Adams v. Bradshaw

• Decision Date: 07 November 1991
• Docket Number: No. 90-298,90-298
• Citation: 599 A.2d 481,135 N.H. 7
• Parties: Raymond ADAMS and another, v. Bernard BRADSHAW and another.
• Court: New Hampshire Supreme Court

Page 481

599 A.2d 481

135 N.H. 7

Raymond ADAMS and another, v. Bernard BRADSHAW and another.

No. 90-298.

Supreme Court of New Hampshire.

Nov. 7, 1991.

Law Office of Laurence F. Gardner, Lebanon (Laurence F. Gardner on the brief and orally), for plaintiffs.

Law Office of Edward M. Van Dorn, Jr., Woodsville (Edward M. Van Dorn on the defendants' joint brief and orally), for defendants, Bernard Bradshaw, Leslie Morrison, Robert Wormer, and the Town of Monroe.

Law Office of Kevin R. Bruno, Woodsville (Kevin R. Bruno on the defendants' joint brief), for defendants, Bernard Bradshaw, Leslie Morrison, Robert Wormer, and the Town of Monroe.

John P. Arnold, Atty. Gen. (Leslie J. Ludtke, Asst. Atty. Gen., on the brief), for the State, as amicus curiae.

New Hampshire Mun. Ass'n, Concord (H. Bernard Waugh, Jr., on the brief), as amicus curiae.

THAYER, Justice.

The defendants, the Town of Monroe (the Town) and its selectmen, appeal the Superior Court's (Smith, J.) determination that the Town's discontinuance of its sewer system constitutes inverse condemnation, requiring just compensation, and claim that the trial court erred in denying attorney's fees and in making certain factual findings. The plaintiffs, several property owners serviced by the sewer system, also appeal the court's decision, arguing that it erroneously allows the defendants to choose discontinuance of the sewer system over construction of a wastewater treatment plant. Moreover, the plaintiffs maintain that the trial court erred in ruling that the selectmen possessed sufficient authority to expend part of the Town capital reserve fund for the construction of septic systems to service Town-owned buildings. We reverse the trial court's finding of inverse condemnation, but affirm its denial of attorney's fees, as well as those decisions appealed by the plaintiffs.

Most of the relevant facts of this case are not in dispute. The Town built a sewer system in 1932 to service properties in its village area. In its present state, this system collects raw sewage from approximately fifty properties and spews it, untreated, into the Connecticut River. In 1971, the Town voted to establish a capital reserve fund for the purpose of constructing a sewage disposal unit, and voted several times thereafter to transfer tax revenue into this fund. Twice the Town hired engineers to study the feasibility of various sewage disposal options, but made no move to build a disposal unit. These engineers did not discuss construction of individual septic systems on the affected properties as an alternative to a type of wastewater treatment facility.

Meanwhile, the Town learned that its State and federal permits to pollute the Connecticut River would expire on July 1, 1988, and would not be renewed. In May 1987, the Town asked the State Water Supply and Pollution Control Division (the WSPCD) to determine the feasibility of individual septic systems in lieu of the Town's sewer. The WSPCD completed its study in August 1987, and informed the Town in mid-September that a wastewater treatment facility for the sewer could not be designed and constructed in time to meet the State and federal July 1, 1988, deadline.

Thus, the defendants turned to subsurface disposal options. At a special town meeting in November 1987, the Town voted to hire engineers "to design individual on-site subsurface disposal systems for the present users of the Monroe Town Sewer System," and to pay for their services out of the Town's capital reserve fund, which at that time totalled approximately $200,000. The engineers completed their study, and in March 1988, the Town passed the following articles:

"17. To see if the Town will vote to change the purpose of the existing Sewer Disposal Unit Capital Reserve Fund to one with the purpose of designing and constructing a sewage disposal system or systems for the Monroe Village Sewer System that complies with Federal and State Law and Regulations.

. . . . .

19. To see if the Town will vote to designate the Board of Selectmen as agents to expend the Captial [sic] Reserve Fund for the purpose for which said fund was established."

The July 1, 1988, deadline arrived, but the Town continued to operate its sewer in violation of State and federal law. As a result, the State sued the Town. The plaintiffs also sued the Town, and the selectmen individually. In their petition for declaratory judgment and bill in equity, the plaintiffs claimed a vested property right in the Town sewer and declared illegal the Town's plans to discontinue the sewer. Among other things, the plaintiffs requested that the superior court order the selectmen to "offer to the voters of the Town the alternatives available for sewage treatment, which would be in the long-range best interest of the Village and the Town."

