Comcast of Oregon II v. City of Eugene

• Decision Date: 28 March 2007
• Docket Number: A126445.,160307308.
• Citation: 211 Or. App. 573,155 P.3d 99
• Parties: COMCAST OF OREGON II, INC., Plaintiff-Appellant, v. CITY OF EUGENE, an Oregon municipal corporation, Defendant-Respondent.
• Court: Oregon Court of Appeals

155 P.3d 99

211 Or. App. 573

COMCAST OF OREGON II, INC., Plaintiff-Appellant, v. CITY OF EUGENE, an Oregon municipal corporation, Defendant-Respondent.

160307308.

A126445.

Court of Appeals of Oregon.

Argued and Submitted August 30, 2006.

Decided March 28, 2007.

Duane A. Bosworth, Portland, argued the cause for appellant. With him on the briefs were Kevin H. Kono and Davis Wright Tremaine LLP.

Jerome Lidz, Eugene, argued the cause for respondent. With him on the briefs were Ross M. Williamson and Harrang Long Gary Rudnick P.C.

Before BREWER, Chief Judge, and SCHUMAN and ROSENBLUM, Judges.

ROSENBLUM, J.

Plaintiff brought this action, seeking a declaratory judgment declaring that certain permit fee schedules enacted by defendant City of Eugene (the city) were invalid and seeking to recover part of the money that it had paid for permits under those fee schedules.¹ The parties filed cross-motions for summary judgment. The city asserted that the fee schedules were validly enacted; that, even if they were not, plaintiff had paid the fees voluntarily and thus was not entitled to recover them; and that, in any event, plaintiff had failed to comply with notice requirements under the Oregon Tort Claims Act (OTCA) before commencing the action. The trial court rejected the city's OTCA argument and ruled that plaintiff had paid the fees under duress, but it concluded that the fee schedules were validly enacted. It therefore entered judgment in the city's favor. Plaintiff appeals, arguing that it, not the city, was entitled to summary judgment. The city cross-assigns error to the trial court's ruling under the OTCA and to its ruling that plaintiff paid the fees under duress. We conclude that the fee schedules were not validly enacted, because the city manager did not consider the amounts charged for similar permits in other jurisdictions, and that plaintiff was thus entitled to summary judgment on its declaratory judgment claim. However, we also conclude that issues of fact remain on the question of duress; we therefore remand for further proceedings on that issue.

Before we recite the pertinent facts of the case, we pause to elucidate the scope and standard of our review of the facts. As noted, both parties moved for summary judgment on the same issues and plaintiff assigns error to the grant of the city's motion and to the denial of its own motion. Under the circumstances, both rulings are reviewable. Brock v. State Farm Mutual Auto. Ins. Co., 195 Or.App. 519, 521, 98 P.3d 759 (2004). Each moving party has the burden of demonstrating that there are no material issues of fact and that the moving party is entitled to judgment as a matter of law. Eden Gate, Inc. v. D & L Excavating and Trucking, Inc., 178 Or.App. 610, 622, 37 P.3d 233 (2002). In regard to each motion, we view the evidence and all reasonable inferences that can be drawn therefrom in the light most favorable to the nonmoving party. Brock, 195 Or.App. at 521, 98 P.3d 759. In this case, the facts are largely undisputed. For present purposes, except where noted otherwise, we state the facts neutrally. Later in this opinion, where necessary, we will explain what inferences can be drawn in each party's favor.

Plaintiff has a franchise agreement with the city to provide cable services. In June 2001, plaintiff and the city entered into an agreement under which plaintiff would, by June 30, 2003, complete a city-wide upgrade of its cable facilities, which required installation of a significant amount of new cable, some underground and some aerial. The agreement provided for penalties for failure to timely complete the upgrade:

"In the event the upgrade is not completed and activated by June 30, 2003 without just cause, [plaintiff] will provide to the City a one-time payment of $25,000.00 in addition to the franchise fees due and payable to the City for the year 2004 and the City may pursue its enforcement remedies under the current franchise including Section 15—Resolution of Disputes, Section 19—Penalties, and Section 16(3)—Termination."

The city requires utilities to obtain construction permits for work done in a public right of way, so plaintiff was required to obtain a number of permits for the upgrade project. The fees that the city charged for those permits form the basis of this dispute.

