City of Clearwater v. Bonsey
| Decision Date | 16 November 1965 |
| Docket Number | No. 5203,5203 |
| Parties | CITY OF CLEARWATER, a Municipal Corporation, Appellant, v. John W. BONSEY, A. L. Anderson, Robert L. Davis, Lloyd B. Hopkins and Robert A. Freeze, as the County Commissioners of Pinellas County, Florida, Appellees. |
| Court | Florida District Court of Appeals |
Herbert M. Brown, Norris S. Gould, Clearwater, and Howard P. Macfarlane, Arthur A. Simpson and Wm. Terrell Hodges, of Macfarlane, Ferguson, Allison & Kelly, Tampa, for appellant.
Page S. Jackson and Julian R. Howay, Clearwater, for appellees.
This is an appeal by the City of Clearwater from a summary judgment in a declaratory decree action brought by the County Commissioners of Pinellas County. The issue is the validity of a thirty year contract between the County and the City under which the County is to sell water to the City at a specified rate in return for the City's obligation to pay for a fixed daily minimum quantity of water whether actually consumed or not. The lower court granted summary judgment in favor of the County, holding that the provision fixing the rate was in derogation of the duty imposed on the County to prescribe and revise rates whenever necessary.
By virtue of a Special Act of the Florida Legislature (Ch. 29442, Laws of Florida, Special Acts of 1953), Pinellas County was empowered to enlarge its water supply and distribution system. Pursuant to the 'power to contract * * * with respect to such undertaking' Pinellas County and the City of Clearwater entered an agreement, the salient portions fo which provided that Pinellas County was to supply water to Clearwater for a period of thirty years at the rate of 5 cents per thousand gallos. Water so supplied was to be a supplement to the City's own system. The City agreed to pay the County for a minimum quantity of four million gallons a day whether or not that much was consumed. Amounts actually used by the City over the minimum and up to a daily maximum of ten million gallons were to be charged at the contract price. In addition, the contract provided for a review of the 5 cent rate at the end of any year's billing should the cost of electric power to the County increase or decrease, and that a rate reduction might be effectuated should the City's consumption of County water reach a daily average of five and one-half million gallons. The contract also contained a general clause that the parties might, in the event of unforeseen developments, agree to ament its terms in the future. Both sides have performed under the contract since 1954. The current rate is 5 1/2 cents per thousant gallons, resulting from a 1/2 cent rent increase caused by an increased cost in electric power to the County .
In May, 1963, the Pinellas County Commission passed a resolution declaring that the cost of furnishing water to Clearwater was then 18 cents per thousand gallons, and that this would be the new rate charged if the contract rate could be disregarded. Consequently, the County filed this suit, seeking adjudication of its rights and obligations, if any, under its existing contract with Clearwater.
The action filed by the County was a suit for a declaratory decree. The compaint set forth the contract provisions regarding the 5cents rate for the thirty year period, and then quoted the material portions of the Special Act empowering the County to fix rates and revise them from time to time whenever necessary. The relevant portions of the Act provided:
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'(4) To prescribe, fix, establish and collect fees, rentals or other charges for the facilities and services furnished by such water system, or any part thereof, either heretofore or hereafter constructed or acquired on an equitable basis; provided, however, that such fees, rentals or other charges, or any revision thereof, shall be fixed and established by Resolution of the Board of County Commissioners in said County.
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'(4) The fixing, establishing and collection of such fees, rentals or other charges for the use of the services and facilities of such water system, including any part thereof heretofore or hereafter constructed or acquired, and the revision of same from time to time, as will always provide revenues at least sufficient to provide for all expenses of operation, maintenance and repair of such undertakings, the payment of the principal of and interest on all bonds or other obligations payable from the revenues of such undertakings, and all reserve and other funds required by the terms of the resolution or resolutions authorizing the issuance of such bonds.
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The complaint further alleged that the County had determined it was necessary to revise the Pinellas County water rates so that municipalities not be charged less for water than the cost to the County, and that the Commission determined the cost of furnishing water to Clearwater to be 18cents per thousand gallons. The prayer of the complaint was that the court decide whether the Clearwater contract bound the County to furnish water at the 5 cent rate during the contract term, and prevented the Board from exercising its discretion with respect to rates as specified in the Special Act.
The City responded to the complaint by filing a motion to dismiss, which the trial judge denied. Subsequently the City filed an answer, incorporating an affirmative defense and a motion to dismiss. The City specifically denied that the actual cost of furnishing water was 18cents per thousand gallons and averred that the contract was binding on the parties and was not in violation of the Special Act. By way of affirmative defense, the City alleged that the County had full knowledge of all matters alleged in the complaint prior to entering the contract and that the County had acted in pursuance of and acknowledged all sums due from the City, and had derived all possible benefit from the contract; that the County used the contract to obtain court authority to issue bonds and extend its water system; that the City had relied on the contract to the prejudice of its own water system; and that the County had delayed any right of rescission to the material prejudice of the City.
Both parties moved for summary judgment, and the Court granted the County's motion and entered summary judgment for the plaintiffs.
In his order the trial judge found 'that the contract between Pinellas...
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