In February 1989, before the trial court took any action on the petition, the Town held a special meeting to determine the fate of the Town sewer, and to decide what, if anything, it should do to help the village property owners dispose of their sewage. A majority of the Town citizens voted to completely abandon the Town sewer and leave the village property owners to their own devices. The townspeople also passed Article 5, allowing the Town to construct individual subsurface disposal systems for Town-owned buildings located in the village area. The plaintiffs moved to amend their petition soon afterward to challenge the actions taken at the February town meeting and requested the trial court to:

"order the Defendants not to expend money for the purposes set forth in Article 5 as voted on February 10, 1989 for the lack of a valid appropriation and valid vote to withdraw funds from the capital reserve fund ...[;] enter an order preventing the abandonment of the village sewer system ...

[; and]

enter an order compelling the Town to construct a wastewater treatment plant in compliance with State and federal requirements and that the cost of the plant be paid by the Town and the users charged for operation and maintenance."

In April 1989, the Town and the State entered into a consent decree in the State's lawsuit against the Town. The decree gave the Town a new deadline of October 15, 1989, for ending its discharge of raw sewage into the river. Several property owners in the village area constructed septic systems during the ensuing months and ceased utilization of the Town sewer. But by the time of the superior court's order in this case, the sewer was still in operation, and was still pumping untreated sewage into the river.

The superior court, by order dated March 13, 1990, ruled that both the expenditure of money from the capital reserve fund and the vote to discontinue the Town sewer were legal. In addition, the court ruled that neither party was guilty of bad faith and that, therefore, neither was entitled to attorney's fees. The court went on, however, to rule that discontinuance of the sewer constitutes inverse condemnation, requiring just compensation by the Town, and enjoined discontinuance of the sewer pending any appeal or suit by the individual property owners for just compensation. Pursuant to its ruling of inverse condemnation, the court found that three properties located in the village area are incapable of sustaining on-site septic systems. Both parties appealed.

Before this court, the defendants argue that the plaintiffs have no vested property right in the sewer system, and that the trial court, therefore, erred in ruling that discontinuance of the sewer constitutes inverse condemnation. In addition, the defendants maintain that the superior court erred in denying them an award of attorney's fees, because the plaintiffs' suit against the selectmen as individuals acting in bad faith had no reasonable basis in fact. The defendants' other arguments on appeal are made moot by our decision in their favor on the first issue and are not addressed.

The plaintiffs, in turn, allege three trial court errors. First, the plaintiffs argue that the Town had no authority to stop providing them with a sewer service. Second, they argue that the Town's decision to discontinue the Town sewer, rather than construct a wastewater treatment facility, was arbitrary and unreasonable, in violation of part I, article 12 of the New Hampshire Constitution. Third, the plaintiffs claim that the selectmen's withdrawal of money from the capital reserve fund to construct on-site septic systems for Town buildings violated RSA chapter 35. We dismiss all three arguments.

We first address the plaintiffs' argument that the Town had no authority to discontinue its sewer service to the residents of the village area. The plaintiffs state in their brief that "[t]here is nothing in RSA Chapter 149-I which indicates directly or indirectly that a city or town would abandon a sewer system that had previously been installed," and that, therefore, "[o]nce a town has chosen to provide a town sewer system, the town cannot withdraw that essential service because of water pollution but, rather, ... must take the necessary steps to abate the water pollution."

We disagree. RSA 149-I:1 grants municipalities the authority to "construct and maintain" sewers and declares that a sewer constructed by a municipality "shall be the property of the [municipality]." Thus, "[a] sewerage system constructed by a municipal corporation is its property and its right to regulate and control the use of it is a necessary incident of its ownership." Mitchel v. Dover, 98 N.H. 285, 289, 99 A.2d 409, 412 (1953).

Concomitant with the right to regulate and control one's property is the right to dispose of it as one sees fit, and no statutory language is needed to support this self-evident principle. "Courts generally regard public sewers and drains as the property of the municipal corporations in which they are built, and they may be protected and controlled as any other property of the municipality, and no private person has...