Skillman v. Dept. of State Lands

Montana Supreme Court

Skillman v. Dept. of State Lands

DecidedJuly 28, 1980

Docket80-047

StatusPublished

This text of Skillman v. Dept. of State Lands (Skillman v. Dept. of State Lands) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Skillman v. Dept. of State Lands, (Mo. 1980).

Pincite

Opinion

No. 80-47

I N THE SUPREME COURT O T E STATE O M N A A F H F OTN

ED SKILLMAN,

P l a i n t i f f and A p p e l l a n t ,

THE DEPARTMENT O STATE LANDS O THE F F STATE O MONTANA; THE BOARD O LAND F F COMISSIONERS a n d JAMES R. FOSTER,

D e f e n d a n t s and R e s p o n d e n t s .

Appeal from: The D i s t r i c t C o u r t o f t h e F i r s t J u d i c i a l D i s t r i c t , I n and f o r t h e County o f L e w i s and C l a r k , The Honorable P e t e r G. Meloy, J u d g e p r e s i d i n g .

Counsel o f Record:

For Appellant:

H a r r i s o n , Loendorf and P o s t o n , H e l e n a , Montana

For Respondents :

David Woodgerd, Department o f S t a t e Lands, H e l e n a , Montana H. A. B o l l i n g e r , Bozeman, Montana

S u b m i t t e d on B r i e f s : J u n e 5 , 1980

Decided : J L 2 8 1980 U Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court.

Respondent Ed S k i l l m a n p e t i t i o n e d t h e D i s t r i c t C o u r t

f o r j u d i c i a l r e v i e w of a d e c i s i o n by t h e S t a t e Board of Land

Commissioners t o renew a l e a s e of s t a t e l a n d t o James R.

Foster. The Board of Land Commissioners had renewed t h e

l e a s e a f t e r f i n d i n g t h a t F o s t e r had a p r e f e r e n c e r i g h t . The

D i s t r i c t C o u r t h e l d t h e Board of Land Commissioners e r r e d i n

renewing t h e lease. The c o u r t remanded t h e c a s e t o t h e

Board w i t h d i r e c t i o n s t o c a n c e l t h e F o s t e r l e a s e and lease

t h e land without a preference r i g h t . The Department of

S t a t e Lands and t h e S t a t e Board of Land Commissioners a p p e a l

t h e d e c i s i o n of t h e D i s t r i c t C o u r t a s s e r t i n g t h e l e a s e t o

F o s t e r s h o u l d be r e i n s t a t e d . S k i l l m a n c r o s s - a p p e a l s con-

t e n d i n g t h e c o u r t s h o u l d have awarded t h e lease t o him

r a t h e r t h a n o r d e r i n g t h e l e a s e reopened f o r b i d s .

The f a c t s i n t h i s c a s e a r e n o t d i s p u t e d by t h e p a r t i e s .

F o s t e r h e l d a S t a t e of Montana s u r f a c e l e a s e t o 6 4 0 acres of

g r a z i n g l a n d i n Park County, Montana. The l e a s e e x p i r e d on

F e b r u a r y 28, 1979. On J a n u a r y 2, 1979, F o s t e r a p p l i e d t o

renew h i s l e a s e on t h e l a n d a t a r a t e of $7.50 p e r AUM

(animal-unit-month). On J a n u a r y 23, 1979, S k i l l m a n a p p l i e d

t o lease t h e l a n d a t a r a t e of $18.75 p e r AUM. F o s t e r was

n o t i f i e d of t h e b i d s u b m i t t e d by S k i l l m a n and informed t h a t

a s c u r r e n t lessee he was e n t i t l e d t o e x e r c i s e a p r e f e r e n c e

r i g h t t o meet t h e b i d . F o s t e r e x e r c i s e d t h e p r e f e r e n c e and

m e t t h e b i d on F e b r u a r y 22, 1979. The l e a s e was renewed t o

him on F e b r u a r y 28, 1979.

F o s t e r a l s o r e q u e s t e d and was g r a n t e d a h e a r i n g t o

d e t e r m i n e whether t h e b i d was i n t h e b e s t i n t e r e s t o f t h e

S t a t e of Montana. S t a t e Land Commissioner Leo B e r r y con-

d u c t e d t h e h e a r i n g on t h e m a t t e r on March 27, 1979. Evi- dence i n t r o d u c e d a t t h e h e a r i n g showed t h a t F o s t e r had

s u b l e a s e d t h e l a n d t o J i m S e r r a z z e n b u t had n o t f i l e d a

s u b l e a s e form w i t h t h e Commissioners. Subsequent t o t h e

h e a r i n g , Commissioner B e r r y recommended t h a t a renewal l e a s e

be i s s u e d t o F o s t e r a t t h e r a t e of $7.50 p e r AUM. The Board

a c c e p t e d t h e recommendation and renewed t h e l e a s e a t t h e

$7.50 r a t e .

