KEN NAYLOR RAE NAYLOR WARREN HANSON VALERIE HANSON WESLEY SHUEY JENNIFER MONTGOMERY MICHAEL McCANDLESS DEBORAH McCANDLESS BRYAN MANN ASHLEY MANN THOMAS HARSCH TERESA HARSCH BRETT BARTLETT ANDREW BROWN CARLTON CRIDER WILLIAM BRADLEY JENNIFER BRADLEY GABRIEL FLANSCHA SHERRI FLANSCHA ROBERT VARNEY TROY HOFFMAN DAVID SHREEVE WENDY SHREEVE CHRISTOPHER DIOS v. ROUNDUP MESA LANDOWNERS ASSOCIATION (2026)

¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, we decide this case by memorandum opinion. It shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court's quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.

¶2 Roundup Mesa Landowners Association (“RMLA”) appeals the Fourteenth Judicial District Court's order granting a preliminary injunction that prohibits it from collecting assessments and issuing liens on subdivision property. We reverse in part and remand for determination of the merits.

¶3 Roundup Mesa Subdivision (“Subdivision”) is a residential subdivision in Musselshell County. The Subdivision includes more than 70 lots and more than 10 miles of roads. Subdivision landowners, currently numbering over 60, are subject to a set of Covenants established by Rocky Mountain Timberlands, Inc., the grantor of all properties in the Subdivision at the time of its creation, and recorded in Musselshell County on November 27, 2000. The Covenants set forth that the conditions are “binding upon the present owners and all subsequent grantees of any portion of any area within the aforesaid legal description․ Grantees, [and] their successors ․ agree by the acceptance of conveyance to faithfully observe and comply with the following restrictions, conditions, covenants, and limitations.”

¶4 The Covenants provide in part that all landowners shall be assessed an annual fee for road maintenance and that RMLA “is totally responsible for providing and maintaining non-public roads.” RMLA also established Articles of Incorporation and By-Laws; the latter provide that any unpaid assessments are lienable against a landowner's lot within the Subdivision. Appellees (“Landowners”) are owners of various lots within the Subdivision.

¶5 In March 2025, Landowners notified RMLA of their withdrawal from the Association and their refusal to pay the assessment fees. RMLA subsequently recorded liens on the properties of the Landowners who did not pay the assessment fees.

¶6 Landowners followed with a complaint in District Court for declaratory and injunctive relief to prevent RMLA from levying assessment fees and pursuing liens against “non-members’ ” properties. Following a hearing, the District Court granted the preliminary injunction. The court ordered RMLA to file a release of liens recorded for the unpaid assessments in the Subdivision. RMLA released the liens. The District Court additionally relieved the Landowners of the obligation to pay assessment fees to RMLA during the pendency of the litigation.

¶7 We review “a district court's grant or denial of a preliminary injunction for a manifest abuse of discretion.” Montanans Against Irresponsible Densification, LLC v. State, 2024 MT 200, ¶ 8, 418 Mont. 78, 555 P.3d 759 (MAID) (citing Driscoll v. Stapleton, 2020 MT 247, ¶ 12, 401 Mont. 405, 473 P.3d 386). A manifest abuse of discretion is obvious, evident, or unmistakable. Davis v. Westphal, 2017 MT 276, ¶ 10, 389 Mont. 251, 405 P.3d 73 (citation omitted). “An injunction is an equitable remedy,” and it must be “fashioned according to the circumstances of a particular case.” Talley v. Flathead Valley Cmty. Coll., 259 Mont. 479, 491, 857 P.2d 701, 708 (1993). Thus, “an overbroad injunction is an abuse of discretion.” Simpkins v. Speck, 2019 MT 120, ¶ 19, 395 Mont. 509, 443 P.3d 428. Mixed questions of law and fact are reviewed de novo. Faber v. Raty, 2023 MT 227, ¶ 16, 414 Mont. 144, 539 P.3d 1096.

¶8 RMLA argues that the District Court failed adequately to analyze all four factors required for a preliminary injunction under § 27-19-201(1), MCA, and erred in concluding that Landowners proved a likelihood of success on the merits or any of the other factors. Landowners assert that the District Court did not commit a manifest abuse of discretion because the Covenants do not require membership in RMLA, they are not required to pay membership fees, and RMLA cannot issue liens against their properties. Landowners further argue that the Articles of Incorporation and By-Laws do not comply with recording requirements and are therefore ineffective to serve as an encumbrance against their properties.

¶9 A party must establish four elements to obtain a preliminary injunction under § 27-19-201(1), MCA:

(a) the applicant is likely to succeed on the merits;

(b) the applicant is likely to suffer irreparable harm in the absence of preliminary relief;

(c) the balance of equities tips in the applicant's favor; and

(d) the order is in the public interest.

