Broadmoor/Timberline Apartments v. Public Service Com'n of West Virginia

• Decision Date: 21 December 1988
• Docket Number: No. 18533,18533
• Citation: 180 W.Va. 387,376 S.E.2d 593
• Court: West Virginia Supreme Court
• Parties: BROADMOOR/TIMBERLINE APARTMENTS v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA, Frank Volk, and the City of Morgantown.

Page 593

376 S.E.2d 593

180 W.Va. 387

BROADMOOR/TIMBERLINE APARTMENTS v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA, Frank Volk, and the City of Morgantown.

No. 18533.

Supreme Court of Appeals of West Virginia.

Dec. 21, 1988.

Syllabus by the Court

1. " '[A]n order of the public service commission based upon its finding of facts will not be disturbed unless such finding is contrary to the evidence, or is without evidence to support it, or is arbitrary, or results from a misapplication of legal principles.' United Fuel Gas Company v. The Public Service Commission, 143 W.Va. 33 [99 S.E.2d 1 (1957) ]." Syllabus Point 5, in part, Boggs v. Public Service Comm'n, 154 W.Va. 146, 174 S.E.2d 331 (1970).

2. "The public service commission has the statutory power and authority to control the facilities, charges and services of all public utilities and to hear and determine the complaints of persons entitled to the services which such utilities afford; and the only limitation upon such power and authority is that the requirements shall not be contrary to law and that they shall be just and fair, just and reasonable, and just and proper." Syllabus Point 6, State ex rel. City of Wheeling v. Renick, 145 W.Va. 640, 116 S.E.2d 763 (1960).

3. An order of the public service commission will not be reversed at the behest of the owner of an apartment complex, whose sewer lines are ordered to be acquired by a public utility under the following conditions: (1) the public service commission has found the utility is already providing sewer service with the approval of the landlord to tenants of the complex, which service is separately billed; (2) the public service commission has found that the landlord has previously allowed third parties outside the apartment complex to tap on and receive the utility's sewer service; (3) the public service commission has found that the acquisition of the sewer lines is necessary to provide extension of the utility's sewer service to other parties and will enable the utility to adequately inspect and maintain the acquired lines; (4) the public service commission has required the utility to pay the landlord the value of the acquired lines either through a negotiated price or through eminent domain; and (5) the utility has participated in the case and raises no objection to the order.

John S. Dalporto, Thomas H. Newbraugh, Fusco & Newbraugh, Morgantown, for Broadmoor/Timberline Apartments.

William F. Byrne, Morgantown, for Volk.

Kenneth E. Kincaid, Morgantown, for Town of Morgantown.

Mary C. Wright, Legal Div., PSC, Charleston, for the PSC of West Virginia.

MILLER, Justice:

The question presented is: Whether private sewer lines that transport waste from public utility customers into the utility's sewer system are subject to the jurisdiction of the public service commission (PSC).

I.

Broadmoor/Timberline Apartments (Broadmoor) ¹ is a private apartment complex situate less than one mile outside of the City of Morgantown. In the early 1970s, as part of an expansion of its facilities, Broadmoor constructed a system of manholes and sewer lines to service the complex. This system transports waste from individual apartments via a series of 8-inch sewer lines. These lines ultimately join the Morgantown municipal sewer system at a point beyond the Broadmoor property. Since the lines were completed, Broadmoor has borne full responsibility for their repair and maintenance. ²

There are 274 tenants at the Broadmoor complex. Each of the tenants is individually billed by the city, at its tariff rate, for sewer service. Sewer charges are a function of water consumption, which is metered at each of the apartments.

Frank Volk, the complainant, is the owner of an undeveloped tract of land substantially surrounded by the Broadmoor complex. ³ For over twelve years, Mr. Volk has attempted unsuccessfully to obtain Broadmoor's consent to tap onto its sewer lines. It appears that the principal reason for the impasse is Mr. Volk's refusal to reveal his contemplated use for the tract. Without the tap, Mr. Volk is unable to economically obtain any sewer service. ⁴

In 1984, Mr. Volk filed a complaint with the PSC to compel Broadmoor to permit him to tap onto its sewer lines. ⁵ After inquiry by the PSC staff, it was determined that the lines did not service more than twenty-five persons other than Broadmoor and that the PSC, therefore, lacked jurisdiction. ⁶ . The administrative law judge thereupon dismissed the complaint.