On J u l y 2 , 1979, t h e Department of S t a t e Lands c a n c e l e d

F o s t e r ' s l e a s e f o r f a i l u r e t o f i l e a sublease. On c a n c e l -

l a t i o n of t h e lease, i t was e x p l a i n e d t o F o s t e r t h a t h i s

l e a s e would be renewed i f he p a i d a p e n a l t y of 50 p e r c e n t of

t h e a n n u a l r e n t a l of t h e l a n d . F o s t e r p a i d t h e p e n a l t y , and

the lease was reinstated.

The f o l l o w i n g i s s u e i s r a i s e d by t h e Department of

S t a t e Lands f o r review:

Did t h e D i s t r i c t C o u r t err i n d e t e r m i n i n g F o s t e r s h o u l d

n o t be g r a n t e d a p r e f e r e n t i a l r i g h t t o l e a s e t h e l a n d i n

q u e s t i o n under t h e a u t h o r i t y of J e r k e v . S t a t e Department of

Lands ( 1 9 7 9 ) , Mont. , 597 P.2d 49, 36 St.Rep. 389? Respondent S k i l l m a n r a i s e s t h e f o l l o w i n g i s s u e on

cross-appeal:

Did t h e D i s t r i c t C o u r t err i n d e c l a r i n g t h e l a n d i n

q u e s t i o n s h o u l d be reopened f o r p u b l i c b i d r a t h e r t h a n

awarding t h e lease t o S k i l l m a n ?

The arguments of t h e S t a t e a r e n o t p e r s u a s i v e i n t h i s

case. Although t h e S t a t e i s c o r r e c t i n s t a t i n g t h a t J e r k e

i s l i m i t e d t o i t s f a c t s , t h e d i s t i n c t i o n s made by t h e S t a t e a r e not f a t a l t o i t s application here. A s Chief ~ u s t i c e

Haswell p o i n t e d o u t i n J e r k e , t h e c r u c i a l p o i n t of t h e case

is this: "To a l l o w a n e x i s t i n g lessee who d o e s n o t u s e t h e land t o exercise a preference r i g h t consti- t u t e s a n u n c o n s t i t u t i o n a l a p p l i c a t i o n of t h e preference r i g h t s t a t u t e , s e c t i o n 81-405(1), R.C.M. 1947, now s e c t i o n 77-6-205 (1) MCA." , 597 P.2d a t 51, 36 St.Rep. a t 392.

The m e r e f a c t t h a t t h e l e s s e e i n t h i s c a s e i s a n i n d i -

v i d u a l i n s t e a d of a g r a z i n g d i s t r i c t i s n o t s u f f i c i e n t l y

m a t e r i a l t o t h e p o l i c y involved t o disallow t h e a p p l i c a t i o n

of t h e p r e c e d e n t .

F u r t h e r , i f t h e c a s e i s d i s t i n g u i s h a b l e and J e r k e

s h o u l d n 6 t be c o n t r o l l i n g a s p r e c e d e n t , t h e r e i s even more

j u s t i f i c a t i o n f o r a p p l y i n g t h e r a t i o n a l e of J e r k e h e r e . In

J e r k e , a l t h o u g h t h e r e was a s u b l e a s e i n v o l v e d , t h e r e i s no

e v i d e n c e t h a t t h e r e was a n i l l e g a l s u b l e a s e , as i n t h e c a s e

before us. Here t h e l e s s e e , F o s t e r , s u b l e t h i s g r a z i n g

l e a s e w i t h o u t h a v i n g t h e s u b l e a s e approved by t h e Department

of S t a t e Lands a s r e q u i r e d by h i s lease w i t h t h e S t a t e .

S e c t i o n 77-6-205(1), MCA, r e c i t e s i n a p p l i c a b l e p a r t :

" ( 1 ) A l e s s e e of s t a t e l a n d c l a s s e d a s a g r i - c u l t u r a l , g r a z i n g , town l o t o r c i t y l o t who h a s p a i d a l l t h e r e n t a l s due from him t o t h e s t a t e and - - n o t v i o l a t e d - t e r m s - -s lease who h a s - the of h i - i s e n t i t l e d t o have h i s l e a s e renewed . . ." (Emphasis s u p p l i e d . )

F u r t h e r , ARM §26.3.108(2) e s t a b l i s h e s t h e D e p a r t m e n t ' s

policy:

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