Burnt Hollow LLC, Burnt Hollow LLC, Lockhart Meadows LLC
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FILED 12/13/2023 Sara Calkins CLERK Montana Water Court STATE OF MONTANA By: D'Ann __________________ CIGLER 41E-1000-R-2023 Montana Water Court PO Box 1389 Bozeman, MT 59771-1389 (406) 586-4364 1-800-624-3270 watercourt@mt.gov Brown, Stephen R 5.00 IN THE WATER COURT OF THE STATE OF MONTANA UPPER MISSOURI DIVISION BOULDER RIVER—TRIBUTARY OF THE JEFFERSON RIVER (BASIN 41E) PRELIMINARY DECREE ************************* CASE 41E-1000-R-2023 41E 7461-00 CLAIMANT: Burnt Hollow LLC OBJECTOR: Burnt Hollow LLC COUNTEROBJECTOR: Lockhart Meadows LLC ORDER REINSTATING COUNTEROBJECTION BACKGROUND The Water Court included claim 41E 7461-00 in the Preliminary Decree for the Boulder River Basin (Basin 41E) issued on October 19, 2022. Burnt Hollow LLC (“Burnt Hollow”) owns the claim. Issuance of the decree started an objection period with an April 17, 2023 objection deadline. The Court later extended the objection deadline to July 17, 2023. Burnt Hollow filed a timely self-objection to claim 41E 7461-00. No one else objected to the claim. The Water Court also included claim 41E 94306-00 in the Basin 41E Preliminary Decree. Lockhart Meadows LLC (“Lockhart Meadows”) owns this claim. Burnt Hollow objected to claim 41E 94306-00. After the objection period closed, the Court gave notice to claimants that objections had been filed. The notice provided the opportunity for claimants that received objections to file counterobjections. The counterobjection period closed on October 2, 1 2023. On September 28, 2023, Paul T. Smith (“Smith”) filed a counterobjection to Burnt Hollow’s claim 41E 7461-00. The counterobjection form is signed by Paul T. Smith. On October 6, 2023, the senior water master assigned to this basin issued an Order Rejecting Counterobjection Filing. On November 13, 2023, Lockhart Meadows filed a Motion for Relief From Order Rejecting Counterobjection Filing. The motion contends the counterobjector identified on the form should have been Lockhart Meadows, not Paul T. Smith. The motion also states the signature should have been by “Lockhart Meadows LLC by Paul B. Smith, Member.” Burnt Hollow did not file a response to the motion. DISCUSSION The senior water master rejected the counterobjection pursuant to applicable provisions of the Water Use Act and the Court’s Water Right Adjudication Rules. The statute states: (3) Upon expiration of the time for filing objections under subsection (2), the water judge shall notify each party whose claim received an objection that an objection was filed. The notice must set forth the name of each objector and must allow an additional 60 days for the party whose claim received an objection to file a counterobjection to the claim or claims of the objector. Counterobjections must be limited to those claims that are included within the particular decree issued by the court. Section 85-2-233(3), MCA (emphasis added). The adjudication rules largely replicate the statute and requires that counterobjections be filed in compliance with the statute. Rule 6(b), W.R.Adj.R. In applying these provisions, the Court may reject a counterobjection not filed in response to an objection. In this case, the master concluded Burnt Hollow did not object to any claim owned by Paul T. Smith (or Paul B. Smith), so Smith lacked the statutory predicate to counterobject to any claim Burnt Hollow owned. Lockhart Meadows’ motion asks the Court to recognize the counterobjection to claim 41E 7461-00 because the counterobjection form mistakenly identified the counterobjector as Smith, not Lockhart Meadows. The motion argues the party name and signatures were correctable errors that justify reinstating the counterobjection to claim 41E 7461-00 with Lockhart Meadows as the correct counterobjecting party. 2 The Court treats Lockhart Meadows’ motion as an objection to the master’s order. As such, the Court may grant the motion if the motion proves the master’s conclusion to dismiss the counterobjection was incorrect. Heavirland v. State, 2013 MT 313, ¶ 14, 372 Mont. 300, 304, 311 P.3d 813, 817. If the Court determines a master incorrectly dismissed a counterobjection, the Court may reinstate the counterobjection. Nelson v. Blanchette, Case 41I-2008-R-2023; 2023 Mont. Water LEXIS 482. Lockhart Meadows relies on Rule 60(b)(1), M.R.Civ.P. as authority for the Court to correct the mistake and reinstate the counterobjection. This rule authorizes the Court to relieve a party from an order based on “mistake, inadvertence, surprise, or excusable neglect.” Id. As Lockhart Meadows notes in its brief, excusable neglect “requires some justification for an error beyond mere carelessness or ignorance of the law on the part of the litigant or his attorney.” (Doc. 3.00, at 4, citing Frye v. Roseburg Forest Prods. Co., 2020 MT 10, ¶ 12, 398 Mont. 347, 456 P.3d 573). Lockhart Meadows identifies two items it contends should be excused as mistakes. First, it asserts the counterobjection form identifying “Paul T. Smith” was a typographical error and the form should have identified “Paul B. Smith.” (Emphasis added). Second, according to the Affidavit of Paul B. Smith dated November 9, 2023 (“Smith