TOWN OF BOULDER v BULLOCK

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No. 81-04 IN THE SUPREMF: COURT OF THE STATE OF MONTANA TOWN OF BOULDER, Plaintiff, Cross-Appellant, and Respondent, WILLIAM BULLOCK and SONJA BULLOCK, Defendants and Cross-Respondents and Appellants. Appeal from: District Court of the Fifth Judicial District, In and for the County of Jefferson. Honorable Nat Allen, Judge presiding. Counsel of Record: For Cross-Appellant: Allen Le Mieux, Boulder, Montana Harlen, Picotte & Thompson, Helena, Montana a-,-Nmimm- Submitted on briefs: June 17, 1981 Decided : Filed: 2 1 @@' 2 1 1981 Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d the Court. t h e Opinion of The Town o f B o u l d e r f i l e d a c o m p l a i n t on F e b r u a r y 6 , 1979, to enjoin t h e Bullocks b u i l d i n g on any p a r t o f from c o n s t r u c t i n g their new a c e r t a i n d e s i g n a t e d town s t r e e t . The B u l l o c k s a n s w e r e d and a l s o f i l e d a c r o s s - c o m p l a i n t damages. for The D i s t r i c t C o u r t o f t h e F i f t h J u d i c i a l D i s t r i c t , S t a t e o f Montana, i n and f o r t h e C o u n t y of J e f f e r s o n , d i s - m i s s e d t h e c o u n t e r c l a i m , e n t e r e d a judgment i n f a v o r o f t h e Bullocks on the injunction motion t o r e c o n s i d e r . and then denied The B u l l o c k s a p p e a l e d t h e e n t r y o f judgment o f d i s m i s s a l on t h e i r c o u n t e r c l a i m . o r d e r d a t e d March 1 9 , prejudice until a the Bullocks' 1980, dismissed T h i s C o u r t , by t h a t appeal without t r i a l on t h e m e r i t s o f t h e Town's com- p l a i n t had been h e l d . T r i a l b e f o r e t h e p r e s i d i n g j u d g e was h e l d on A u g u s t 25, 1980. The D i s t r i c t C o u r t e n t e r e d f i n d i n g s o f f a c t and c o n c l u s i o n s of l a w and judgment i n favor of refusing t o grant the injunction. dismissal of their cross-appeals building of the The B u l l o c k s a p p e a l t h e counterclaim, denial of an the structure or the Bullocks, and t h e Town o f injunction Boulder preventing affirmative relief the requiring i t s removal. The B u l l o c k s a r e o w n e r s o f property located in the C o n s o l i d a t e d A d d i t i o n t o t h e Town o f B o u l d e r , which p r o p e r t y b o r d e r s on Main and L e s l i e S t r e e t s . tionally known as the L i n n Motel The p r o p e r t y i s t r a d i and c o n s i s t s of t h r o u g h 1 9 o f B l o c k 48 o f t h e C o n s o l i d a t e d A d d i t i o n . time prior to September 1977 the Bullocks Lots 9 Some- determined to b u i l d a home and a n o f f i c e on t h e p r o p e r t y . William Bullock attempted t o determine t h e boundaries of t h e p r o p e r t y . by observing physical H e d e t e r m i n e d t h e b o u n d a r y on L e s l i e S t r e e t the position features of of the lots longstanding, and the including state a of boundary fence e r e c t e d before t h e Bullocks purchased t h e p r o p e r t y . I n addition, he c o n s i d e r e d facilities located t h e power on L e s l i e and telephone poles Street, nearby l o c a t e d on L e s l i e S t r e e t and t h e p o s i t i o n o f t i o n of Leslie Street. Bullock testified and properties t h e used por- t h a t he d i d n o t know where t h e e d g e o f h i s p r o p e r t y was l o c a t e d , t h a t h e d i d not get a building surveyor by to come "eye-balling" out and the area. that he located He t e s t i f i e d his t h a t he had s e e n s u r v e y p i n s on t h e b o u n d a r y where t h e e n c r o a c h m e n t o c c u r r e d , b u t t h a t t h e y w e r e gone a t t h e t i m e h e c o n s t r u c t e d the building property whether on the l i n e with encroachment. certainty, He d i d and h e was not locate his uncertain as to