Knutson Hotel Corporation v. City of Moorhead

• Decision Date: 09 August 1957
• Docket Number: No. 37064,37064
• Citation: 250 Minn. 392,84 N.W.2d 626
• Parties: KNUTSON HOTEL CORPORATION, Respondent, v. CITY OF MOORHEAD, Appellant.
• Court: Minnesota Supreme Court

Page 626

84 N.W.2d 626

250 Minn. 392

KNUTSON HOTEL CORPORATION, Respondent, v. CITY OF MOORHEAD, Appellant.

No. 37064.

Supreme Court of Minnesota.

Aug. 9, 1957.

Syllabus by the Court.

The city of Moorhead, pursuant to M.S.A. § 443.09, installed a system of sewers and sewage-disposal plant and adopted ordinances fixing rates and charges for the use and benefit of the sewage-disposal plant, which charges were determined by rates applied to the amount of water consumed which actually entered the sewage-disposal system. The plaintiff hotel was charged by the city, on the basis of such rates, for a large volume of water used in the operation of an air-conditioning unit, which water was discharged onto the roof of the hotel from where it flowed into a storm sewer, emptying into the Red River and not into the sewage-disposal plant through the sewerage system, Held:

1. In an action by the hotel to recover amount paid on volume of water furnished by defendant city which did not enter the sewerage system, the suit did not involve a collateral attack upon a rate structure but was one to recover payment for service which it had not received.

2. Where the service for which money is collected by a municipality is not furnished, the city is required to make restitution.

3. Where the user of city water complains of excessive charges for use of such service to a proper agent of the city and is told that the service will be discontinued if payment is not made, such action on the part of the city constitutes duress and makes payment involuntary.

4. Where the city ordinance provided a means to obtain administrative relief only for water rater to be charged in the furture and the plaintiff did not find out until shortly before action was instituted that payments for water services furnished in the past had been improperly exacted, its only remedy to obtain a refund for overcharges was to bring suit. No purpose would have been served by attempting to obtain administrative relief where the only thing to be accomplished would be a reduction of rates to be charged in the future.

5. Plats made by the engineering department of a municipality are prima facie evidence of the correctness of facts shown on them and it was not error for the court to allow an exhibit from the city engineer's department showing the layout and classifications of the city's sewer system even though the person who prepared the plat did not testify as to its authenticity.

James E. Garrity, City Atty., Moorhead, for appellant.

Carlsen & Greiner, Minneapolis, for respondent.

MURPHY, Justice.

This is an appeal from an order of the district court denying the defendant's alternative motion for judgment notwithstanding the verdict or for a new trial. The case involves an action by the Knutson Hotel Corporation, operator of the Frederick Martin Hotel of Moorhead, Minnesota, to recover from the city of Moorhead alleged overcharges for use of sewer facilities.

The defendant, city of Moorhead, was authorized by M.S.A. 443.09 to install a system of sewers and a sewage-disposal plant and to adopt an ordinance charging a fair and equitable rate for the use of such facilities. The statute provides that the charges shall be, 'as nearly as possible, equitable and in proportion to the service rendered' and that the city may fix the charges 'on the basis of water consumed, or on any other equitable basis the governing body may deem appropriate,' which charges may be established as a surcharge on the water bills of consumers in the municipality.

Pursuant to this statute the city of Moorhead adopted Ordinance No. 177 in 1948. The ordinance provided for the establishment of rates and charges for the use and benefit of the sewage-disposal plant. The charges were based on the amount of water furnished to the premises by the city. In August 1951, Ordinance No. 211 was passed amending Ordinance No. 177. Ordinance No. 211 dealt with the fixing of rates and charges for the use and benefit of the sanitary sewerage system. The new ordinance also provided that if it could be shown to the satisfaction of the city engineer that a portion of the water consumed did not and could not enter the sanitary sewerage system, then, upon the approval of the city council, the city engineer was authorized to determine the amount of water consumed which actually did enter the system and then charges were to be based on that amount of water. Both ordinances provided that, if bills for these charges were not paid, the water service to such premises was to be discontinued.

The hotel involved in this case was opened in May 1950. From that time until August 1955, the city billed the hotel each month for sewage disposal and the total amount billed was $12,206.74.

The hotel had an air-conditioning unit which was in operation during the months of June through October each year. The type of air conditioner used by the hotel during the period involved in this suit used a large volume of water in its operation. This water was discharged from the air-conditioning system onto the roof of the hotel, from whence it flowed into the storm sewer.

The storm sewer is distinct from the sanitary sewer in Moorhead. The sanitary sewer flows east through the sanitary system to the disposal plant, for the operation of which the sewerage rate is charged. The storm sewer flows west and discharges directly into the Red River.

The average monthly charge to the hotel for sewage disposal during the months when the air conditioner was not in operation was about $59. The average monthly charge when the air conditioner was in operation was approximately $569. The hotel manager inquired about the large discrepancy in the rates in 1950, and he was advised that the water from the air conditioner was being discharged into the sanitary sewer system and was flowing through the sewage-disposal plant. There were subsequent negotiations between the city officials and the hotel management in reference to the sewerage charges, but it was not discovered until the summer of 1954 that the water from the air-conditioning plant was probably being discharged into the storm sewer and not into the sanitary sewer. At that time the Public Service Commission of Moorhead offered to reduce by 50 percent the sewerage rate for the water being used by the air conditioner if the hotel would install at its own expense a separate water meter to measure the amount of water used in the air-conditioning system. The hotel refused this offer. At about this time the hotel was also warned that, if it refused to pay the sewage-disposal charges, its water service would be terminated. It was not until the summer of 1955 that it was definitely proven that the water from the air conditioner did in fact flow into the storm sewer.

The plaintiff brought suit to recover the amount of money it paid as sewerage charges during the period of June 1950 to August 10, 1955, which was in fact attributable to water which was used in its...