Lockwood Water Users Ass'n v. Anderson, 12828
| Decision Date | 17 November 1975 |
| Docket Number | No. 12828,12828 |
| Citation | 168 Mont. 303,542 P.2d 1217 |
| Parties | LOCKWOOD WATER USERS ASSOCIATION, Plaintiff and Respondent, v. Gerald W. ANDERSON, d/b/a Magic City Village, Defendant and Appellant. |
| Court | Montana Supreme Court |
Towe, Neely & Ball, Thomas E. Towe, argued, Billings, for appellant.
Moulton, Bellingham, Longo & Mather, Ward Swanser, argued, Billings, for respondent.
This is an appeal from a summary judgment and a permanent injunction issued by the district court, Yellowstone County, restraining defendant Gerald W. Anderson, d/b/a Magic City Village, from hooking up any mobile homes to the facilities owned by the plaintiff association, whether it be to take care of attrition or otherwise, until such time as he can do so and not violate the terms of the agreement and specifically the 60 unit limitation provided for in the agreement or until the parties enter into a new agreement which supercedes the existing agreement.
In 1955 residents of the Lockwood area, adjacent to Billings, Montana, banded together in a voluntary nonprofit corporation organized for the purpose of supplying water to its members. When it was created there were approximately 150 homes servicing some 650 people in an area of some 2,200 acres known as the Lockwood Community. In the 20 years of its existence the population of the area has increased to some 2,630 people who live in 774 homes. Some 590 are members of the Association while some 137 additional homes receive water from the Association through their mobile home courts that are treated as one unit for membership purposes.
At the time of organization the Association obtained a loan from Farmers Home Administration (FHA) to put in a water service line. The loan has not been fully repaid. The FHA took a mortgage on the Association's property obligating it to conduct its business in accordance with the by-laws and certain rules of the FHA. Serious questions would arise from the mortgage provisions, if the Association were to be classified a 'public utility'.
To finance the Association memberships were sold for $50. The Association adopted articles of incorporation and by-laws in the form suggested by the FHA and it is a nonprofit corporation organized for the purpose of supplying water to members only. Its by-laws provide: (1) That the Board of Directors shall have power to make, publish and enforce rules and regulations concerning the distribution, use and application of the water under its contract; (2) That the Board of Directors may take legal proceedings to prosecute, defend, compromise all lawsuits, to make all contracts in the name of the corporation necessary and proper for the conduct of the affairs and the carrying on of the business of the corporation; (3) That no membership shall be issued or connections made at any time when the capacity of the system or the available supply of water is exhausted by the needs and demands of existing members and connections; (4) That the manner of delivering, measuring and regulating the supply of water to members shall be prescribed by the corporation, and shall at all times be under its control, and the Board of Directors or the manager, with the consent of said Board, may make such rules and regulations regarding the distribution and delivery of the water as in its judgment may appear necessary or expedient for the best interests of the corporation and its members; (5) That the membership certificates of any member delinquent in the payment of assenssments thereon shall be subject to sale; (6) That the corporation may, through its Board of Directors, after ten day notice by mail of such delinquency, terminate the supply of water to any user who is delinquent in the payment of any water charges, assessments or rentals.
Through the years as the membership increased the Association has adopted rules and regulations which require new members to pay the expense of bringing water from the main to their property lines and then on to either dwellings. This was done through the Board of Directors elected by the membership and who serve without pay. Throughout its existence the Association has assumed it was not a public utility and at no time during this period has the Public Service Commission ever attempted to regulate the Association.
In 1972, defendant Gerald W. Anderson, d/b/a Magic City Village, requested water for a trailer court. The first request was for a 300 unit court. He was advised by the Association's Board of Directors that he would be required to build a loop from the school to his property line, if he intended to develop the 300 units. He chose to cut down his request for water to 60 units and he was allowed, for the 60 unit development, to take off from a nearby main. The 1972 agreement contains this statement:
'* * * it is understood by and between the parties that no more than sixty (60) mobile home sites shall be served by such facilities.'
This 60 mobile home limitation was put in on the advice of the Association's engineer.
Service was provided to the defendant's development and by October 2, 1972, he was in violation of the agreement and he was requested by the Board to attend a meeting to discuss the matter. He refused to attend. On January 15, 1974, defendant was advised by letter that if he did not reduce the number of units to 60 his service would be terminated. Through his attorney, defendant answered the January 15 letter on January 28:
'In return for your granting an extension of time on the shutoff date, my client will take the necessary steps to reduce the number of homes served back down to sixty (60) * * *.'
In answer to this request the Association notified defendant's attorney that it was willing to try to work the problem out, 'However, we will not grant an extension past the end of February.'
As a result of these letters Blaine Anderson, son of defendant, on February 7, attended a meeting of the Board of the Association and stated that his father would complete the water loop originally requested by the Association to get additional units. He asked the Board to allow normal attrition to reduce the number of trailers in the court back to 60. The Board agreed to this request but again defendant did not live up to agreements made with the Board. By March 11 there were 70 trailers on the development. Defendant was notified he had 10 days to reduce to 60. He not only did not comply but rather, in the next 30 days, he told all mobile home dealers of a planned expansion and ran advertisements for additional trailer spaces.
On March 22, 1974, the Association filed a suit to enforce the terms of the agreement and to enjoin defendant from placing additional trailers on the court in violation the the agreement. Coincidently, defendant changed attorneys.
At the time of the show cause hearing...
To continue reading
Request your trial
-
Coastal States Gas Transmission Co., Inc. v. Alabama Public Service Com'n
...public has any right to demand water service from the defendant." In that same vein is the decision in Lockwood Water Users Association v. Anderson, 168 Mont. 303, 542 P.2d 1217 (1975), which adopted the following language of State ex rel. Public Utilities Comm'n v. Nelson, 65 Utah 457, 238......
-
Ball v. Gov't of the Virgin Islands Pub. Servs. Comm'n
...Dyke v. Geary, 244 U.S. 49, 61 (1917) (Arizona law); Petition of Pfenning, 385 A.2d 1070, 1072 (Vt. 1978); Lockwood Water Users Assoc. v. Anderson, 542 P.2d 1217, 1220 (Mont. 1975); Grever v. Idaho Telephone Co., 499 P.2d 1256, 1258 (Idaho 1972); Wilhite v. Public Service Commission, 149 S.......
-
Anchor Point, Inc. v. Shoals Sewer Co.
...a public utility. There is a split of authority as to associations which only serve their members. In Lockwood Water Users Ass'n v. Anderson, 168 Mont. 303, 542 P.2d 1217 (Mont.1975), the court held that if a utility confines its service to its own members who share the costs of operation, ......
-
City of Millbrook v. Tri-Community Water System, TRI-COMMUNITY
...Among the many authorities from other jurisdictions cited with approval by the court in Coastal is Lockwood Water Users Association v. Anderson, 168 Mont. 303, 542 P.2d 1217 (1975), which is in some ways similar to this case. Although the dispute in Lockwood concerned whether a member of th......