On June 1, 1987, Mr. Volk filed a second complaint against Broadmoor. It averred, in part, that Broadmoor "function[ed] as a sewer system" and that Mr. Volk had been "consistently ... denied access to the sewer system and therefore [had] no sewer outlet." Broadmoor answered the complaint on June 26, 1987. Numerous defenses were raised by Broadmoor, including lack of jurisdiction and res judicata. The City of Morgantown was joined by the PSC as a party defendant by order dated September 21, 1987.

A hearing in the case was held before an administrative law judge on October 22, 1987. In a decision entered on December 23, 1987, the administrative law judge ruled that Mr. Volk was bound by the prior determination that Broadmoor was not a public utility. He further ruled, however, that Broadmoor's sewer lines were de facto a part of the Morgantown municipal sewer system and that Broadmoor had unlawfully interposed itself between the city and its sewer customers. His order directed the city to obtain Broadmoor's lines and all appurtenant rights of way by negotiation or, if necessary, by eminent domain. He also determined, as a fact, that it was reasonable to permit Mr. Volk to tap onto the Broadmoor lines. The PSC staff was to monitor compliance with the order.

Broadmoor timely filed exceptions to the decision. The PSC affirmed in an order and opinion dated April 15, 1988, and determined that the decision was "reasonable and in the public interest."

II.

We discuss preliminarily two procedural issues. Broadmoor asserts that the decision rendered as to Mr. Volk's prior complaint is res judicata. In the alternative, Broadmoor contends that the PSC lacked jurisdiction in the case.

A.

Broadmoor asserts that Mr. Volk's complaint is barred by principles of res judicata. It is, of course, an essential element of res judicata that there must have been a prior adjudication of the case on the merits. We summarized this rule in Syllabus Point 6 of Johnson v. Huntington Moving & Storage, Inc., 160 W.Va. 796, 239 S.E.2d 128 (1977):

"Before the principles of res judicata can be involved, there must have been an adjudication on the merits of a case."

See also Nickey v. Grittner, 171 W.Va. 35, 297 S.E.2d 441 (1982); Rife v. Woolfolk, 169 W.Va. 660, 289 S.E.2d 220 (1982).

Quite obviously, the disposition of Mr. Volk's 1984 complaint was not an adjudication on the merits. The sole determination made by the PSC staff, and by the administrative law judge, was that the PSC lacked jurisdiction over Broadmoor as a public utility. This did not reach the merits of Mr. Volk's complaint that he was unreasonably denied the opportunity to tap onto Broadmoor's sewer lines. We thus find that res judicata does not bar Mr. Volk's complaint of June 1, 1987.

B.

As pointed out in note 6, supra, W.Va.Code, 24-2-1, limits the jurisdiction of the PSC to those sewer systems that provide service to "twenty-five or more persons or firms other than the owner" of the sewer system. Broadmoor points out that its sewer system services its tenants, and not the public. Where sewer service is provided exclusively to tenants, Broadmoor asserts that the provider is not subject to PSC jurisdiction.

There is authority to support Broadmoor's proposition when the attempt is made to force the landlord into public utility status. We acknowledged this law in Holdred Collieries v. Boone County Coal Corp., 97 W.Va. 109, 124 S.E. 493 (1924), where the defendant, a coal company, leased sizeable coal tracts to Holdred and others. Under its lease, the company was required to install and operate a power plant and to deliver electric power at a fixed price to a coal mine operated by Holdred. Subsequently, the company made arrangements to have the electric power supplied by a local public utility and dismantled its generating facility. The public utility's rates were higher than the rates specified in the lease. As a consequence, Holdred sued and claimed damages for the extra cost of the power. The company contended that its contractual obligation to supply power made it a public utility and that its rates were subject to PSC control.

This Court, without any extensive discussion of the matter, concluded that company was not a public utility, and pointed to the private nature of the contract and the fact that power was provided only to tenants. The Court also noted that the lease had been executed before the PSC had been created. Clearly, the fact situation in Holdred heavily influenced the decision. The power plant was built by the company and was used solely to deliver power to its tenants.

This point was emphasized by the Court in Holdred in distinguishing its earlier case of Wingrove v. Public Serv. Comm'n, 74 W.Va. 190, 81 S.E. 734 (1914). There, electric power was supplied by a coal company to its mine and tenant houses and also to some adjacent businesses not owned by the company. Additional businesses sought to obtain electric power, but the PSC refused relief. This Court reversed and held that the company was a public utility since it met the statutory definition of a public service corporation.

Although this issue does not frequently arise, Holdred is consistent with a majority of those cases that have considered the question. A landlord who provides utility services to its tenants, and not to the public, is generally not deemed to be a public utility. Annot., 75 A.L.R.3d 1204 (1977).

There are, however, several features of this case that...