Homeowners win slope lawsuit

A District Court judge has ordered the Flathead County commissioners to follow through with a federal grant it rejected in March 2014 for slope stabilization near the Village Greens subdivision and golf course.

The commissioners’ decision to terminate a $298,000 Federal Emergency Management Agency grant was unconstitutional, Flathead District Judge Ted Lympus said in his order granting summary judgment to two homeowners who sued the county.

Scott Gearhart and Susan Storfa, who own property and homes on the east side of Whitefish Stage Road on a bluff above Village Greens, sued the county after the commissioners abruptly decided to terminate the grant. The county Office of Emergency Services worked with homeowners over four years to get the mitigation grant.

Storfa lost a large section of her property when part of the bluff sloughed off during a 2010 landslide, and both homeowners feared further damage. Another portion of the steep bank collapsed last June under the weight of record rainfall.

A 60-acre stormwater management pond for Village Greens Golf Course is directly below the affected bluff and sediment from the landslides has reduced the pond’s ability to manage stormwater, according to the homeowners’ complaint.

“We are all very happy with the news,” Gearhart said. “As far as we know the grant absolutely is still viable.”

The Flathead County Attorney’s Office has not received any communication that the grant is not available, Deputy County Attorney Tara Fugina said.

Kent Atwood of the Montana Department of Emergency Services said Wednesday the mitigation work must be completed by September 2016, according to the terms of the federal grant.

The homeowners contributed a match of $102,000 and the county — which does not have a financial stake in the grant — was the required sponsoring government agency, serving only as a “flow-through” agency for the purpose of providing the matching funds from the homeowners.

All three commissioners at the time — Gary Krueger, Cal Scott and Pam Holmquist — voiced concerns about the county’s liability if the slope were to fail after being stabilized, and based their decision to stop the grant on the liability issue.

In April 2014 Lympus granted a temporary restraining order halting the commissioners from terminating the federal grant. The commissioners intended to send a letter declining the grant to the Montana Department of Emergency Services, but the court order stopped that from happening.

As the lawsuit played out, the county sought a declaration that it is legally entitled to terminate the grant on the basis that the homeowners are not third-party beneficiaries of the grant agreement and therefore “cannot enforce any provision therein.”

But Lympus said it’s “disingenuous” for the county to argue that the landowner agreement shouldn’t be considered since the homeowners paid the $102,000 that the county was obliged to contribute.

The commissioners’ resolution terminating the grant was unconstitutional because it interfered with the homeowners’ rights under the landowner agreement that was part of the grant process.

“Despite the county’s right to terminate the grant under its terms or federal law ... once it entered into a contract with the landowners, it could not pass a resolution that would interfere with that contract,” Lympus wrote.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.