City of Rockport v. City of Malvern

• Decision Date: 18 November 2010
• Docket Number: No. 10–151.,10–151.
• Citation: 2010 Ark. 449,374 S.W.3d 660
• Parties: CITY OF ROCKPORT, Arkansas, Appellant v. CITY OF MALVERN, Arkansas, Appellee.
• Court: Arkansas Supreme Court

2010 Ark. 449

374 S.W.3d 660

CITY OF ROCKPORT, Arkansas, Appellant

v.CITY OF MALVERN, Arkansas, Appellee.

No. 10–151.

Supreme Court of Arkansas.

Nov. 18, 2010.

Catlett Law Firm, PLC, Little Rock, by: Christian C. Michaels, for appellant.

David Kizzia, Randy Hill, and Anderson, Murphy & Hopkins, L.L.P., Little Rock, by: Brett D. Watson, for appellee City of Malvern.

DONALD L. CORBIN, Justice.

Appellant City of Rockport appeals the order of the Hot Spring County Circuit Court finding substantial compliance with certain annexation requirements set forth in Ark.Code Ann. § 14–40–2002 (Supp.2009). On appeal, Rockport argues that the circuit court erred in concluding that sewer services were provided, accepted, and in place or that the parties took substantial steps to cause the requested sewer services to be provided, accepted, and in place in accordance with the statutory requirements. Additionally, Rockport argues that the circuit court erred in failing to recuse where there was an appearance of impropriety. We find no error and affirm.

Aaron Wright and Leann Wright–Welch (“landowners”) own real property that was located within the incorporated limits of the city of Rockport prior to 2001. ¹ They sought to detach from Rockport and be annexed into the city of Malvern on or about May 11, 2001, pursuant to section 14–40–2002, the statutory provision governing detachment and annexation. As part of the statutory process, the landowners requested Malvern to provide city services, such as sewer, fire protection, street-sweeper service, police protection, animal control, and services from the municipal water department. Malvern adopted Resolution No. 09–01 accepting the Wright–Welch property and committing to make the requested services available. Thereafter, Rockport filed suit in circuit court seeking to have the annexation set aside. The circuit court upheld the annexation, and this court affirmed that decision. See City of Rockport v. City of Malvern, 356 Ark. 393, 155 S.W.3d 9 (2004) ( Rockport I ).

On August 28, 2008, Rockport filed a complaint for declaratory judgment, averring that the deadline, pursuant to section 14–40–2002(b)(2)(B)(iii), for Malvern to provide the requested services expired on or about March 11, 2005, twelve months from the date this court affirmed the annexation in Rockport I. In its complaint, Rockport asserted that Malvern failed to provide, or take substantial steps to provide, the requested services, particularly sewer service, to the Wright–Welch property. Thus, according to Rockport, Malvern's failure to comply with the statutory-time provision required a finding that the annexation was void as of March 11, 2005. Further, Rockport sought a court order requiring Malvern to remit to it the full amount of all sales-tax collections and other revenues collected by Malvern since March 11, 2005, that would have otherwise been collected by Rockport had the annexation never occurred. Malvern filed an answer denying the claims asserted by Rockport and also asserting several affirmative defenses, including res judicata or collateral estoppel, statute of limitations, acquiescence and laches, waiver, and unjust enrichment.

Prior to trial, Rockport also filed a motion requesting the circuit court judge to recuse. In seeking recusal, Rockport asserted that the judge had served as city attorney for Malvern for a number of years and had also represented private clients against Rockport in similar annexation issues. Thus, according to Rockport, there existed an appearance of impropriety. Following a hearing on the motion, the circuit court entered an order denying the motion to recuse.

A bench trial was subsequently held on August 21, 2009. Carl Wheatley, an employee with Malvern Water Works, testified that there was not a sewer main on the Wright–Welch property but that there was one within twenty yards of that property. Wheatley also testified that between March 11, 2004, and March 11, 2005, there had been no work done to connect that main sewer to the property. On cross-examination, Wheatley explained that there was no other work that the city needed to do to have the sewer line in place for the landowners and that the next step to get the property connected to the sewer line was with the landowners.

