Schweitzer v. City of Whitefish, 2016 MT 254

Appellants Warren Schweitzer and Ingela Schnittger own two lots annexed into the City of Whitefish in 2005 after they petitioned for annexation to obtain city water/sewer access. They later declined to pay to extend services to their lots.
In 2010 Appellants petitioned the City for de‑annexation; the City denied the petition. Appellants filed a declaratory action challenging the denial but failed to serve the complaint within three years; the district court dismissed that action with prejudice in 2014 on Rule 4/statute‑of‑limitations grounds.
In 2014 Appellants filed a second petition for de‑annexation and then a new declaratory action after the City again denied de‑annexation; the second petition added arguments about termination of an interlocal agreement and surrounding zoning jurisdiction.
The City asserted claim preclusion (res judicata) as a defense to the 2014 declaratory action and moved for summary judgment; the district court granted summary judgment, finding the 2010 dismissal with prejudice was a final judgment and the two actions arose from the same facts and issues.
The Montana Supreme Court affirmed, holding all elements of claim preclusion were satisfied: same parties, same subject matter (same set of substantial facts), same issues (including issues that could have been raised earlier), same capacities, and a final judgment on the merits in the first action.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the 2014 declaratory action is barred by claim preclusion (res judicata)	The 2014 suit raised new legal arguments (e.g., termination of the interlocal agreement; § 76‑3‑510 application) and thus is not the same claim	The 2014 suit arises from the same core facts (annexation, refusal to extend services, petition and denial of de‑annexation) as the 2010 suit, so it is precluded	Affirmed: claim preclusion applies; all res judicata elements satisfied and summary judgment proper
Whether termination of the interlocal agreement created a materially different issue avoiding preclusion	Termination created a new, material fact (an “island” of city property) that alters the legal inquiry	Termination did not change the City’s jurisdiction over the annexed lots and did not materially alter the core issue under § 7‑2‑4805, MCA	Held: termination was not a material factual change for preclusion; the issue remained the same

Asarco LLC v. Atl. Richfield Co., 383 Mont. 174 (2016) (res judicata promotes finality and an end to litigation)
Brilz v. Metro Gen. Ins. Co., 366 Mont. 78 (2012) (articulated Montana’s multi‑part test for claim preclusion)
Touris v. Flathead Cnty., 361 Mont. 172 (2011) (dismissal with prejudice is a final judgment for res judicata)
Harlem Irrigation Dist. v. Seventeenth Judicial Dist. Ct., 271 Mont. 129 (1995) (subject‑matter element focuses on the same underlying set of material facts)
Hawkes v. Mont. State Dep’t of Corr., 348 Mont. 7 (2008) (order of dismissal with prejudice is a final judgment on the merits)