Missoula County settles old subdivision lawsuit for $2.2 million

Missoula County will pay a group of landowners $2.2 million to settle a lawsuit over a failed subdivision in Grant Creek, ending a legal battle that dates back several years.

Under the settlement, announced Thursday, the county must issue its first payment of $1.2 million within 90 days while the second payment is due within two years.

“We have a settlement that was entered into between the county and the owners of land that failed in the 1980s Gleneagle Subdivision,” said Andrew Czorny, the county's chief financial officer. “We'll issue a judgment levy bond for five years to pay the settlement costs, which are due in 90 days. We're going back and forth with the bank on interest rates, but that'll be 1.05 mills.”

Trouble in the Gleneagle Subdivision, located in lower Grant Creek, began in the late 1970s and spiraled downhill from there. The county received the lots through a tax deed in 1989 and proceeded to engineer and plan a new project.

The county reduced the 67 lots to roughly 25 and re-deeded them in an agreement reached with two developers in 1999. But the subdivision never broke ground and no infrastructure was ever laid, leaving the buyers empty handed.

“The landowners couldn't look to (the developer) for the $2.4 million they invested, so they sued Missoula County,” Steve Carey, who is representing the county in the case, said Thursday. “No one works at the county now that had anything to do with that agreement in 1999.”

Retired District Judge Ed McLean ruled last year that the county had violated the Montana Subdivision and Platting Act by failing to require an infrastructure bond with the 1999 agreement.

During the hearing, attorney David Cotner, representing the buyers, said his clients had lost $2 million in their purchase of lots. Under the agreement announced Thursday, the county will pay the landowners $2.2 million collectively, and receive the lots back in return.

Commissioners wouldn't say Thursday what they would do with the lots, stating that a separate lawsuit remains open.

Andrew Czorny, the county's chief financial officer, said the first payment of $1.26 million is due within 90 days. It will be paid with insurance and an additional 1.05 mills, which the county will levy over the next five years.

The second payment is due within two years, Czorny said. The payment method for the remaining amount will be considered in the county's Fiscal Year 2020 budget.

Carey said the county is contesting a separate lawsuit involving Gleneagle developer Mark Denton.

“We'll continue to defend against Mr. Denton's case,” said Carey, adding that the future of the other lots returned to the county will remain a “work in progress.”

“There's a lot of things that need to fall into place,” Carey said. “Hopefully someday the county will recover some money from those lots.”