i t s l o c a t i o n was t o t a l l y w i t h i n h i s p r o p e r t y bound- a r i e s a t t h e t i m e of c o n s t r u c t i o n . B u l l o c k made a n a p p l i c a t i o n f o r a b u i l d i n g p e r m i t t o K e n n e t h W. the Town T r e t t i n , t h e c i t y c l e r k and b u i l d i n g i n s p e c t o r o f of Boulder and the b u i l d i n g p e r m i t s by t h e Town. person authorized to issue He was t o l d by T r e t t i n t h a t he would h a v e t o s u b m i t a p l a n showing t h e l o c a t i o n and t h e dimens i o n s of permit. t h e proposed s t r u c t u r e t o r e c e i v e a b u i l d i n g Trettin c l e r k and b u i l d i n g testified that inspector, at the time s t r u c t u r e m e a s u r e d from t h e c o r n e r o f specifically city The B u l l o c k s s u b - m i t t e d a p l a n which c o n s i s t e d o f a d r a w i n g o f t h e Bullock property. as d i d n o t h a v e d e t a i l e d knowl- edge of t h e b o u n d a r i e s of L e s l i e S t r e e t . on he, T h i s method a p p r o v e d by T r e t t i n . t h e proposed an e x i s t i n g b u i l d i n g of m e a s u r e m e n t was On S e p t e m b e r 26, 1977, T r e t t i n i s s u e d a b u i l d i n g p e r m i t t o t h e B u l l o c k s b a s e d upon the plan a s submitted. No s u r v e y o f t h e Bullock p r o p e r t y was r e q u i r e d o f t h e B u l l o c k s a t t h a t t i m e . D u r i n g t h e month o f O c t o b e r 1977 t h e B u l l o c k s o r d e r e d m a t e r i a l s , h i r e d c o n t r a c t o r s and c o m p l e t e d t h e e x c a v a t i o n o f t h e i r p r o p o s e d home and o f f i c e , had t h e f o o t i n g s p o u r e d on the had foundation and themselves poured. walls, and the foundation walls T h i s r e q u i r e d t h e e x p e n d i t u r e of s e v e r a l t h o u s a n d d o l l a r s by t h e B u l l o c k s . A d d i t i o n a l p r o g r e s s was made on t h e c o n s t r u c t i o n d u r i n g t h e r e m a i n d e r o f 1 9 7 7 . T h e r e was no e v i d e n c e showing t h a t d u r i n g t h i s p e r i o d o f t i m e anyone i n t h e Town o f B o u l d e r had a n y knowledge t h a t t h e b u i l d i n g b e i n g c o n s t r u c t e d by t h e B u l l o c k s was e n c r o a c h i n g upon L e s l i e S t r e e t . T h i s i n f o r m a t i o n d i d n o t o c c u r u n t i l sometime i n J u n e o r J u l y 1 9 7 8 . During t h e e a r l y c o n s t r u c - t i o n p e r i o d i n 1978 t h e c i t y b u i l d i n g i n s p e c t o r a t t e m p t e d t o f i n d a c u r b box and i n t h e p r o c e s s m e a s u r e d from a s u r v e y pin eighty building property. were feet across inspector, At building the Trettin, street. From sighted that across point the the Bullock t h i s t i m e T r e t t i n assumed t h a t t h e B u l l o c k s into the street, and he so informed the Bullocks. T h e r e was t e s t i m o n y a t t r i a l t h a t , w h i l e t h e B u l l o c k s had no knowledge t h a t t h e y m i g h t be e n c r o a c h i n g on L e s l i e S t r e e t w i t h t h e i r c o n s t r u c t i o n , T r e t t i n had d e t a i l e d knowle d g e o f t h e b o u n d a r i e s of L e s l i e S t r e e t p r i o r t o i s s u i n g t h e b u i l d i n g p e r m i t on S e p t e m b e r 2 6 , 1 9 7 7 . During t h e s p r i n g of 1978 t h e B u l l o c k s p r o c e e d e d t o work on t h e b a s e m e n t f l o o r o f their building and T r e t t i n was a g a i n on particularly a t the building site. the property and A t t h o s e t i m e s h e made no m e n t i o n of t h e a l l e g e d e n c r o a c h m e n t . However, a s noted above, the building inspector in J u l y 1 9 7 8 , i n a t t e m p t i n g t o f i n d t h e c u r b box, f e l t t h a t t h e b u i l d i n g was o u t on t h e s t r e e t and s o i n f o r m e d t h e B u l l