“[T]he applicant for an injunction bears the burden of establishing the likelihood of each element ․” MAID, ¶ 12. A court should not issue a preliminary injunction that does not accomplish the court's limited purpose of minimizing harm to all parties. Davis, ¶ 24 (citing Porter v. K & S P'ship, 192 Mont. 175, 182, 627 P.2d 836, 840 (1981)).

Likelihood of Success on the Merits

¶10 An “applicant must present a prima facie case but need not show a certainty of winning[ ]” to establish a likelihood of success on the merits. Stephenson v. Lone Peak Preserve, LLC, 2025 MT 148, ¶ 24, 423 Mont. 46, 571 P.3d 1042 (internal quotations omitted) (quoting Cross v. State, 2024 MT 303, ¶ 33, 419 Mont. 290, 560 P.3d 637).

¶11 Although it found many questions left unanswered, the District Court concluded that, based on the testimony and the record, Landowners demonstrated a likelihood of success. It agreed with Landowners that the Covenants do not require membership in RMLA and found that the By-Laws and Articles of Incorporation do not reference a property description and are therefore incomplete.

¶12 RMLA argues that language in the Covenants grants it the authority to impose assessments on the Subdivision's lot holders regardless of Association membership. The Landowners respond that the failure of RMLA to identify membership in RMLA as mandatory prohibits RMLA from forcing non-members to pay assessments. Landowners also argue that any mention of mandatory membership in the Articles of Incorporation or By-Laws is insufficient due to improper recording.

¶13 This Court applies principles of contract interpretation when interpreting a restrictive covenant. Myers v. Kleinhans, 2024 MT 208, ¶ 9, 418 Mont. 113, 556 P.3d 529 (citation omitted). “The whole of a contract is to be taken together so as to give effect to every part if reasonably practicable, each clause helping to interpret the other.” Myers, ¶ 9 (quoting § 28-3-202, MCA).

¶14 Paragraph three of the Covenants sets forth in full that:

All future Grantees consent and agree that any roads giving access to this property are not maintained by Grantor. Roundup Mesa Landowners Association is totally responsible for providing and maintaining non-public roads. Owners association shall assess all landowners an annual fee for said maintenance. Until 80% of these tracts are sold, said annual amount shall be $100 per tract. After that the association will set its own fee amount. All future grantees covenant and agree that until such grantees have developed the access to their individual property to county standards that said grantees will not petition or request any assistance or development by the county for road improvements.

(Emphases added.) Landowners acknowledge that their properties are included in the properties legally described in Exhibit “A” to the Covenants. In their complaint, however, Landowners claim that because membership in RMLA is not mandated by the Covenants they cannot be compelled to pay fees, assessments, or annual dues. Landowners point to the lack of reference to membership and argue that RMLA's ability to levy assessments is limited to its members. But they do not explain why paragraph three of the Covenants does not confer RMLA with the ability to levy assessments against all lot holders. The Grantor identified all landowners in the Covenants, which undisputedly were properly recorded on Landowners’ properties. Paragraph three does not on its face limit the assessment to Association members.

¶15 Landowners’ reliance on Bordas v. Virginia City Ranches Ass'n, 2004 MT 342, 324 Mont. 263, 102 P.3d 1219, is misplaced. In Bordas, neither the Original Covenants, the Articles of Incorporation, nor the By-Laws made membership in the Association mandatory. Bordas, ¶ 23. The By-Laws provided that “[e]ach original owner ․ or subsequent purchaser ․ shall be eligible to belong to the Association. Upon payment of assessments levied by the Board of Directors ․ said owner or owners shall be considered paid members of the Association ․” Bordas, ¶ 17. The By-Laws made property owners eligible to become Association members, which this Court interpreted as permissive membership. Bordas, ¶¶ 15, 24. Thus, property owners that declined membership in the Association within the subdivision were not compelled to pay assessments. Bordas, ¶¶ 21-22. In the current case, the Covenants give RMLA the ability to assess fees to all Landowners without any mention of Association membership. Landowners do not address how their resignation from the Association impacts their status as a landowner within the terms of the Covenants or how those terms may distinguish this case from Bordas. They rely primarily on their dispute with the By-Laws and Articles of Incorporation. At this preliminary stage of the proceeding, however, when the parties dispute the efficacy of the Articles and By-Laws, we find it unnecessary to rely on their provisions in determining the propriety of the preliminary injunction.

¶16 Even without considering the By-Laws or Articles, paragraph three of the Covenants evidences RMLA's ability to assess fees to all lot holders for road maintenance. Landowners’ exclusive focus on the absence of a “membership” requirement fails to meaningfully address this point. Without opining on the ultimate merits of their claims, Cross, ¶ 12, we conclude that Landowners did not establish a likelihood of success on the merits because they did not adequately address the recorded Covenants that require assessment on every landowner within the Subdivision. At least insofar as the assessments are concerned, the District Court abused its discretion in holding to the contrary.