Steven Northcutt, mayor of Malvern, also testified. He testified that when a landowner annexes into the city, the city provides the requested services. According to Northcutt, there are requirements for landowners who want sewer service once they are annexed into the city. He explained that in this case, the landowners have taken steps to tie onto the sewer line, including going to the planning commission and meeting with a code enforcement officer.

Len Dawson, the code enforcement officer for the city of Malvern, testified that Leann Wright–Welch approached him in 2005 and asked for information about building apartments in Malvern. She brought plans for developing the property at issue here, and the two discussed water and sewer, fire protection, setbacks, streets, roads, cul-de-sacs, and building layout. Dawson also stated that he and Wright–Welch talked about sewer service and that he advised her to use a four-inch gravity-flow drain pipe to service most, if not all, of the apartments. Finally, he stated that the city of Malvern had no additional steps to take to provide sewer service because it was up to the landowners to request a connection.

Wright–Welch testified that she sought to have her property annexed into Malvern because the services she needed were not available in Rockport. She explained that she had architectural plans dating back to 2002 and that she is continuing to develop her plan for that property. She stated that she has discussed connecting to the sewer line with Malvern city employees. According to Wright–Welch, once it is determined what kind of line is needed, where it has to be placed, and all engineering specifics are completed, she will requestand pay for a connection to the sewer line. She stated that she has taken the appropriate steps to make the sewer line accessible between her property and the city's manhole. Wright–Welch testified that she exchanged easements with the owner of an adjoining property, thus, allowing her to access the sewer line or any other needed utility. This easement was executed in February 2004. Wright–Welch also testified that she has spent nearly $50,000 to hire architects, engineers, soil-sample people, and others in developing the property.

Following the bench trial, the circuit court entered an order on September 25, 2009, making the following findings:

6. The Court finds that Malvern has sewer service to the property provided and in place by having a functioning sewer main within 60 feet of the property line. The landowner has not requested nor paid the connection fee for the service. The landowner has significant input on the type of sewer service needed to best develop the property. Malvern may not dictate the type of sewer service the landowner receives nor compel the landowner to pay the expense of connecting a sewer line that is not suited to the requirements of the development.

7. The Court finds that all necessary services required by statute are provided and in place. The Court finds that Malvern has accepted the property and committed to provide the services. The landowner has accepted services from Malvern. Malvern has substantially complied with the statute and is able to connect sewer immediately upon request of the landowner.

Thus, the circuit court denied Rockport's request for a declaration that the annexation was void. This appeal followed.

As its first point on appeal, Rockport argues that the circuit court erred in finding that sewer services were “provided, accepted, and in place” where it was undisputed that the sewer system did not reach the landowners' property and the landowners have not requested a connection or paid a connection fee. Similarly, Rockport asserts that the circuit court erred in finding that there has been substantial compliance with the requirements of section 14–40–2002(b)(2)(B)(iii). Malvern argues to the contrary that Rockport's proposed reading of the statute is incorrect and that the evidence established that there had been substantial compliance with the statute.

The standard of review on appeal from a bench trial is not whether there is substantial evidence to support the findings of the circuit court, but whether the circuit court's findings were clearly erroneous or clearly against the preponderance of the evidence. See, e.g., El Paso Prod. Co. v. Blanchard, 371 Ark. 634, 269 S.W.3d 362 (2007). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a firm conviction that an error has been committed. Id. Facts in dispute and determinations of credibility are solely within the province of the fact-finder. Id.

Further, we review issues of statutory construction de novo, as it is for this court to determine what a statute means. Johnson v. Dawson, 2010 Ark. 308, 365 S.W.3d 913. In this respect, we are not bound by the circuit court's decision; however, in the absence of a showing that the circuit court erred in its interpretation of the law, that interpretation will be accepted as correct on appeal. Id.

In 1999, Act 779 of 1999, now codified at Ark.Code Ann. §§ 14–40–2001 to –2002 (Supp.2009) (the “Detachment–Annexation Statutes”), was enacted to provide the procedurefor the annexation of land into an adjoining municipality in order to obtain municipal services. Specifically, section 14–40–2002 provides the criteria that allows a landowner to seek to detach from one municipality and be annexed by another. This section further sets forth requirements dictating when and what actions must occur for the other municipality to annex certain land and states the procedure for what happens if the statutory...