Whitefish wins Downtowner lawsuit
By LYNNETTE HINTZE
The Daily Inter Lake
The Montana Supreme Court has upheld the Flathead District Court dismissal of a lawsuit against the city of Whitefish and four former City Council members.
Shelley Germann, former owner of the Downtowner motel complex in downtown Whitefish, sued the city six years ago over the city's refusal to issue a permit for a casino and sports bar she planned to open at the motel.
She later switched lawyers and filed an amended complaint, listing City Council members Jan Metzmaker, Shirley Jacobson, Gary Stephens and Don Nelson as defendants along with the city. Only Jacobson still serves on the council.
A Supreme Court ruling issued Tuesday said Germann lacked a protected property interest in making her claims. Federal due-process and takings claims require a plaintiff first to demonstrate that he or she possesses a constitutionally protected property interest.
"Basically, the court said what we did was lawful," Whitefish City Attorney John Phelps said Thursday. "She wasn't far enough along to claim we'd taken anything away from her."
An earlier District Court ruling said the city was justified in passing an emergency ordinance requiring conditional-use permits for new bars and casinos. But that was only one piece of the legal battle.
Germann, a U.S. citizen who splits her time between Whitefish and Canada, alleged in an amended complaint that the city violated her civil rights and discriminated against her by refusing to grandfather her remodeling project, for which she had a valid city building permit.
The amendment also addressed her loss of business income and decline in property value because of the inability to operate a bar and casino.
Zoning laws in place before the emergency ordinance allowed for bars and casinos in business districts, but the Supreme Court ruling said zoning ordinances could not authorize her to operate a bar or casino.
"Only the Department of Revenue and Montana Gambling Control Division possessed the authority to approve Germann's request to open a bar and casino," the high court ruling stated. "Germann had yet to obtain a liquor license at the time the city passed the ordinances and denied her applications for conditional-use permits. She therefore did not have a property interest in operating the Downtowner as a bar."
The court also disagreed with Germann's assertion that she was entitled to a liquor license; the mere fact she had applied for a liquor license when the city imposed its emergency ordinance didn't guarantee she would receive the license.
Germann e-mailed the Daily Inter Lake, saying she is currently out of the country on business and doesn't plan to comment on the ruling.
The only remaining issue in the case involves attorney fees. The Supreme Court partially affirmed the District Court's award of attorney fees to council members and remanded the issue to District Court to re-calculate fees.
Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com