o c k s . On July 24, meeting of 1978, William Bullock t h e c i t y c o u n c i l and attended informed the regular the council t h a t T r e t t i n had t o l d him t h a t h e m i g h t b e b u i l d i n g i n t o L e s l i e Street. Bullock further told the council that he was that the w i l l i n g t o have a s u r v e y made. The members o f minutes of the the council council meeting show represented t o Bullock t h a t , were b u i l d i n g i n t o t h e s t r e e t , if he t h e y would n e v e r make a man Bullock t e s t i f i e d t h a t a t t h a t t i m e he t e a r down h i s h o u s e . had i n mind a p r e v i o u s a c t i o n by t h e c i t y c o u n c i l i n O c t o b e r 1 9 7 7 when t h e y c l o s e d t w e n t y f e e t o f a s t r e e t a b u t t i n g t o t h e n o r t h of then a member h i s p r o p e r t y a t t h e b e h e s t of of the c i t y council. a Mr. Randall, I n r e l i a n c e upon the r e p r e s e n t a t i o n s o f t h e members o f t h e c i t y c o u n c i l and w i t h h i s knowledge o f t h e Randall m a t t e r , Bullock proceeded w i t h a d d i t i o n a l work on h i s b u i l d i n g . had completed the basement By A u g u s t 1 4 t h e B u l l o c k s floor, which was poured by a member of t h e c i t y c o u n c i l . S h o r t l y a f t e r August 1 4 , 1978, a s a r e s u l t of a c i t y c o u n c i l m e e t i n g h e l d on t h a t d a t e , B u l l o c k was i n s t r u c t e d by T r e t t i n t o c e a s e c o n s t r u c t i o n u n t i l h i s s u r v e y was s u b m i t t e d t o the c i t y council. August 2 8 , he a t another submitted Bullocks' B u l l o c k d i d c e a s e c o n s t r u c t i o n , and on his building r e g u l a r meeting of survey. was, The in survey fact, the c i t y council, indicated occupying that the approximately e i g h t e e n f e e t o f t h e n o r t h p o r t i o n of L e s l i e S t r e e t . I t is important t o note here t h a t the s t r e e t s , a s l a i d out i n t h i s a d d i t i o n , were e i g h t y f e e t w i d e . On August 28, 1 9 7 8 , a t a m e e t i n g o f t h e c i t y c o u n c i l , Bullock's s u r v e y was r e c e i v e d . instructed Bullocks' Bullock to do what was The t h e n c i t y a t t o r n e y was necessary to take problem w i t h r e g a r d t o t h e s t r e e t . and the acting city took t h e i n s t r u c t i o n s of attorney care of the Both W i l l i a m testified that they t h e c i t y c o u n c i l t o mean t h a t t h e c i t y a t t o r n e y was t o p r o c e e d w i t h l e g a l r e s e a r c h t o d e t e r mine a l a w f u l method by which t h e B u l l o c k s would b e a l l o w e d t o k e e p t h e i r b u i l d i n g where i t w a s , and in particular, to a l l o w them t o o c c u p y a p o r t i o n o f L e s l i e S t r e e t on which t h e encroachment e x i s t e d . The c i t y a t t o r n e y , i n f a c t , p r o c e e d e d on t h a t b a s i s and s o t e s t i f i e d a t t r i a l . R e l y i n g on t h e s e r e p r e s e n t a t i o n s and t h e a c t s o f t h e c i t y c o u n c i l a s an a u t h o r i z a t i o n t o proceed, Bullock testif i e d t h a t he p u t up t r u s s e s and o t h e r e l e m e n t s o f portion of the building S e p t e m b e r 1 2 , 1978. Bullock was a t various times t h e wood until about A f t e r a c i t y c o u n c i l meeting of which not given notice, h e was i n f o r m e d by T r e t t i n t h a t t h e Town now r e q u i r e d him t o t e a r down h i s b u i l d i n g and remove i t from L e s l i e S t r e e t . t h e Town t o r e v o k e the Bullocks, No a c t i o n was e v e r t a k e n by the original building permit issued to and t h e B u l l o c k s a t a l l t i m e s r e l i e d upon t h e b u i l d i n g p e r m i t and t h e a c t s and t h e s t a t e m e n t s o f t h e c i t y c o u n c i l a s a u t h