MCI Metro Access Transmission Services, Inc. v. City of St. Louis

• Decision Date: 11 February 1997
• Docket Number: Nos. 69552,69716,s. 69552
• Citation: 941 S.W.2d 634
• Parties: MCI METRO ACCESS TRANSMISSION SERVICES, INC., Plaintiff/Appellant/Cross-Respondent, v. CITY OF ST. LOUIS, Defendant/Respondent/Cross-Appellant.
• Court: Missouri Court of Appeals

Page 634

941 S.W.2d 634

MCI METRO ACCESS TRANSMISSION SERVICES, INC. Plaintiff/Appellant/Cross-Respondent, v. CITY OF ST. LOUIS, Defendant/Respondent/Cross-Appellant.

Nos. 69552, 69716.

Missouri Court of Appeals,

Eastern District,

Division Three.

Feb. 11, 1997.

Motion for Rehearing and/or Transfer to

Supreme Court Denied March 20, 1997.

Application to Transfer Denied

April 29, 1997.

Leland B. Curtis, Curtis, Oetting, Heinz, Garrett & Soule, P.C., Clayton, Co-Counsel for Appellant.

Andrew Rothschild, Thomas P. Berra, Jr., Lewis, Rice & Fingersh, L.C., St. Louis, for Appellant.

James L. Matchefts, Michael A. Garvin, Associate City Counselors, St. Louis, for Respondent.

GRIMM, Judge.

In this case, both plaintiff MCI ¹ and defendant City of St. Louis sought declaratory judgments and injunctions. The center of the dispute is St. Louis City Communications Transmission Systems ordinance 62,233. MCI claimed it is exempt from City's license fees, while City claimed otherwise.

Also, MCI alleged it was entitled to an injunction to require City to act on, and grant, its request for a construction permit. In contrast, City sought an injunction to prohibit MCI from operating its communications transmission system until it complied with the ordinance's requirements.

The trial court found that Western Union, ² MCI's predecessor in interest, continued to have contractual rights stemming from an 1881 city ordinance. Further, it found that those rights were assignable.

However, it declared MCI's acquisition of Western Union's St. Louis rights void for noncompliance with a statutory requirement. Nevertheless, it granted MCI one year to have the acquisition "validated prospectively by an order of the Public Service Commission of Missouri." In addition, it restrained City from collecting any fees prescribed by the ordinance.

Both parties appealed. We hold that MCI's right to construct and operate conduits under prior ordinances has expired. We further hold that under the doctrine of primary jurisdiction, the Public Service Commission has exclusive jurisdiction to determine compliance with the statutory requirement. Therefore, the trial court lacked subject matter jurisdiction of that issue. We reverse and remand. I. Background

Western Union has operated in St. Louis for more than a hundred years. In 1879, the General Assembly issued its revised statutes. The provision pertinent to telegraph companies provides:

Companies organized under the provisions of this article, for the purpose of constructing and maintaining telephone or magnetic telegraph lines, are authorized to set their poles, piers, abutments, wires and other fixtures, along, and across any of the public roads, streets and waters of this state, in such manner as not to incommode the public in the use of such roads, streets and waters. Chap. 21, Art. V, § 879, RSMo 1879. (emphasis added).

Thereafter, on February 25, 1881, City adopted ordinance 11,604. It is titled, "An ordinance to regulate the erection of telegraph and telephone poles." Section 1 of that ordinance provides:

Any telegraph or telephone company ... is hereby authorized to set its poles, pins, abutments, wires and other fixtures along and across any of the public roads, streets and alleys of the city subject to the regulations hereinafter provided. (emphasis added).

The ordinance permitted City to occupy and use the top cross-arm of any pole free of charge. On March 17, 1881, City filed Western Union's acceptance of the ordinance's provisions.

In 1884, City adopted ordinance 12,733. This ordinance required telegraph companies to pay $5.00 per year for each pole in City's streets, alleys, and public places. When Western Union refused to pay, City sued for $22,635, the amount it claimed was due. See City of St. Louis v. Western Union Telegraph Co., 39 F. 59 (C.C.E.D.Mo.1889).

Following remand, the court held that the 1881 ordinance created a contract between City and Western Union. Under that contract, City could not unilaterally change the terms and add a $5.00 per pole per year charge. Therefore, the court entered judgment in Western Union's favor. City of St. Louis v. Western Union Telegraph Co., 63 F. 68, 71-72 (C.C.E.D.Mo.1894); aff'd. 166 U.S. 388, 17 S.Ct. 608, 41 L.Ed. 1044 (1897).

While that case was pending on appeal, in 1889, the Missouri General Assembly amended its statute relating to telephone and telegraph companies. See Chap. 42, Art. V, § 2721, RSMo 1889. Two significant changes were made.

