City of Harrisonville v. Public Water Supply District No. 9, 9
| Citation | 49 S.W.3d 225 |
| Decision Date | 29 June 2001 |
| Docket Number | No. 9,9 |
| Parties | (Mo.App. S.D. 2001) City of Harrisonville, Missouri, Appellant/Respondent v. Public Water Supply Districtof Cass County, Missouri, Respondent/Appellant. WD58748 & WD58762 0 |
| Court | Court of Appeal of Missouri (US) |
Appeal From: Circuit Court of Cass County, Hon. Joseph P. Dandurand
Counsel for Appellant: Steven E. Mauer and Michael D. Pospisil
Counsel for Respondent: Elvin S. Douglas, Jr.
Opinion Summary: The City of Harrisonville appeals the court's judgment interpreting a contract between the City and Public Water Supply District No. 9 of Harrisonville concerning the provision of water service to present and future customers in annexed territory within the District's service area. The District also appeals. The City argues the court erred in interpreting the agreement to allow the City to elect to provide water service only to specific customers and not annexed territory. It argues the plain and unambiguous terms of the agreement -- in light of the applicable law at the time the agreement was executed and the parties' actions regarding the same issue in previous litigation -- reveal the City would be entitled to elect to provide water service to all territory within its annexed boundaries. The City argues that if it were allowed to elect to provide water service only to individual customers, express provisions of the agreement would be nullified and rendered useless.
The District contends the court erred in holding that the twenty-year contract between the City and the District continued uninterrupted between 1974, when it initially was executed, and April 9, 1999, when it was terminated, because (1) the parties specifically stipulated that the 1974 contract was "renewed for a term of 20 years from the date of this stipulation," subject to cancellation on one year's notice; (2) the court held in 1996 that the City had wrongfully terminated the contract in its anticipatory breach; and (3) the 1974 contract provision only related to customers thereafter annexed.
Division Two holds: The trial court did not err in holding that under the 1974 agreement, the City may only provide water service to those customers being served by the District at the time of annexation, rather than to the whole annexed territory. The agreement's clear and unambiguous terms support the trial court's holding, and no statutes or case law void those terms. Evidence of the parties' settlement negotiations in previous litigation is not admissible to determine the parties' intent in entering the agreement, because the agreement itself is unambiguous.
The trial court did not err in holding that the 1974 twenty-year agreement continued uninterrupted between 1974 and April 9, 1999. The plain language of the 1996 stipulation indicates that the original agreement was renewed and remained in full force and effect.
The City of Harrisonville ("the City") appeals from the trial court's judgment interpreting a contract between the City and Public Water Supply District No. 9 of Harrisonville, Missouri ("the District") concerning the provision of water service to present and future customers in annexed territory within the District's service area. The District also appeals from the trial court's judgment. The City's sole point on appeal is that the trial court erred in interpreting the agreement to allow the City to elect to provide water service only to specific customers and not annexed territory because the plain and unambiguous terms of the agreement in light of the applicable law at the time the agreement was executed, along with the parties' actions regarding the same issue in previous litigation, reveal the City would be entitled to elect to provide water service to all territory within its annexed boundaries in that if the City were allowed to elect to provide water service only to individual customers, express provisions of the agreement would be nullified and rendered useless. The District's sole point on appeal is that the trial court erred in holding that the 1974 twenty-year contract between the City and the District continued uninterrupted between 1974, the date the contract was initially executed, and April 9, 1999, the date of the termination of the contract, because the Stipulation of the parties specifically provided that the 1974 contract was "renewed for a term of 20 years from the date of this stipulation," subject to cancellation on one year's notice; further, the court had previously held in 1996 that the City had wrongfully terminated the contract in its anticipatory breach; and further, the contract provision in the 1974 contract only related to customers thereafter annexed.
We affirm.
This appeal concerns a municipality's ability to provide water service to future residents and customers located within its municipal boundaries. The dispute before the court involves two public entities. Appellant/Cross-Respondent City of Harrisonville, Missouri is a municipality incorporated under the laws of the State of Missouri and is located in Cass County, Missouri. Respondent/Cross-Appellant Public Water Supply District No. 9 of Cass County, Missouri is a public water supply district created under Chapter 247 of the Missouri Revised Statutes, serving certain portions of Cass County, Missouri. The dispute stems from the trial court's interpretation of an agreement ("Agreement") executed by the parties in 1974, which was renewed as part of a litigation settlement between the City and the District.
On October 8, 1974, the City and the District entered into an Agreement whereby the City agreed to sell water to the District. Section 14 of the Agreement provides as follows:
It is further the agreement of the parties that the parties recognize that from time to time City may, by normal growth and expansion, annex certain territories adjacent to their present or future boundaries, and within the corporate limits of City. As a condition of the purchase of the water hereunder, and in order to protect each of the parties equitably for such annexed territory, in the event of such annexation the following shall be applicable:
A. City may authorize water District to continue to provide service to the customers then being served by District within such annexed territory for such period of time as City may elect.
B. City at its option may elect to provide service to such customers within the District within the annexed territory and in such event, District shall have the right to remove the meter and disconnect service to such customer, and such equipment shall not be considered in costs to be reimbursed as hereafter provided.
C. In the event such area is annexed, and as a result of service being provided by City under the foregoing election, lines of the water District previously constructed shall be useless to District, and no further service continued to be provided to other customers of the District. Then and in such event, City shall reimburse District the cost of such line construction rendered useless by City's commencement of providing water service to the customers previously served by District, less depreciation amortized over a 33-1/3 year life, which amount shall be paid by City in cash to the District at or prior to the time of withdrawal of District's water meters from such customers. A copy of the construction contract showing unit costs of construction, together with all addendum thereto, shall be filed with the City Clerk upon execution, and such contracts shall form the basis for determining costs hereunder.
In such event, the City shall notify the Secretary of the District of its election to serve such customers, and in the event any such customers should render useless any portion of the District's distribution system, District shall within thirty (30) days thereafter notify City of such, the cost of such improvements and the depreciation accrued in accordance with the foregoing formula and its claim for payment with the effective date of City's commencement of service.
D. Except for those portions of District's distribution system made useless by such annexations, and the commencement of service by City to customers within such annexed area in accordance with the preceding paragraphs, such payment shall be in lieu of all other obligations to District for payment of compensation by reason of the annexation of such territory and the commencement of service to the residents within such annexed territory, and District does waive and relinquish any other claims it may have for reimbursement except as are specifically provided for herein.
Although the Agreement was for a period of twenty years, the parties chose to amend its provisions on June 3, 1976. The amendments made to the Agreement did not affect Section 14 and, as such, that provision and all other unaltered provisions were to "remain in full force and effect." Similarly, the Agreement was amended once again on June 17, 1981, with no alterations or changes being made to Section 14.
Following the execution of the Agreement and its two amendments, the District filed suit against the City, claiming the City had breached portions of the Agreement including, but not limited to, the requirement that the City sell water to the District. In an attempt to settle that litigation, the parties negotiated for a Stipulation for Settlement ("Stipulation") under which the Agreement would be renewed for a term of twenty years. The Stipulation provided that "the terms and conditions of the Agreement remain in full force and effect."
A hearing on the settlement was held on November 7, 1996 in the Circuit Court of Cass County, Missouri. The previous litigation between the parties was officially dismissed on November 7, 1996, when the circuit court entered a judgment incorporating by reference the settlement executed...
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