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Tuesday, October 15, 2019

Montana Supreme Court rules Carlyle Infrastructure Partners entitled to fees in Missoula's water system case

State Supreme Court

By Charmaine Little | Jun 26, 2018

HELENA, Mont. (Legal Newsline) – The parent company of the former owner of Missoula, Montana’s water supply system is entitled to legal fees, the Montana Supreme Court determined June 5.

The court affirmed in part and reversed in part the 4th Judicial District’s decision to reduce attorneys’ and court fees that Carlyle Infrastructure Partners LP, the holding company of Mountain Water Co., was awarded in a case with the city of Missoula, but reversed and remanded the lower court’s decision to limit discovery.

While the Condemnation Commissioners awarded Mountain Water $88.6 million based on the value of the water system and awarded Carlyle nothing, the main focus of this ruling was the attorneys’ fees and costs and whether Carlyle was owed any as the notion of whether it prevailed in the case was questioned considering it didn’t get anything in the awarded amount. 

The lower court reduced the $7 million Mountain Water and Carlyle claimed to a little more than $3.9 million, giving Mountain Water roughly $1.8 million in attorney fees and $1 million in expenses, while awarding Carlyle $900,000 in attorney fees and $223,000 in expenses.

Both Carlyle and Mountain Water appealed “raising the district court’s denial of their constitutional challenges to the statute,” according to the Supreme Court opinion. The city also filed a cross appeal to object to the district court’s decision.

For a brief background, the city offered to buy the water system for $50 million in 2014 and the defendants, the property owners, denied the offer. The mayor followed up with a public presentation that consisted of a team of lawyers to represent the city in a condemnation lawsuit against the defendants over the water system. 

The legal team included lawyers from various locations such as Portland, Oregon and New York as well as Missoula lawyers. Missoula began condemnation proceedings against Mountain Water and Carlyle in April 2014.

The appeals court backed the lower court’s decision to deny the defendants’ facial constitutional challenge as well as their argument the expenses “actually incurred” during the legal process, according to the opinion. It noted this as the sole reason for their appeal against the district court’s percentage reduction of the argument as the reason it affirmed this portion of the lower court’s decision. 

Still, it reversed and remanded for further proceedings the permission of the defendants’ chance to perform limited discovery to decide the basis of their claim.

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