o r i z a t i o n t o proceed with t h e i r c o n s t r u c t i o n . The District against further Court refused to grant an injunction c o n s t r u c t i o n and r e f u s e d t o g r a n t t h e Town of Boulder its r e q u e s t f o r a f f i r m a t i v e r e l i e f t o r e q u i r e t h e removal t h e B u l l o c k s t s t r u c t u r e . W e affirm that judgment. A s a p p e l l a n t s , t h e B u l l o c k s r a i s e one i s s u e : Whether t h e D i s t r i c t C o u r t e r r e d i n g r a n t i n g t h e Town o f B o u l d e r ' s motion t o d i s m i s s t h e i r c o u n t e r c l a i m f o r f a i l u r e t o s t a t e a c l a i m upon which r e l i e f c o u l d be g r a n t e d . As cross-appellant, additional issues: t h e Town o f ( 1 ) Whether Boulder raises two the court erred i n holding t h e Town e s t o p p e d from c l a i m i n g a n i n j u n c t i o n o r r e q u i r i n g the removal of the Bullocks' building insofar as it en- c r o a c h e d upon L e s l i e S t r e e t i n t h e Town o f B o u l d e r ; and ( 2 ) whether c o u r t e r r e d i n f a i l i n g t o g r a n t an i n j u n c t i o n the r e q u i r i n g t h e removal of the Bullocks' building insofar a s i t e n c r o a c h e d upon any p o r t i o n o f L e s l i e S t r e e t . W will e whether the estopped f i r s t turn court from s t r u c t i o n or erred claiming to in an the i s s u e s on c r o s s - a p p e a l , ordering t h e Town o f injunction from Boulder further con- r e q u i r i n g t h e removal o f d e f e n d a n t s ' b u i l d i n g i n s o f a r a s i t e n c r o a c h e d upon t h e p o r t i o n o f L e s l i e S t r e e t and w h e t h e r t h e c o u r t f u r t h e r e r r e d i n r e f u s i n g t o a u t h o r i z e an i n j u n c t i o n r e q u i r i n g t h e removal o f d e f e n d a n t s ' b u i l d i n g from L e s l i e S t r e e t . The Town o f B o u l d e r a r g u e s t h a t i t i s u n d i s p u t e d t h a t a c i t y o r town h a s t h e power t o p r e v e n t t h e o b s t r u c t i o n o f i t s s t r e e t s , c i t i n g s e c t i o n 7-14-4102, "The c i t y o r town c o u n c i l h a s t h e power and p r e v e n t t h e any MCA, . . . obstruction." which p r o v i d e s : to: o b s t r u c t i o n of s t r e e t s Town The denies that (1) Regulate . . . by . . . there was any c o n d u c t on i t s p a r t which would p e r m i t t h e D i s t r i c t C o u r t t o invoke t h e d o c t r i n e of Town from exercising e q u i t a b l e e s t o p p e l and p r e v e n t t h e its o b s t r u c t i o n from t h e s t r e e t . statutory right W do n o t a g r e e . e to remove the The law governing the application of equitable estoppel as it applies to municipal corporations is discussed and set forth by this Court in two cases. City of Billings v. Pierce Packing Co. (1945), 117 Mont. 255, 161 P.2d 636; State ex rel. Barker v. Stevensville (1974), 164 Mont. 375, 523 P.2d 1388. As argued by the Town of Boulder, this Court noted in Stevensville that the great weight of authority holds that a municipal corporation is not bound by acts or statements of its agents or officers made in excess of their authority, even where a third party relied thereon to his detriment. However, we further noted in Stevensville that there are exceptions to that rule. Such exceptions are to be applied with great caution and only in exceptional cases. We find this to be just such a case. This Court stated in City of Billings v. Pierce Packing Co., 117 Mont. "The general rule is that equitable estoppel is applied to municipal corporations with great caution and only in exceptional cases. 