Dyersburg Suburban Consolidated Utility District v. City of Dyersburg, No. W2006-01704-COA-R3-CV (Tenn. App. 6/29/2007)
| Decision Date | 29 June 2007 |
| Docket Number | No. W2006-01704-COA-R3-CV.,W2006-01704-COA-R3-CV. |
| Parties | DYERSBURG SUBURBAN CONSOLIDATED UTILITY DISTRICT v. THE CITY OF DYERSBURG, et al. |
| Court | Tennessee Court of Appeals |
John W. Palmer, Jason Ladon Hudson, Dyersburg, TN, for Appellant
John M. Lannom, James Sampson Wilder, III, Dyersburg, TN, for Appellee
Donald Lee Scholes, Nashville, TN, for Amicus Curiae, Tennessee Association of Utility Districts
Alan E. Highers, J., delivered the opinion of the court, in which W. Frank Crawford, P.J., W.S., and Holly M. Kirby, J., joined.
This appeal involves a dispute between a city and a rural water association as to which entity is entitled to provide water service to a proposed subdivision. The rural association has a defined service district in which it is empowered to provide water service, and most of the disputed property lies within the rural association's boundaries. However, the city annexed the proposed subdivision and now claims that it has the exclusive right to provide water service to the property. The rural association argues that 7 U.S.C. § 1926(b), the Anti-Curtailment Provision of the Consolidated Farm and Rural Development Act, protects its service area and prohibits the city from providing water service to the property. The trial court granted summary judgment to the city, finding the federal statute inapplicable. For the following reasons, we affirm in part, reverse in part and remand for further proceedings.
Dyersburg Suburban Consolidated Utility District ("DSCUD") is a public utility district that provides water service to areas of Dyer County, Tennessee. DSCUD's district service boundaries were established by 1961 Tenn. Priv. Acts ch. 287. The City of Dyersburg ("the City") is a municipal corporation also located in Dyer County. The City provides water and sewer service within and beyond its city limits.
On June 22, 2005, Pennwards Associates, L.P., ("the Developer") purchased approximately 73 acres of undeveloped farmland west of the city limits of Dyersburg, which is designated as Parcel 97 on the county tax assessor's map. The southernmost two-thirds of the parcel lies within DSCUD's district service boundaries. The Developer has proposed to subdivide the property into a 182-lot subdivision known as Creek Wood Subdivision. On July 18, 2005, the City approved annexation of the entire parcel, and the relevant ordinance stated:
On October 13, 2005, Mr. Ben Edwards, co-owner of the Developer, attended DSCUD's Commissioners' meeting and requested that DSCUD provide water service to the proposed Creek Wood Subdivision. Specifically, he requested that DSCUD install a water line connecting DSCUD's closest existing water line along Highway 104 to the southern boundary of the subdivision. The new water line would have to cross over another farm, but Mr. Edwards proposed that the line could be installed along a sewer easement that the Developer was obtaining across the farm. The DSCUD Commissioners unanimously passed a motion to install the water line to the subdivision at DSCUD's expense.
Apparently, the Developer subsequently abandoned its plan to obtain water from DSCUD, and the City installed a water line to the northern boundary of the property with intentions of providing water to the entire subdivision, including the area within DSCUD's service boundaries. DSCUD filed the present action against the City and the Developer on March 29, 2006, requesting a declaratory judgment regarding its boundaries and its right to supply water within its boundaries, and it sought an injunction preventing the City from installing water lines within DSCUD's service area and otherwise interfering with DSCUD's service rights.
The City and the Developer filed motions to dismiss the complaint for failure to state a claim, asserting that when the City annexed the property, it gained the exclusive right to provide water service to the area. Both defendants also claimed that any disputes between an annexing municipality and an existing utility district must be arbitrated pursuant to Tenn. Code Ann. § 6-51-111. In response, DSCUD claimed that 7 U.S.C. § 1926(b) protected its service area from any encroachment by an annexing municipality because DSCUD is a rural water association with outstanding debts to Rural Development, an agency of the United States Department of Agriculture. Both parties submitted affidavits in support of their arguments, and the trial court treated both defendants' motions to dismiss as motions for summary judgment.
