DAIRY PRODUCT SERV. v. City of Wellsville

• Decision Date: 03 October 2000
• Docket Number: No. 981442.,981442.
• Citation: 13 P.3d 581,2000 UT 81
• Parties: DAIRY PRODUCT SERVICES, INC., a corporation, Plaintiff and Appellant, v. CITY OF WELLSVILLE, Defendant and Appellee.
• Court: Utah Supreme Court

13 P.3d 581

2000 UT 81

DAIRY PRODUCT SERVICES, INC., a corporation, Plaintiff and Appellant, v. CITY OF WELLSVILLE, Defendant and Appellee.

No. 981442.

Supreme Court of Utah.

October 3, 2000.

N. George Daines, Christopher L. Daines, Logan, for plaintiff.

James C. Jenkins, Bruce L. Jorgensen, Logan, for defendant.

RUSSON, Associate Chief Justice:

¶ 1 Dairy Product Services, Inc. ("DPSI"), appeals the district court's decision granting summary judgment and ordering injunctions in favor of Wellsville City ("Wellsville"). The decision upheld Wellsville's action refusing to renew DPSI's business license and also enjoined DPSI from operating without a business license and from operating in violation of Wellsville's nuisance ordinances.

BACKGROUND

¶ 2 DPSI operates a dairy processing facility within the city limits of Wellsville. The facility began operations as Magic Valley Milk Producers early in 1989, and DPSI purchased it in October 1989.

¶ 3 Shortly thereafter, Wellsville charged that DPSI's wastewater was burdening the city's wastewater treatment works. As a result, the city imposed a water service penalty and threatened to discontinue DPSI's water service if the penalty was not paid. DPSI was dependant on Wellsville water for the operation of its plant, and discontinuation of service would have resulted in the plant's closure.

¶ 4 Therefore, on August 2, 1994, DPSI filed a complaint asking the court to enjoin Wellsville from collecting the water service penalty and from discontinuing water service. The court granted the injunction based on the terms of a stipulation between the two parties. Thereafter, as a result of further negotiations and stipulations, DPSI constructed an on-site water treatment plant that began operating in June 1995. However, no final order was issued disposing of the suit.

¶ 5 As early as the spring of 1991, the city council notified DPSI that the citizens of Wellsville had begun to complain to city officials about offensive odors emanating from the DPSI facility. Written notification of these complaints was given to DPSI as part of the negotiations previously mentioned, whereby measures to reduce the smells were included in the stipulations. However, complaints from Wellsville citizens allegedly continued even after DPSI constructed its wastewater facility and undertook the stipulated preventive measures.

¶ 6 Wellsville issues business licenses on a basis of yearly renewal with all licenses expiring on December 31 of each year. Renewal for the upcoming year is automatic unless the city elects not to renew an applicant's license. In December 1995, Wellsville city officials notified DPSI that at the regularly scheduled January 10, 1996, town meeting, the Wellsville City Council intended to deny DPSI's application to renew its business license. The notice stated that the denial would be based on a nuisance violation and DPSI's failure to take appropriate measures to eliminate the offensive smells. The notice instructed DPSI that it had a right to appear, be represented by counsel, hear evidence, cross-examine witnesses, and present evidence as to why DPSI's business license renewal application should not be denied.

¶ 7 At the January 10 meeting, after much discussion among DPSI, the council, and the public, the council voted to table the issue of DPSI's business license for two weeks, until the next council meeting. A committee was formed between DPSI and some council members to devise a plan of action to eliminate the odors. The action plan was to be presented at the next council meeting.

¶ 8 On January 24, the committee reported that it had hired an environmental engineer at DPSI's expense to help find the cause of the odors and then to make recommendations to resolve the problem. In addition, the committee promised to provide the council with a progress report every two weeks. The council voted to delay reissuing DPSI's business license until DPSI and the council were satisfied that progress was evident.

¶ 9 Nevertheless, the odors from DPSI's facility allegedly continued as did complaints from Wellsville citizens. In September 1996, Wellsville served notice to DPSI that the council intended to deny DPSI's business license renewal application at the next town meeting, to be held October 9, 1996. The notice provided that DPSI could be represented by counsel, hear evidence against DPSI, cross-examine witnesses, and present evidence favorable to DPSI.