'While the doctrine of equitable estoppel is sometimes invoked in what are termed "exceptional cases," it is always applied, and wisely so, with much caution to municipal corporations in matters pertaining to their governmental functions . . There is greater reason why city streets should not be subject to destruction by nonuse or adverse possession than can be found applicable to any other kind of property. No other kind of public property is subject to more persistent and insidious attacks or is less diligently guarded against seizure.' McQuillan, Municipal Corporations, Vol. 4, Sec. 1515, and supporting cases." . Here, the District Court in its Conclusion of Law No. 4 noted : "The elements necessary to make out a case for the application of the Doctrine of Equitable Estoppel are succinctly set forth in the case of City of Billings v. Pierce Packing Co., 117 Mont. 266, 161 P.2d 636. T h o s e e l e m e n t s a r e a s f o l l o w s : ( 1 ) T h e r e must be c o n d u c t - - a c t s , language, or silence-amounting t o a r e p r e s e n t a t i o n o r a c o n c e a l ment o f f a c t s . ( 2 ) T h e s e f a c t s m u s t be known t o t h e p a r t y estopped a t t h e time of h i s s a i d c o n d u c t , o r a t l e a s t t h e c i r c u m s t a n c e s must be s u c h t h a t knowledge o f them i s n e c e s s a r i l y ( 3 ) The t r u t h c o n c e r n i n g imputed t o him. t h e s e f a c t s must be unknown t o t h e o t h e r p a r t y claiming t h e b e n e f i t of t h e e s t o p p e l , a t t h e t i m e when i t was a c t e d upon by him. ( 4 ) The c o n d u c t m u s t be done w i t h t h e i n t e n tion, or a t l e a s t with the expectation, t h a t i t w i l l be a c t e d upon by t h e o t h e r p a r t y , o r under such c i r c u m s t a n c e s t h a t i t is b o t h n a t u r a l and p r o b a b l e t h a t i t w i l l be s o a c t e d ( 5 ) The c o n d u c t must be r e l i e d upon by upon. t h e o t h e r p a r t y , and t h u s r e l y i n g , h e m u s t be ( 6 ) H e must i n f a c t a c t l e d t o a c t upon i t . upon i t i n s u c h a manner a s t o c h a n g e h i s p o s i t i o n f o r t h e worse; i n o t h e r words, he m u s t s o a c t t h a t h e would s u f f e r a l o s s i f h e were compelled t o s u r r e n d e r o r f o r e g o o r a l t e r what h e h a s d o n e by r e a s o n o f t h e f i r s t p a r t y b e i n g p e r m i t t e d t o r e p u d i a t e h i s cond u c t and t o a s s e r t r i g h t s i n c o n s i s t e n t w i t h it." The District conclusions of clerk, had building the Court, its findings of fact l a w , w e n t on t o n o t e t h a t T r e t t i n , sufficient inspector, property in in knowledge, t o have question as both ascertained and that city the the city clerk boundaries Trettin and was on and of the p r o p e r t y f o r a p e r i o d of n e a r l y a y e a r b e f o r e t h e a c t i o n of the c i t y council council's was taken. representation tions t o the to The c o u r t further the Bullocks c i t y attorney t o take and c a r e of noted the its instructhe Bullocks' p r o b l e m s a t t h e c i t y c o u n c i l m e e t i n g on A u g u s t 28, 1 9 7 8 . The constituted facts. judge a found that representation these or acts and concealment many of others material W e agree with t h e D i s t r i c t Court t h a t t h e f a c t s a r e sufficient to deny t h e Town's request for removal of the structure. I n p a r t i c u l a r t h e judge found: t h a t t h e b u i l d i n g p e r m i t c o n s t i t u t e d a n a u t h o r i z a t i o n t o p r o c e e d and a r e p r e - sentation proper; that the that the plans acts submitted and the by Bullocks representations of the were city c o u n c i l c o n s t i t u t e d a r e p r e s e n t a t i o n r e a s o n a b l y t a k e n by t h e Bullocks a s a u t h o r i z a t i o n t o proceed with t h e i r c o n s t r u c t i o n a f t e r t h e presence of that, t h e e n c r o a c h m e n t was d i s c o v e r e d ; and a c c o r d i n g t o t h e t e s t i m o n y o f t h e f o r m e r mayor o f t h e Town, s h e , and i n h e r