Duckett Sewer v. Golden Triangle Dev.

• Citation: 32 S.W.3d 178
• Parties: (Mo.App. E.D. 2000) Duckett Creek Sewer District of St. Charles County, Missouri, Plaintiff/Appellant, v. Golden Triangle Development Corporation, Defendant/Respondent. ED77404
• Decision Date: 21 November 2000
• Court: Missouri Court of Appeals

32 S.W.3d 178 (Mo.App. E.D. 2000)

Duckett Creek Sewer District of St. Charles County, Missouri, Plaintiff/Appellant, v. Golden Triangle Development Corporation, Defendant/Respondent.

ED77404

Missouri Court of Appeals Eastern District

11/21/2000

Appeal From: Circuit Court of St. Charles County, Hon. Ellsworth Cundiff

Counsel for Appellant: Jay A. Summerville

Counsel for Respondent: Brian E. McGovern

Opinion Summary: Duckett Creek Sewer District of St. Charles County appeals a declaratory judgment in favor of Golden Triangle Development Corporation. The trial court found that sewer district was required to enter into a sewer main extension contract and reimburse the developer the cost of constructing an off-site sewer line to serve developer's subdivision.

Division Two holds: The developer's claim for a contract and recoupment violates section 432.070, RSMo 1994, which requires a written contract supported by future consideration.

Clifford H. Ahrens, Presiding Judge

Duckett Creek Sewer District of St. Charles County, Missouri ("sewer district") appeals from a declaratory judgment in favor of Golden Triangle Development Corporation ("developer"). The trial court found that sewer district was required to enter into a sewer main extension contract and reimburse the developer the cost of constructing an off-site sewer line to serve developer's subdivision. We reverse.

Golden Triangle is the developer of a subdivision known as Cambridge Estates, which did not have a sewer main. To obtain planning approval from St. Charles County for the Cambridge Estates subdivision, developer needed to show that it could provide Cambridge Estates with sewer service. This would require an off-site sewer main across an adjacent subdivision known as Reddington Oaks. The developer knew when it purchased Cambridge Estates that a sewer main connection would have to go through Reddington Oaks. The developer of Reddington Oaks granted an easement to the developer of Cambridge Estates for the construction of a sewer line across Reddington Oaks.

Duckett Creek is a sewer district created under Missouri Law. Chapter 249 RSMo 1994. In 1992, sewer district adopted written Rules, Rates, and Regulations ("rules"), which set out the procedure for how developers may recoup the cost of constructing certain sewer main extensions through a sewer main extension contract which must be entered into by the developer and the sewer district. Article II, section 23 of the sewer district's rules defines a sewer main extension as "a sewer main constructed by a developer across property not owned by the developer (off-site) to service the developer's project and for which the District will grant a sewer main extension contract as provided in Article XIX." The rules require that the sewer contract be in writing and signed by both parties.

The developer knew the sewer district used sewer main extension contracts. Prior to this lawsuit, the developer had obtained recoupment for construction of other sewer mains pursuant to written sewer main extension contracts executed prior to the construction.

In August 1996, prior to the construction of the sewer line, the sewer district approved the developer's plans and proposed costs of $48,582.50. They entered into an escrow agreement in which the developer set aside funds sufficient to guarantee construction of the sewer line at the cost of $48,582.50.

In late 1996, the developers constructed a sewer line across Reddington Oaks subdivision. Actual construction costs for the sewer line were $76,443.73. No written sewer main extension contract was ever entered into by the developer and the sewer district to obtain recoupment for the sewer line across the adjacent subdivision.

On April 17, 1997, the developer orally requested recoupment and a sewer main extension contract and made a payment to the sewer district for tap-on fees at the rate of $200.00 per unit. The sewer district then informed the developers that it was not entitled to recoupment and that the tap-on fees were $400.00 per unit, not $200.00. Sewer district based its denial on what it claims was a "consistent" interpretation of its rules to deny requests for recoupment for construction of any sewer main extension across property already being developed by another developer or likely to be developed during the time of the applicant's own development. On February 9, 1998, the developer dedicated the sewer line to the sewer district but renewed its request for recoupment.

On August 10, 1998, the sewer district sought a declaratory judgment that the developer was not entitled to a sewer main extension contract or recoupment under the sewer district's rules. The developer counterclaimed seeking a determination that it was entitled to the contract and recoupment. ¹ The parties submitted the case to the court on a stipulation of facts. The trial court entered judgment in favor of developer, stating that developer was entitled to a sewer main extension contract for the off-site sewer. In addition, the trial court ruled that the developer was entitled to reimbursement of $200.00 per existing lateral tap into developer's Cambridge Estates off-site sewer and $200.00 for any future taps for a period of ten years from the date of execution of the sewer main extension contract. The sewer district filed this appeal.

In a court-tried case, the trial court's judgment will be sustained unless there is no substantial evidence to support it, it is against the weight of the evidence, it erroneously declares the law, or erroneously applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Since this case was tried on stipulation of facts, the only issue on appeal is whether the trial court drew the proper legal conclusions from the stipulated facts. State Farm Mutual Auto. Ins. Co. v. Sommers, 954 S.W.2d 18,19 (Mo. App. 1997).

In the sewer district's first point on appeal, it contends that the trial court erred in ordering it to execute a sewer main extension contract which would reimburse the developer. The sewer district argues the developer is barred as a matter of law by the statute of frauds dealing with Missouri public entities because section 432.070 RSMo 1994² requires all contracts with a Missouri public body to be in writing and supported by future consideration.

As a sewer district, Duckett Creek is a "municipal corporation" under Missouri law, State ex rel. Becker v. Wellston Sewer Dist. of St. Louis County, 58 S.W.2d 988, 991 (Mo. banc 1933), and is therefore subject to the section 432.070 statute of frauds. Section 432.070 provides:

No county, city, town . . . municipal corporation shall make any contract, unless the same shall be within the scope of its powers or be expressly authorized by law, nor unless such contract be made upon a consideration wholly to be performed or executed subsequent to the making of the contract; and such a contract, including the consideration, shall be in writing and dated when made, and shall be subscribed by the parties thereto . . . .

In Missouri the law is clear that all contracts with a municipal corporation must be in writing and all persons dealing with a municipal corporation are charged with notice of that law. Vochatzer v. Public Water Supply Dist. No. 1 of Lafayette County, 637 S.W.2d 418, 420 (Mo. App. 1982). Moreover, "[a]ny contract made in violation of [this] requirement is void." Id.

It is undisputed that developer failed to comply with the portion of the sewer district's rules, which specifically required the execution of a written sewer main extension contract. Notwithstanding the lack of a written contract, developer contends that it was entitled to a sewer main extension contract because it complied with all the conditions and requirements for such a contract set out in the sewer district's rules. Alternatively, developer contends the sewer main extension contract was a government subsidy and benefit program to which it was entitled...