Deschner v. State, Department of Highways, 2017 MT 37

Background

In 2010 a ~2 million pound sandstone slab fell from the Billings Rimrocks and destroyed plaintiffs’ home at 1313 Granite Avenue; the slab originated from city-owned property above the house.
Plaintiffs (Deschner and Lodge) alleged the State’s reconstruction/placement of Highway 3 and Culvert 239 (installed in 1963) increased runoff at the fall site and proximately caused the rockfall.
The District Court granted summary judgment to the City but denied it to the State; trial proceeded against the State.
Plaintiffs’ experts said Culvert 239 increased water at the site and caused the slab to fall; the State’s multiple experts testified the culvert did not substantially contribute and that rockfalls occur naturally.
The District Court refused plaintiffs’ proposed inverse-condemnation instructions and instead instructed using the five Albers factors (from Rauser).
The jury found the State 0% responsible, plaintiffs 100% responsible, and awarded no inverse-condemnation recovery; plaintiffs appealed the jury instruction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the District Court erred by giving an Albers-factor-based instruction on inverse condemnation	Deschner & Lodge: Montana inverse-condemnation law requires only (1) compensable property interest, (2) damage, (3) public improvement deliberately planned and built, and (4) causation; the first and third are legal questions — thus jury should decide only damage and causation; Albers factors should not be treated as elements	State: Rauser adopting Albers factors is established precedent; instruction was proper and, alternatively, any error was harmless because jury found State did not cause the damages	Affirmed. Court said Albers factors should not be rigid elements inconsistent with Montana Const. art. II § 29, but refusal to give plaintiffs’ proposed instruction was not reversible error because plaintiffs failed to prove causation — the essential element; no prejudice shown
Whether Albers factors must be applied as elements or only as guides consistent with the Montana Constitution	Plaintiffs: Albers factors are incommensurate in part with Article II, § 29 and should not be strictly applied as elements	State: Rauser remains controlling and supports use of Albers factors	Court: Rauser adopted Albers factors as guides; subsequent Montana precedent focuses on requirement that a public improvement deliberately planned and built proximately caused physical damage; Albers factors should not be rigidly applied as elements
Whether causation was adequately submitted to the jury and whether special verdict form was sufficient	Plaintiffs: Jury allocation question was negligence-focused and did not resolve inverse-condemnation causation as framed	State: Jury’s finding that State contributed 0% to cause of damages resolved the common causation issue	Court: Special verdict adequately presented causation; jury’s allocation (State 0%) showed plaintiffs failed to prove causation common to both negligence and inverse-condemnation claims
Whether any instructional error was prejudicial	Plaintiffs: Refusal to give their instruction prejudiced their rights	State: Any error was harmless because jury found no causation	Court: No reversible prejudice; plaintiffs failed to establish the essential element (causation), so their substantial rights were not affected

Key Cases Cited

Rauser v. Toston Irrigation Dist., 172 Mont. 530, 565 P.2d 632 (Mont. 1977) (adopted Albers factors as guides in inverse-condemnation analysis)
Albers v. County of Los Angeles, 398 P.2d 129 (Cal. 1965) (formulation of five-factor test for public-works takings)
Kafka v. Mont. Dep’t of Fish, Wildlife & Parks, 348 Mont. 80, 201 P.3d 8 (Mont. 2008) (recognizes recovery where public improvement proximately causes physical damage)
Buhmann v. State, 348 Mont. 205, 201 P.3d 70 (Mont. 2008) (inverse-condemnation principles reaffirmed)
Knight v. City of Missoula, 252 Mont. 232, 827 P.2d 1270 (Mont. 1992) (states that recovery requires physical damage proximately caused by a deliberately planned and built public improvement)
Thelen v. City of Billings, 238 Mont. 82, 776 P.2d 520 (Mont. 1989) (inverse-condemnation precedent)
Adams v. Dep’t of Highways, 230 Mont. 393, 753 P.2d 846 (Mont. 1988) (inverse-condemnation precedent)
Knight v. City of Billings, 197 Mont. 165, 642 P.2d 141 (Mont. 1982) (inverse-condemnation precedent)