Aff.”) filed in support of the motion, Smith “mistakenly entered and signed my name instead of ‘Lockhart Meadows LLC by Paul B. Smith, Member’ as I should have.” (Smith Aff., ¶ 5). Smith explains he is a member and the registered agent for Lockhart Meadows. As Lockhart Meadows also notes, this inquiry requires the Court to consider the surrounding circumstances in determining whether to grant the requested relief. Frye, ¶ 12. The Court analyzes the surrounding circumstances in light of the purpose of the counterobjection process. As the Court recently explained: The ability to file a counterobjection did not exist when the Water Use Act was initially passed. Counterobjections were added to the adjudication process because some objectors were waiting to the last day of the objection period to object to their neighbor's water rights. Sometimes, those objectors owned claims with notable problems. By waiting until the end of the objection period, the owners of such claims could avoid challenges to their own rights while attacking those held by others. To prevent sandbagging and promote a more accurate adjudication, the legislature 3 created a counterobjection period which enabled a person receiving an objection to counterobject to any water right held by the objector. Nelson v. Blanchette, 2023 Mont. Water LEXIS 482, *3; see also, In re Erb, 2016 Mont. Water LEXIS 2, *4 (describing history and purpose of counterobjection process). If the Court concludes a counterobjection deviates from these purposes, the Court may reject the counterobjection. See, e.g. In re Brewer Ranch LLC, Case 41I-2003-R-2023; Mont. Water LEXIS 393 (counterobjection not filed in response to objection). In this case, the circumstances surrounding the dismissed counterobjection weigh in favor of it being reinstated. Lockhart Meadows received an objection to claim 41E 94306-00 from Burnt Hollow. Receipt of the counterobjection triggered Lockhart Meadows’ right to counterobject to Burnt Hollow’s claims. The counterobjection was timely filed within the counterobjection period. The only flaw in the counterobjection was to the name of the counterobjector. Lockhart Meadows provides a viable explanation as to why the name was wrong – the form named a limited liability company member, not the limited liability company itself. Even assuming the counterobjector name on the counterobjection form contained a typographical error, the counterobjector name should have been Lockhart Meadows rather than some version of Paul Smith because Lockhart Meadows is the sole owner of claim 41E 94306-00. Because a limited liability company is distinct from its members, an “LLC generally may not appear in court pro se through one of its members.” Sagorin v. Sunrise Heating & Cooling, LLC, 2022 MT 58, ¶ 11, 408 Mont. 119, 506 P.3d 1028. In effect, Smith was not the real party in interest as to the rights to file the counterobjection. Although Lockhart Meadows does not cite the rule, the Montana Rules of Civil Procedure states a court “may not dismiss an action for failure to prosecute in the name of the real party in interest until, after any objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be substituted into the action.” Rule 17(a)(3), M.R.Civ.P. Under Rule 17, the counterobjection should not have been dismissed without first providing the opportunity to correct the real party in interest. Lockhart Meadows’ motion 4 satisfies the rule. Moreover, Lockhart Meadows did not delay in asking for relief, and other than mistakenly filing the counterobjection under the wrong name, the counterobjection is consistent with the purpose and procedure for counterobjections. Finally, Burnt Hollow did not object to Smith’s counterobjection, nor did it respond to Lockhart Meadow’s motion. Under Uniform District Court Rule 2(b), the Court may accept the failure to file an answer brief as an admission that the motion is well taken. For these reasons, Lockhart Meadows demonstrates the counterobjection should be reinstated in its name. ORDER Therefore, it is ORDERED, that Lockhart Meadows’ Motion for Relief From Order Rejecting Counterobjection Filing is GRANTED. The counterobjection filed on September 28, 2023, by Paul T. Smith (“Smith”) as to claim 41E 7461-00 is reinstated, with Lockhart Meadows substituted as the real party in interest. This case is recommitted to senior water master Kathryn Lambert for further proceedings. ELECTRONICALLY SIGNED AND DATED BELOW. 5 Electronically Signed By: Hon. Judge Stephen R Brown Wed, Dec 13 2023 07:43:37 AM Service Via Electronic Mail: Abigail R. Brown Attorney at Law Parsons Behle & Latimer 127 East Main Street, Suite 301 Missoula, MT 59802 Main: 406-317-7220 Direct: 406-317-7243 AbbyBrown@parsonsbehle.com ecf@parsonsbehle.com William P. Driscoll Ryan McLane Franz & Driscoll, PLLP PO Box 1155 Helena, MT 59624-0005 office@franzdriscoll.com ryan@franzdriscoll.com wpd@franzdriscoll.com This Order Only: Kathryn Lambert Senior Water Master Montana Water Court kalambert@mt.gov *Caption and Service List Updated 12-7-2023* \\JUDHLNSRV-DATA\Share\JUDGALH2OSRV (Datavol)\Share\WC-BASIN FOLDERS\41E PD\41E CASES\1000R\1000R Rule 60(b) Order 12-7-23 nr.docx 6
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