¶ 10 At the October meeting, DPSI was represented by a company official and an attorney. The minutes reflect that the DPSI attorney was instructed that he was free to cross-examine any witness. Several council members from the committee presented information regarding the odors. It appears from the minutes that DPSI questioned only one of these witnesses. Then the mayor opened the meeting for public comment from the audience with each participant limited to two minutes. Once again, the minutes reflect that DPSI questioned only one of the citizens providing public comment. Thereafter, DPSI's representatives presented their case, asking for more time to resolve the odor problem. Because the issue was the subject of litigation, the council voted to adjourn into executive session with Wellsville's attorney for deliberation. After approximately twenty-five minutes, the council returned and voted unanimously (1) that DPSI's operation was a nuisance that should be abated or controlled, and (2) to deny DPSI's business license renewal application pursuant to Wellsville City Ordinance § 5.36.040.

¶ 11 However, DPSI allegedly continued operating its facility without a business license. Consequently, in December of 1996, Wellsville filed a counterclaim to DPSI's original 1994 action. In the counterclaim, Wellsville requested that the court enforce abatement of the odor nuisance by enjoining DPSI from operating without a business license. DPSI countered that its business license was a property interest and Wellsville's proceeding had not afforded DPSI the required due process. Therefore, DPSI asked the court to conduct a judicial determination as to whether DPSI was a nuisance and to enjoin Wellsville from taking any action regarding DPSI's business license. Thereafter, Wellsville and DPSI each filed motions for summary judgment.

¶ 12 The district court granted Wellsville's motion for summary judgment and denied DPSI's motion. The court concluded that as a matter of law, Wellsville is authorized to declare what is a nuisance, as well as to abate such nuisance, and that Wellsville followed correct procedures in determining that DPSI was in violation of Wellsville's nuisance ordinances. Furthermore, the court held that Wellsville had the authority to refuse to renew DPSI's business license and Wellsville did not act arbitrarily or capriciously when it did so.

¶ 13 In addition, the court enjoined DPSI from operating its business without a license and from operating its business in such a manner as to be a nuisance as defined by Wellsville ordinances. However, on June 26, 1998, the district court issued a stay of injunction so that DPSI could operate its facility pending application for a business license. DPSI then appealed the summary judgment and order of injunction.

¶ 14 Appealing the district court's decision to grant summary judgment in favor of Wellsville, DPSI argues that (1) the court erred in concluding that section 78-38-5¹ of the Utah Code did not apply to DPSI's situation; (2) Wellsville acted outside its powers when it declared DPSI a nuisance and refused to renew DPSI's business license; and (3) DPSI was denied due process in the business license proceedings. In addition, in appealing the district court's orders of injunction, DPSI argues that (1) the court abused its discretion by issuing permanent injunctions based on Wellsville's decision rather than conducting a trial on the merits, and (2) the court erred by not being specific in the terms of the injunctions imposed.

STANDARD OF REVIEW

¶ 15 Summary judgment is appropriate only when there is a showing "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Utah R. Civ. P. 56(c); Tretheway v. Miracle Mortgage, Inc., 2000 UT 12, ¶ 7, 995 P.2d 599. In reviewing the trial court's decision to grant summary judgment, we give the court's legal decisions no deference, reviewing for correctness, while reviewing the facts and inferences to be drawn therefrom in the light most favorable to the nonmoving party. See Tretheway, 2000 UT 12

at ¶ 2, 995 P.2d 599.

¶ 16 Furthermore, "[w]hen reviewing a trial court's grant of an injunction, we are generally careful not to disturb the ruling unless the court abused its discretion or rendered a decision clearly against the weight of the evidence." Aquagen Int'l, Inc. v. Calrae Trust, 972 P.2d 411, 412 (Utah 1998). We consider whether the trial court exercised its discretion using sound equitable principles based on all of the facts and circumstances. See id. at 412-13.

ANALYSIS

I. APPLICABILITY OF UTAH CODE ANN. § 78-38-5

¶ 17 DPSI claims on appeal that section 78-38-5 of the Utah Code renders void Wellsville's declaration that DPSI's operation is a nuisance. DPSI argues that genuine issues of material fact exist as to whether it qualifies as a manufacturing facility protected by the statute's limitation on the application of local nuisance ordinances. DPSI maintains that section 78-38-5 protects DPSI's operation even if the facility has changed hands or operations have changed.

¶ 18 Wellsville counters that section 78-38-5 is not applicable to DPSI because Wellsville claims it found that the nuisance resulted from a change in the operations within DPSI's plant that increased the odors to the point of becoming a nuisance. Additionally, Wellsville argues that DPSI was in operation for less than three years, thus failing to qualify for the protection of ...