Irreparable Harm

¶17 Plaintiffs must show that irreparable injury is likely, not just speculative, without a preliminary injunction. MAID, ¶ 15 (citing Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22, 129 S. Ct. 365, 375 (2008)). In MAID, a group of homeowners filed a complaint seeking injunctive relief. MAID, ¶ 3. The homeowners challenged newly passed laws that required cities to permit the development of duplexes and other dwellings in single-family residence zones. MAID, ¶ 2. The homeowners testified to their fear of “a new duplex ․ going up next door in their previously peaceful and well-maintained single-family neighborhood.” MAID, ¶ 14.

¶18 The district court held that “any threat to the deprivation of fundamental rights” constituted an irreparable injury. MAID, ¶ 14. In line with Winter, this Court held that generalized fears and potential effects of the challenged laws were not enough to support a preliminary injunction. MAID, ¶ 19. This Court recognizes that “harm is irreparable if legal remedies, like an award for damages, are an inadequate remedy.” Cross, ¶ 47. “[E]conomic harm alone generally is not considered irreparable.” Cross, ¶ 47 (citation omitted).

¶19 In its preliminary injunction order, the District Court concluded that property liens “can quickly cause title problems and irreparable harm.” The District Court ordered RMLA to release liens placed on the Plaintiffs’ properties for unpaid assessments and allowed Landowners to continue avoiding the assessment fees. As noted, RMLA complied with the first directive. It does not develop an argument about the liens in its briefing or suggest an intent to reinstate its liens while the litigation proceeds.

¶20 RMLA contends that the Landowners’ alleged harm in paying the assessments is purely economic. RMLA further contends that Landowners’ remedy would be the recoupment of their expenditure of assessment fees. Landowners respond that they suffer irreparable harm by the threat of foreclosure proceedings against them rather than the harm of paying assessment fees.

¶21 At the preliminary injunction hearing, one Landowner testified that no foreclosure proceedings had been initiated against them. She acknowledged that the threat of a foreclosure proceeding could “probably” be alleviated by paying the assessment fee.

¶22 As RMLA correctly identifies, recoupment of Landowners’ payment of assessment fees is an economic harm and therefore not irreparable. Thus, the District Court's grant of a preliminary injunction was overbroad to the extent that it relieved Landowners of the responsibility to pay assessment fees. The District Court abused its discretion when it entered a preliminary injunction based on the possibility of future foreclosure on Landowners’ properties for failure to pay assessments.

Balance of Equities and the Public Interest

¶23 The third element of § 27-19-201(1), MCA, requires a party to establish that “the balance of equities” tips in their favor. The fourth element requires a party to establish that an order for a preliminary injunction is in the public interest. Section 27-19-201(1)(d), MCA. “In exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary remedy of injunction.” MAID, ¶ 21 (quoting Winter, 555 U.S. at 24, 129 S. Ct. at 376-77).

¶24 The District Court briefly concluded that, due to real property possessory interests and the requirement for particularity and property notice, the balance of equities tipped in the Landowners’ favor. The court found that the public's interest in accurate and clear real property records supported the final factor of a preliminary injunction. The District Court recognized, however, that precluding RMLA from collecting assessment fees would result in a diminution of value for all lots in the Subdivision.

¶25 RMLA argues that Landowners provided only vague statements of feared harm to support their claim to the balance of equities. RMLA contends that the balance of equities is in RMLA's favor because it is limited in the ability to fund repairs and because other, non-party, lot owners are burdened by Landowners’ refusal to pay assessment fees. RMLA also argues that Landowners did not provide evidence in support of the public interest factor and that the public interest favors RMLA and continued compliance with the contracted Covenants.

¶26 Landowners counter that because RMLA suffered no harm the balance of equities tips in their favor. Landowners cite to property recording statutes and claim a public interest in ensuring that property rights are not restricted by “improperly recorded instruments.” As stated above, the recording of the Articles of Incorporation and By-Laws is not material to the determination of the preliminary injunction. Accordingly, it does not lend support to the balance of equities or the public interest factors.

¶27 The District Court failed to consider in the balance of equities the Subdivision lot holders not part of this suit when it restricted RMLA from imposing assessment fees as authorized by the Covenants. Restricting RMLA from collecting assessments impedes the public interest in enforcing covenants and the ability to maintain roads and other infrastructure in Roundup Mesa Subdivision. The balance of equities and the public interest favor RMLA. The District Court abused its discretion when it found, on this record, that these factors weighed in favor of Landowners because of property interests and the need for clear property records.

¶28 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court abused its discretion when it found that Landowners established each required element for a preliminary injunction under § 27-19-201(1), MCA. We decline to disturb at this juncture the court's order directing release of the liens. The District Court's preliminary injunction is reversed to the extent that it relieves Landowners of the obligation to pay assessment fees during the pendency of this litigation. The matter is remanded for a merits determination of the Landowners’ claims on a more developed record.

BETH BAKER

We Concur: CORY J. SWANSON KATHERINE M. BIDEGARAY INGRID GUSTAFSON JIM RICE