o p i n i o n o t h e r members o f t h e c o u n c i l , i n t e n d e d t o r e q u i r e t h e removal of t h e s t r u c t u r e a s e a r l y a s J u l y 24, 1 9 7 8 , b u t d i d n o t communicate t h i s i n t e n t i o n t o t h e Bullocks. The i s s u e s r a i s e d by t h e B u l l o c k s on a p p e a l t h e d i s m i s s a l of their counterclaim. As involve previously noted, t h e Town o f B o u l d e r b r o u g h t a n a c t i o n t o e n j o i n d e f e n d a n t s ' e n c r o a c h m e n t on t h e c i t y s t r e e t , and d e f e n d a n t s a n s w e r e d by g e n e r a l d e n i a l and a s s e r t e d a c o u n t e r c l a i m a g a i n s t t h e Town. The Town replied counterclaim which by a the motion court to dismiss granted. d e f e n d a n t s amend t h e i r c o u n t e r c l a i m . and no At the time did The c a s e went t o t r i a l on t h e Town's c l a i m f o r a n i n j u n c t i o n . The c o u r t h e l d t h a t t h e Town was e s t o p p e d from p r e v e n t i n g d e f e n d a n t s ' ment. strike encroach- The t o t a l e f f e c t o f t h e p r o c e e d i n g t h u s f a r h a s b e e n t o j u d i c i a l l y a l l o w t h e e n c r o a c h m e n t and t o d e n y t h e c l a i m e d damages. W a r e confronted w i t h t h e b a s i c i s s u e of whether t h e e counterclaim granted. filed a claim is very nearly the suit, which alleges negligent relief can be the defendants' an a s s e r t i o n t h a t b e c a u s e t h e defendants c o u n t e r c l a i m c a n be d i v i d e d count upon S t r i p p e d down t o t h e e s s e n t i a l s , counterclaim Town states have been damaged. i n t o three counts. conduct giving rise to The The f i r s t something l i k e an e s t o p p e l , that the changing a l t h o u g h t h e term " e s t o p p e l " is n o t used, council their its by position action to led their the Bullocks detriment. a l l e g e s a v i o l a t i o n of defendants' It into further constitutional right to due p r o c e s s w i t h r e s p e c t t o a p r o p o s a l a t t e m p t t o pur- t h e s t r e e t right-of-way chase a p o r t i o n of or i n t h a t defen- d a n t s were n o t g i v e n n o t i c e o f a n y p r o p o s e d s a l e which was allegedly on the agenda of the council at the time this Bullocks were trouble occurred. The second count alleges that the v i c t i m s o f d i s c r i m i n a t i o n by t h e Town. It lists individuals whose street and structures encroach alleges that on t h e Town, various having allowed o t h e r is u n l a w f u l l y d i s c r i m i n a t i n g ments, a t t e m p t i n g t o remove d e f e n d a n t s ' The third building permit count right-of-ways against encroach- defendants by encroachment. alleges that the Town issued a t o t h e d e f e n d a n t s and u n l a w f u l l y m i s r e p r e - s e n t e d t o them t h e y c o u l d l e g a l l y b u i l d a s t r u c t u r e on t h e i r property and t h a t defendants relied to their d e t r i m e n t on the misrepresentations. In r e s u l t of each count t h e Town's the Bullocks conduct. claimed damages as a The B u l l o c k s h a v e a l l e g e d l y s u f f e r e d " h u m i l i a t i o n , f r u s t r a t i o n , p u b l i c r i d i c u l e , l o s s of business reputation, m e n t a l a n g u i s h and m o r t i f i c a t i o n . " They a l s o c l a i m t h a t i f building, c o s t of t h e y w e r e r e q u i r e d t o remove t h e i r t h e y would be e n t i t l e d t o t h e sum o f $ 2 2 , 5 0 0 a s a removal. As cided i n t h e i r favor. noted above, that i s s u e h a s b e e n de- D e f e n d a n t s f u r t h e r c l a i m damages o f $450 p e r month f o r l o s s o f r e n t and t h e i n a b i l i t y t o c l o s e down a motel structure. Defendants prayed, among other f o r t h e items o f damage m e n t i o n e d and f o r a t t o r n