter data for wastewater billing, it meets regularly with the fire department to coordinate operations, and it works with the City to coordinate a project list of upcoming main replacements and expansions. The District Court recognized that Mountain Water has shown itself to be a good corporate citizen and has engaged in cooperative efforts with the City. However, the District Court was persuaded by the “distinction between cooperation and coordination.” The District Court found that while Mountain Water has been cooperative with the City, municipal ownership would result in coordination of all public health, safety, and welfare functions, which would be more beneficial to the public. The District Court’s finding in this regard was based upon substantial credible evidence.

¶101 Finally, the District Court considered the effects of condemnation on the Mountain Water Employees. These effects were addressed above and will not be repeated here, except to say that the District Court’s finding that this factor did not weigh against condemnation was supported by substantial credible evidence.

¶102 During oral argument, the Defendants complained that many of the District Court’s broad generalized findings and conclusions touting City ownership of the water system reflected an inherent judicial preference in favor of public as opposed to private ownership. Justice Rice’s Dissent goes so far as to characterize the District Court’s general findings in favor of municipal ownership as a “predispositional perspective” that amounted to an unconstitutional burden shifting. Our view of these findings is not that they established a judicial preference for municipal ownership, but rather that they summarized general differences in the capacities and interests of municipalities compared to those of corporations when it comes to how each would manage the water system from an administrative, operational, and financial perspective. Given the context of this case, the court’s findings with respect to how the City would manage the water system were necessarily premised upon projection. This does not equate to a shift in the burden of proof. Furthermore, our exhaustive review of the record confirms that the court’s detailed factual findings summarized above are supported by substantial credible evidence and are not the product of bias in favor of public ownership. We therefore are satisfied that the District Court’s conclusion that the City carried its burden to prove by a preponderance of the evidence that “its contemplated use of the Water System as a municipally owned water system is more necessary than the current use as a privately owned for-profit enterprise” is not clearly erroneous.

CONCLUSION

¶103 For the foregoing reasons, we affirm the District Court’s June 15, 2015 Findings of Fact, Conclusions of Law, and Preliminary Order of Condemnation.

CHIEF JUSTICE McGRATH, JUSTICES SHEA, BAKER and WHEAT concur.

1 The records pertaining to the valuation phase of this proceeding are not before this Court on appeal. The City requested that pursuant to Rules 201 and 202 of the Montana Rules of Evidence we take judicial notice of the facts and law regarding valuation that became part of the District Court record after it was sent to this Court for purposes of this appeal on December 24, 2015. Defendants objected on relevance grounds and argued that “[j]udicial notice cannot be utilized to present facts for the first time on appeal.” We have not ruled on the City’s motion to take judicial notice, but we note our authority under M. R. Evid. 202(b)(6) to take judicial notice of “[r]ecords of any court of this state.” The District Court records in this case reveal the valuation reached by the condemnation commissioners. Further, the subject of the valuation was addressed by the Court and counsel for the Defendants at oral argument. Although the District Court records regarding the valuation are not part of the record before us on appeal, the valuation determination is relevant to various portions of our Opinion and we therefore take judicial notice of the valuation figure reached by the commissioners.

2 The courts that have addressed this issue have done so in the context of claim preclusion, or res judicata. While the question before us is one of issue preclusion, not claim preclusion, the doctrines are related in that they both “embody a judicial policy that favors a definite end to litigation,” Baltrusch v. Baltrusch, 2006 MT 51, ¶ 15, 331 Mont. 281, 130 P.3d 1267, and therefore we find the claim preclusion analysis done by other courts in condemnation actions to be applicable and persuasive here.

3 In Montana Power, we also referenced this Court’s 1893 opinion in Butte, Anaconda & Pacific Railway, in which this Court stated: “We cannot agree that the statute which authorizes lands to be appropriated for a more necessary public use means a different public use in all cases. If the legislature had intended that construction to be put upon the statute, instead of carefully restricting the right to a more necessary public use, they could easily have said a different public use.” 16 Mont. at 546, 41 P. at 246-47.