Appellate Victory with Important State-Wide Implications for Municipal Liability

Shareholders Gerry Fagan and Afton Ball prevailed on behalf of the City of Billings in an appeal before the Montana Supreme Court in a case with important implications for governmental entities throughout Montana. In an Order dated July 5, 2022, the Supreme Court, in a 5-2 vote, affirmed a district court’s Order granting the City summary judgment. The case involved a sewer backup that discharged waste into the basement of a home owned by a local couple. The backup appeared to have been caused by a buildup of grease in the sewer line that led to a blockage. The couple sued the City on a single claim for inverse condemnation. The couple alleged that the discharge damaged their home in a manner that constituted an illegal taking of their private property by the City for public use. If successful, the couple would have been entitled to their attorney fees incurred in litigating the case. For that reason, the case threatened to turn what traditionally had been a tort-type claim that presented “incidental, inadvertent, or consequential damage” to property into a compensable inverse condemnation claim which presented the opportunity for attorney fee awards to the successful claimant under a “takings” analysis. The majority rejected the claim in this case, holding that a viable inverse condemnation claim must include evidence that the physical damage caused by a governmental improvement or project must have been reasonably foreseeable when the project was commenced and that generally “single-event” or one-time events did not constitute inverse condemnation.

The decision is reported at Wittman and Taylen v. City of Billings, 2022 MT 129.

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