e y things, fees. The Town's motion to R u l e 1 2 ( b ) ( 6 ) , M.R.Civ.P., dismiss was made p u r s u a n t to which r e a d s i n p e r t i n e n t p a r t a s follows: " ( b ) How p r e s e n t e d . Every d e f e n s e , i n law o r f a c t , t o a c l a i m f o r r e l i e f i n any p l e a d i n g , whether a c l a i m , c o u n t e r c l a i m , cross-claim, or t h i r d p a r t y c l a i m , s h a l l be a s s e r t e d i n t h e r e s p o n s i v e p l e a d i n g t h e r e t o i f one is required, except t h a t the following defenses may, a t t h e o p t i o n o f t h e p l e a d e r , b e made by motion: ( 6 ) f a i l u r e t o s t a t e a claim upon which r e l i e f c a n be g r a n t e d . . . . . ." The B u l l o c k s a r g u e t h a t t h e i r c o m p l a i n t f o r damages s h o u l d n o t h a v e been d i s m i s s e d and r e l y on D u f f y v . T e a c h e r s ' Union No. P.2d 1199, where 332, AFL-CIO this ( 1 9 7 5 ) , 1 6 8 Mont. Court, speaking to a Butte 246, 541 motion to dismiss, stated: "A m o t i o n t o d i s m i s s f o r f a i l u r e t o s t a t e a c l a i m upon which r e l i e f c a n b e g r a n t e d , R u l e 1 2 ( b ) ( 6 ) , M.R.Civ.P., is equivalent t o a demurrer under former c i v i l procedure. A motion t o d i s m i s s [Citation omitted. ] a d m i t s t o a l l f a c t s w e l l p l e a d e d and i n c o n s i d e r i n g t h e motion t h e m a t e r i a l a l l e g a t i o n s of t h e p l e a d i n g a t t a c k e d a r e taken a s true. [ C i t a t i o n o m i t t e d . I Where a c o m p l a i n t s t a t e s f a c t s s u f f i c i e n t t o c o n s t i t u t e a cause o f a c t i o n upon a n y t h e o r y , t h e n t h e m o t i o n t o d i s m i s s m u s t be o v e r r u l e d . [ C i t a t i o n omitted.]" 1 6 8 Mont. a t 252-253, 5 4 1 P.2d a t 1202-1203. Defendants c i t e a l s o a s a u t h o r i t y t o t h i s holding B u t t r e l l v. McBri.de Land 407. Thus, P.2d and L i v e s t o c k ( 1 9 7 6 ) , 1 7 0 Mont. i n a r g u i n g a g a i n s t t h e d i s m i s s a l of c o u n t e r c l a i m below, t h e B u l l o c k s a r g u e tions must be made: first, all c o u n t e r c l a i m a r e assumed t r u e ; and 296, interpreted i n favor their t h a t c e r t a i n assump- set facts second, 553 forth in the a l l these f a c t s are t o be read of the Bullocks; and third, t h a t t h e g r a n t i n g of a motion t o d i s m i s s is held i n disfavor unless the allegations i n the counterclaim affirmat i v e l y d e m o n s t r a t e t h a t no a c t i o n l i e s and t h e m o t i o n s h o u l d be d e n i e d . Whether the Town's conduct is characterized as n e g l i g e n c e o r is c h a r a c t e r i z e d a s c o n t a i n i n g m i s r e p r e s e n t a t i o n s , w e f e e l makes l i t t l e d i f f e r e n c e . The e s s e n c e o f t h e c l a i m s i s t h a t t h e y w e r e m i s l e d by t h e c o n d u c t o f t h e Town to their disadvantage. This Court Adams v . Adams ( 1 9 7 9 ) , - Mont. St.Rep. has , held recently in 604 P.2d 332, 334, 36 2374, 2377, a s t o e q u i t a b l e e s t o p p e l : ". . . To i t e r a t e , f o r e q u i t a b l e e s t o p p e l t o e x i s t , t h e r e must be: (1) a f a l s e r e p r e s e n t a t i o n o r a c o n c e a l m e n t o f f a c t s , ( 2 ) made w i t h t h e knowledge, a c t u a l o r c o n s t r u c t i v e , o f t h e f a c t s , ( 3 ) t o a p a r t y w i t h o u t knowledge o r means o f knowledge o f t h e f a c t s , ( 4 ) w i t h t h e i n t e n t i o n t h a t i t s h o u l d b e a c t e d upon and ( 5 ) r e l i a n c e on t h e f a l s e r e p r e s e n t a t i o n t o h i s o r h e r p r e j u d i c e by t h e o t h e r . . ." The D i s t r i c t C o u r t d i d n o t e r r i n dismissing the counter- claim. Affirmed. / W concur: e

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