Over Objections from Carlyle, Court Accepts City’s Request to Withdraw Appeal



A District Court judge on Saturday accepted the city of Missoula’s motion to withdraw its valuation appeal in the Mountain Water Co. case, despite objections from The Carlyle Group.

Earlier this week, the city had asked to withdraw its appeal after District Judge Karen Townsend ruled that a $22 million obligation owed to developers by Mountain Water, owned by Carlyle, will remain the company’s responsibility.

The court’s ruling on who will pay the obligation prompted the city to withdraw its appeal – an action the court approved in Saturday’s decision.

In a motion to the court, however, Carlyle and Mountain Water accused the city of abandoning the valuation process by withdrawing its appeal, thus making the $88.6 million price set by a water commission in November invalid.

Townsend disagreed, saying Carlyle and Mountain Water had failed to legally justify their argument claiming the value had become invalid.

Carlyle and Mountain Water also argued that if the court permitted the city to withdraw its appeal, then they should get a second chance to decide if they wanted to appeal valuation.

Townsend disagreed on that claim as well. In her ruling, she found that Carlyle and Mountain Water had not offered sufficient fact to reset the appeal clock. The two parties failed to submit an initial appeal when they had the chance last month.

“The court does not find there is any factual basis for attributing malicious intent or gamesmanship to the city, or that (Carlyle and Mountain Water) were snookered by the city’s filing of its notice of appeal,” Townsend wrote.

Carlyle and Mountain water further contend that they were prejudiced by the city’s move to withdraw its appeal because they had prepared for a jury trial. The trail was set to begin on Monday but has since been cancelled.

“The court will consider the expenses incurred by (Carlyle and Mountain Water) for trail preparation when it addresses attorney’s fees,” Townsend ruled.

Townsend has scheduled a status conference on Monday to discuss further scheduling the case.

In a press conference held Friday, Missoula Mayor John Engen said the city was prepared to take ownership of the utility.

“Our hope is that (Carlyle and Mountain Water) will be interested in consummating this deal as quickly as possible,” Engen said. “They did not appeal the (water) commission’s ruling. My sense of things is that Carlyle has wanted to sell the utility, and we want to buy it. We’ve accepted the terms of the valuation commission.”