Mountain Water Co. v. State, Department of Revenue, 394 P.3d 922

Mountain Water operated water system property in Missoula; the City of Missoula filed a condemnation action and served summons on April 2, 2014.
A preliminary order of condemnation was entered and later affirmed by this Court, but no final condemnation order transferring title has been entered; Mountain Water retained possession.
Montana’s condemnation statute, § 70-30-315, provides that the condemnor must be assessed the condemnor’s pro rata share of taxes for land being taken as of the date of possession or summons, whichever occurs first.
The Department of Revenue refused to reassign tax assessments to the City absent a recorded transfer certificate under the Realty Transfer Act and continued assessing Mountain Water; Mountain Water paid taxes under protest and sued for declaratory relief seeking a refund.
The District Court granted summary judgment for Mountain Water, ordering the Department to assess taxes to the City (from the summons date) and to refund taxes Mountain Water paid with interest. The Department appealed.

Issue	Mountain Water’s Argument	Department’s Argument	Held
Whether § 70-30-315 requires the condemnor to be assessed (and condemnee refunded) taxes from the date of summons/possession during an ongoing condemnation before a final order transfers title	§ 70-30-315’s plain language makes the condemnor responsible from date of summons/possession; it is the controlling, specific rule over general transfer/assessment rules	The Department must continue to assess the record owner under the Realty Transfer Act until a final recorded transfer; assessing a tax-exempt government condemnor would be improper and creates administrative and constitutional issues	Reversed the District Court: the statute sets the proration rule, but possession/title rules govern who actually bears the tax payment obligation; because Mountain Water retained possession and title until a taking, it remains responsible for payment now and is not entitled to a refund at this time. The Department’s assessment practice stands until a taking occurs or possession changes.

City of Missoula v. Mt. Water Co., 384 Mont. 193, 378 P.3d 1113 (Mont. 2016) (prior appeal affirming preliminary condemnation order)
City of Billings v. Hunt, 257 Mont. 99, 847 P.2d 715 (Mont. 1993) (taking occurs on vesting of title, actual possession, or constructive possession)
W. Energy Co. v. Mont. Dep’t of Revenue, 297 Mont. 55, 990 P.2d 767 (Mont. 1999) (statutory interpretation begins with plain meaning of the text)