Eugene Code (EC) 7.300(1) provides that the fee for a permit for work affecting a public way "shall be set by the city manager pursuant to section 2.020 of this code in an amount sufficient to fully recover all of the City's costs related to processing the application for the permit and inspecting the work during and after completion of the work." EC 2.020, in turn, provides procedures by which the city manager or his designee is to determine and set all fees imposed by the city for "services, goods, use of municipal property, licenses and permits." Subsection (2) sets forth five factors that the city manager "shall consider," including the "full costs of providing the service supported by the fee" and the "amounts charged by other comparable providers." Subsections (3) through (5) provide for public notice of a proposed fee, a period for receiving written comments, and recording of administrative orders setting fees.

The fee that the city charges for a given utility permit is determined, in part, by the length of the utility project. However, before January 2002, the applicable fee schedule capped fees at the amount charged for a 1,000-foot project—in other words, all other factors being equal,² the fee for a 10,000-foot project was the same as the fee for a 1,000-foot project.

In 2001, city staff responsible for issuing utility permits determined that permit fees were not covering processing and inspection costs. To come into compliance with EC 7.300(1), the staff—headed by Utility Permit and Inspection Supervisor Damon Joyner—developed a new fee schedule. The new schedule raised the fee rates and eliminated the 1,000-foot cap. Evidence in the summary judgment record indicates that Joyner considered a number of factors in setting the fees, including the amount of money budgeted for the permitting program, the time spent by involved staff members on permit-related activities, the average number of permits issued annually, and the revenues that the new fee schedule would generate in an average year.

With respect to the requirement in EC 2.020(2)(d) that the city manager consider "[t]he amounts charged by other comparable providers," Joyner concluded that the fees charged for similar permits in other jurisdictions were irrelevant in light of the specific directive to establish fees in an amount that would recover the city's costs. Thus, he did not obtain any specific information about other jurisdictions' fee schedules.

Joyner delivered the proposed new fee schedule to the city manager, and, in December 2001, the city published notice of a proposed order adopting the new schedule. The notice provided that the city would accept written comments on the proposed order for a 30-day period, but the city received no comments. On January 30, 2002, by Administrative Order 58-01-18-F (the 2002 order), the city manager adopted the new schedule.

Five months later, in June 2002, plaintiff sent the city a letter complaining about the new permit fees. Plaintiff objected to having to obtain permits for aerial installations, which, it contended, the city had never required before. Plaintiff also argued, among other things, that the fees for such permits violated EC 7.300(1) because they greatly exceeded the city's costs associated with inspecting aerial installations. In other correspondence with the city, plaintiff asserted that, as a result of the new fee schedule, the total cost of permits that it would have to obtain for the upgrade project would be approximately $360,000, rather than $10,000 to $15,000, as plaintiff had originally anticipated.

In response to plaintiff's letter and other complaints that the city received about the new fees, the staff developed a revised fee schedule under which aerial installations over five miles in length would be charged a lower rate. For aerial installations up to five miles in length, the rates set in the 2002 order would continue to apply. In February 2003, the city manager issued Administrative Order 58-02-29-F (the 2003 order), adopting the reduced rate and ratifying the other rates established in the 2002 order.

Plaintiff continued the upgrade project, paying the permit fees under protest. It completed the project on April 29, 2003, two months ahead of the deadline. By then, plaintiff had paid approximately $375,000 for permits associated with the project.

On April 21, 2003, plaintiff initiated this action. Plaintiff sought a declaration that the fee schedules adopted in the 2002 and 2003 orders violated EC 2.020(2) and EC 7.300(1); in a separate claim for money had and received, it sought damages in the amount that the city allegedly overcharged for permits. The parties filed cross-motions for summary judgment on both the declaratory judgment claim and the money had and received claim. The city argued in support of its motion that plaintiff's claims with respect to the 2002 order were barred because plaintiff failed to prove that it had given tort claims notice in compliance with the Oregon Tort Claims Act insofar as its claims were aimed at the 2002 order. See ORS 30.275(1) ("No action arising from any act or omission of a public body or an officer, employee or agent of a public body within the scope of [the OTCA] shall be maintained unless notice of claim is given as required by this section."). On the merits, the city argued that the 2002 and 2003 orders were both validly enacted. The city also contended that, even if the orders were not valid, plaintiff was not entitled to a refund of the permit fees because it had paid them voluntarily.

In support of its summary judgment motion, plaintiff argued that both orders were...