Montana Supreme Court Rules for County in Lakeside Condo Lawsuit

By Beacon Staff

The state Supreme Court upheld a Flathead District Court ruling declaring that three Lakeside condominium projects are subject to the county subdivision review process, a ruling called both commonsense and baffling by those involved.

“It’s a decision that provides land use guidance when dealing with whether condominium projects can evade subdivision review and public participation and input,” said Flathead County Planning Director Jeff Harris.

The ruling affirmed District Judge Ted Lympus’ January decision to reject the claim that unzoned property does not have applicable building regulations.

Instead of going through subdivision review, which includes a vetting process by the county on community impact and allows for public and agency comment, the landowners recorded declarations of residential condominiums at the clerk and recorder’s office.

The landowners – Jim and Beverly Etzler, Dennis and Do nna Thornton and the Blomgren Family Trust – sued Flathead County after the county instructed the clerk and recorder’s office not to accept any deeds for the developments because the projects had not been reviewed properly.

Montana state law has two criteria for subdivision review exemption. The first is if the subdivision was expressly considered at the time of the original development approval. The second is if the subdivision is in conformance with applicable zoning regulations. Both the District and Supreme courts decided that neither of these exemptions applied to any of the condominium projects.

The landowners all filed their projects separately at the clerk and recorder’s office in 2006. They eventually joined together in the lawsuit against the county.

The Etzlers’ project, Osprey Ridge, would have consisted of 31 buildings and 124 units. They had obtained approval to subdivide in 2005 into five single-family homes.

The Etzlers claimed exemption because their property is in a “scenic corridor zoning district” – a district that the county definitions say regulates roadside signs and cellular towers. They argued that this meant no other land-use regulations applied to the area, allowing for condominium development.

Both the District and Supreme courts rejected this interpretation, declaring that scenic corridor zoning regulations do not address appropriate land uses or densities, and that the Etzlers’ argument “misconstrues the plain language of the regulation.”

Michael Ferrington, a real estate lawyer representing the Etzlers, called the recent decision “baffling and disturbing.” The language should clarify that condominiums are specifically not allowed, he said, which is a matter that should be decided by the state Legislature not the courts.

Ferrington also said his clients were targeted by special interest groups in Lakeside that he said were against the condominium project from day one.

“It seems like it’s a very political decision,” Ferrington said.

The Etzlers also argued that other condominium projects were exempted from subdivision review without meeting state statutory standards. The Supreme Court upheld the District Court’s decision that there was not enough evidence provided to determine the validity of the argument.

The other landowners affected by the Supreme Court’s summary decision argued that their projects were exempt from government review because they were on unzoned land.

The Blomgrens’ project, Misty Cliff I, would have included four buildings with 105 condominium units. The Thorntons’ proposed project would have included 17 buildings and 385 units in a development called Misty Cliff II.

The Thorntons and the Blomgrens argued that because they were on unzoned land they had a “wholesale blanket exemption” from subdivision review and the right to build condominiums without government intervention.

In their ruling, the Supreme Court called this argument a “tortured” interpretation of state law and that no such “blanket exemption” existed for the condominiums.

If the Supreme Court had not affirmed this decision by the District Court, it could have set a precedent that non-zoned areas are free for development without review.

“This will guide the outcome of other lawsuits across the state that are connected to this type of litigation,” Harris said.

The Supreme Court also upheld the ruling that only a local governing body has authority to decide if a division of land is exempt from subdivision review and that tax designations from the Department of Revenue or documents from the clerk and recorder are not merits of approval.

The Etzlers, Thorntons and Blomgrens are also part of the lawsuit brought against the county to stop the proposed Lakeside Neighborhood Plan. The suit accuses the county of secret planning and evading the public process.