On July 5, 2006, the court entered an order dismissing all claims against the Developer, finding that no claim had been stated against the Developer, and that the Developer was not a proper party to the lawsuit. The court designated its order as final pursuant to Tenn. R. Civ. P. 54.02.
On July 17, 2006, an order was entered granting the City's motion for summary judgment. The trial court determined that although the disputed property was located mostly within DSCUD's defined service area, DSCUD had not actually provided or made water service available to the property, and therefore it was not entitled to the protection of the federal statute. This finding was based upon the fact that, in order to serve the subdivision, DSCUD would have to extend a line approximately 1900 feet across another farm, and DSCUD did not presently have an easement authorizing it to do so. Because the court found the federal statute inapplicable, it held that the City had the exclusive right to serve the property it annexed under state law, and that any disagreements must be arbitrated.
On August 10, 2006, DSCUD filed its notice of appeal of the trial court's order granting summary judgment to the City.
Appellant has timely filed its notice of appeal and presents the following issue, as we perceive it, for review:
Whether the trial court erred in granting the City's motion for summary judgment and finding that T.C.A. § 6-51-111 applied rather than Title 7 of the United States Code § 1926(b), because a disputed issue of fact existed as to whether DSCUD provided or made water service available to the property.
For the following reasons, we reverse the decision of the chancery court and remand for further proceedings.
No presumption of correctness attaches to a trial court's findings in a summary judgment case. Burgess v. Harley, 934 S.W.2d 58, 62 (citing Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn. 1995)). A summary judgment is appropriate only when there is no genuine dispute of material fact with regard to the claim or defense asserted in the motion, and when the moving party is entitled to a judgment as a matter of law. Id. (citing Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993); Anderson v. Standard Register Co., 857 S.W.2d 555, 559 (Tenn. 1993)).
The critical focus is limited to those facts deemed "material," meaning facts that must be decided in order to resolve the substantive claim or defense at which the motion is directed. Byrd v. Hall, 847 S.W.2d 208, 211 (Tenn. 1993). We must take the strongest legitimate view of the evidence in favor of the nonmoving party, allow all reasonable inferences in favor of that party, and discard all countervailing evidence. Id. at 210-11 (citations omitted). A court is not to weigh the evidence in evaluating a summary judgment motion. Id. at 211. A summary judgment should not be affirmed if any doubt or uncertainty exists with regard to the facts or the conclusions to be drawn from the facts. Burgess, 934 S.W.2d at 62 (citing Carvell, 900 S.W.2d at 26; Byrd, 847 S.W.2d at 211). When the evidence establishes a disputed fact, and the fact is material, the court must then determine whether the disputed material fact creates a genuine issue. Byrd, 847 S.W.2d at 215. The test for a "genuine issue" is whether a reasonable jury could legitimately find in favor of one side or the other. Id.
"[T]he party seeking summary judgment must carry the burden of persuading the court that no genuine and material factual issues exist and that it is, therefore, entitled to judgment as a matter of law." Byrd, 847 S.W.2d at 211. Summary judgment will be appropriate when, after being given a reasonable opportunity to substantiate its claims, the nonmoving party is unable to establish an essential element of its case on which it will have the burden of proof at trial. Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 321-25, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986)).
As previously mentioned, DSCUD is a public utility district. Tenn. Code Ann. § 7-82-301(a)(1) (2005) addresses a utility district's status and provides, in relevant part:
From and after the date of the making and filing of an order of incorporation, the district so incorporated shall be a "municipality" or public corporation in perpetuity under its corporate name, and the district shall in that name be a body politic and corporate with power of perpetual succession, but without any power to levy or collect taxes. . . . So long as the district continues to furnish any of the services that it is authorized to furnish in this chapter, it shall be the sole public corporation empowered to furnish such services in the district, and no other person, firm or corporation shall furnish or attempt to furnish any of the services in the area embraced by the district, unless and until it has been established that the public convenience and necessity requires...
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