MISSOULA -- The city of Missoula fouled up when it allowed people to build houses on lots smaller than zoning allowed, a Missoula County district judge ruled earlier this month.

And the lead plaintiff -- then a member of the Missoula City Council -- was right in taking on City Hall in a contentious lawsuit, the decision says.

"We did have to bite the bullet and try to protect the citizens in zoning throughout the whole community," Jerry Ballas said Tuesday of himself and his wife, Michele Ballas, plaintiffs in the suit.

As defendants, the lawsuit named the City Board of Adjustment, Office of Planning and Grants, city of Missoula, as well as the Terzo family, whose property sits next door to the Ballases'.

City Attorney Jim Nugent said Wednesday he had not yet read the opinion, but the ruling is a moot point. On its own, the city changed its rules several years ago anyway. Nugent, however, said the city wasn't admitting it erred when it allowed the practice.

Nugent also said the city hadn't determined whether to appeal. Outside the halls of justice, neighborhood relations are strained and are likely to remain tense until the Terzos leave for England in a couple of weeks.

In 2003, the city was still using a controversial policy to promote infill, a practice of putting new homes in urban areas. In some established neighborhoods, people had built houses that technically straddled one end of two long, narrow lots platted early in Missoula's history.

A few years ago, people who wanted to build second houses on their property asked the city to move the imaginary line between the two lots 90 degrees. That put the home on its own single lot and created an empty lot on which to build.

Those lots weren't technically big enough for houses, though they didn't meet zoning requirements. But the city argued the lots were grandfathered in, and when the Terzos applied to move a boundary line and build on their property, the city gave them a green light.

In the decision issued Aug. 20, Judge James Haynes said the city erred. He described its "unlegislated" infill policy as "improper." He also scolded the city for using lot line adjustments to circumvent its own zoning. He didn't place blame on the Board of Adjustment, however, saying the city misguided the body.

In his ruling, Judge Haynes said the city owes Ballas attorney fees and praised him for taking on the fight: "Plaintiff Ballas undertook a lead role in a public and controversial issue by opposing the City's unlegislated infill policy. Plaintiff Ballas did so while Jerry Ballas served as a Missoula City Council member, in disagreement with a longstanding legal opinion issued by the Missoula City Attorney's office which endorsed the unlegislated infill policy.

"In light of the City's official position promoting the infill policy, a private challenge and enforcement by Plaintiff Ballas was necessary and of general benefit to all Missoula citizens, including those who reside within zoned areas."

The Terzos don't see it that way, though. Jake Terzo is originally from Missoula and the couple moved back about five years ago.

He said he's built exactly what he'd planned to build and exactly what he'd described to Ballas early on. He added onto a new house he was building, removed an older house, and built a garage and yard. Early on, Terzo said Ballas praised his plans.

"He said, 'I'm excited to see something happen there,' " Terzo said.

Then, after the couple committed time and money to the project, Ballas began his protest and filed the lawsuit, Terzo said. And he said the next time his neighbor approached, Ballas served Terzo with the lawsuit. He wonders why Ballas didn't first approach him in person, neighbor to neighbor, with his concerns.

"My only conclusion at the time and still is is that he actually wanted that to happen. He wanted me to (proceed) so that he could bring his lawsuit and gain a claim for whatever constituency he was seeking to please at the time. I don't know why he would not have said something like that if he really didn't want it to happen," Terzo said.

Meanwhile, Beth Terzo said the argument people used to try to stop their project that the house wouldn't be appropriate for the neighborhood isn't holding water.

"It's been amazing the number of people who have approached us and said it's a great house and it fits in the neighborhood much better than your neighbor's does. It's just a little ironic there," Beth Terzo said.

The Terzos said the fight is now between the city and the Ballases. If the city appeals the decision, they believe it will prevail, in part because Judge Haynes overstepped his bounds. Jake Terzo said the judge threw out some of the plaintiff's claims at one point and inserted some of his own -- "highly unusual for a judge to do," Jake Terzo said.

Rick Baskett, attorney for the Ballases, said he hasn't finished tallying fees the ones the judge said the city must pay. He estimated they'll be less than $100,000, but high nonetheless.

"I'd hate to put a number on it right now, but it's going to be substantial," Baskett said.