First, the clause "along, and across any of the public roads" was amended to read, "along, across or under any of the public roads." (emphasis added). In addition, the General Assembly added a proviso. It states:

Provided, any telegraph or telephone company desiring to place their wires and other fixtures under ground, in any city, they shall first obtain consent from said city through the municipal authorities thereof.

Western Union sought City's consent. On September 8, 1896, City enacted ordinance 18,680. Under this ordinance, telegraph companies were required to remove their poles and wires and place them underground in a specified downtown area ³ by December 31, 1898. They were authorized "to construct underground conduits and to place and operate wires, tubes and cables therein." This specific authorization was not limited to the downtown area. Rather, it extended throughout the city.

The ordinance required the companies to submit their plans to the Board of Public Improvements for its approval. The plans had to include "such ducts, manholes and appurtenances as the city may require for its police and fire circuits and telephone service ... to be constructed and maintained by the parties receiving the permit, and to be used by the city free of charge or cost of any kind."

The ordinance also contained a termination clause, § 604-P. It says:

The rights, privileges and powers conferred and authorized by this article shall cease and determine and become null and void on the fifteenth day of April, nineteen hundred and forty.

On November 14, 1896, Western Union filed its letter of acceptance with the City Register. Its letter said it "hereby accepts in all respects the terms, conditions and obligations of ordinance No. 18,680, approved September 8th, 1896."

Western Union did not meet the 1898 deadline to place its wires underground downtown. City granted it several extensions. The last ordinance granting an extension furnished to us is dated January 1906 and granted an additional year.

The record is silent as to any conflicts until the 1980's. At that time, City enacted an ordinance which imposed a ten percent charge on Western Union's gross receipts. When Western Union did not pay, City sued. The trial court entered judgment for Western Union, which this court affirmed. City of St. Louis v. Western Union Telegraph Co., 760 S.W.2d 577 (Mo.App. E.D.1988).

In 1990, Western Union sold its access transmission services to MCI. This sale included Western Union's access transmission services' physical assets, contracts, and agreements in St. Louis. Neither Western Union nor MCI advised City of this sale, which included MCI's right to use the Western Union name and logo.

In 1991, City enacted the ordinance which gives rise to this dispute. It regulates the communications transmission system in connection with City's public streets and rights-of-way. The ordinance requires corporations to obtain a license and to pay certain fees. MCI did not comply with the ordinance and City refused to issue construction permits to it. This litigation resulted.

CITY'S APPEAL

I. Expiration Provision in 1896 Ordinance

In its first point, City alleges the trial court "erred as a matter of law in deciding that the parties waived the expiration provision" in the 1896 ordinance. The expiration provision is contained in § 604-P and provides that the "rights, privileges and powers conferred and authorized by this [ordinance] shall cease and determine and become null and void" on April 15, 1940.

In its findings of facts and conclusions of law, the trial court stated:

Notwithstanding the termination provisions of Section P-604 of Ordinance 18680, the Court concludes that the conduct of the parties during the succeeding 50 years clearly establishes that [1896] Ordinance 18680 is a permanent modification of [1881] Ordinance 11604, and § 604-P has been waived by both parties. See Hook v. Bowden, 144 Mo.App. 331, 128 S.W. 261 (1910). (emphasis, brackets, and dates added).

We first observe that MCI does not contend that City did not have authority to impose a 45-year limit on the rights given to Western Union or that the limitation was unreasonable. Cities have the right to impose reasonable conditions in its ordinances. Moreover, where, as here, the corporation seeking the right "agreed to the conditions which the city imposed, [it] is estopped from now saying the conditions are not reasonable." See In re Topping Avenue, 187 Mo. 146, 86 S.W. 190, 192 (Div. 2 1905).

We next observe that in its petition, MCI did not plead waiver of § 604-P of the 1896 ordinance. Although the petition identifies the 1896 ordinance, MCI did not plead that it claims any benefits from it. Rather, throughout its petition, MCI alleges it operates in the City pursuant to the 1881 ordinance and that it "enjoys the rights, benefits and privileges of the 1881" ordinance.

Moreover, in City's post-trial brief for the trial court, it argued that MCI's right to install or use conduit free of charge expired in 1940. In reply, MCI did not argue waiver of that provision. Rather, it contended that the 1896 ordinance, and its 1940 expiration date, "in no way impacted or undermined [MCI's] rights under the 1881 [ordinance] to use City rights-of-way without charge."

We turn now to the merits of City's point that it did not waive the 1940 expiration date. Waiver is founded upon the intentional relinquishment of a known right. Brown v. State Farm...