Metro. St. Louis Sewer Dist. v. City of Bellefontaine Neighbors

• Decision Date: 24 February 2015
• Docket Number: ED101713
• Parties: METROPOLITAN ST. LOUIS SEWER DISTRICT, Appellant, v. CITY OF BELLEFONTAINE NEIGHBORS, et al., Respondents.
• Court: Missouri Court of Appeals

METROPOLITAN ST. LOUIS SEWER DISTRICT, Appellant, v. CITY OF BELLEFONTAINE NEIGHBORS, et al., Respondents.

ED101713

Missouri Court of Appeals Eastern District DIVISION THREE

February 24, 2015

Appeal from the Circuit Court of St. Louis County

13SL-CC03760

Honorable Mark D. Seigel

Introduction

This case involves a construction error during the City of Bellefontaine Neighbors' (City) street improvement project that resulted in damage to Metropolitan St. Louis Sewer District's (MSD) sewer lines under the street. The issues are whether one political subdivision may sue another political subdivision for inverse condemnation and whether sovereign immunity applies in a tort action between two such entities. MSD appeals the trial court's dismissal of all of its claims against the City. MSD argues that its petition properly stated claims in inverse condemnation, negligence, and trespass against the City for the cost of replacing sewer lines damaged by the City's street project. We would affirm in part and reverse in part, but because of the general interest andimportance of the question presented, we transfer this case to the Missouri Supreme Court pursuant to Rule 83.02.¹

Background

According to MSD's petition, in 2009, the City undertook a street improvement and resurfacing project (Project). The City hired P.H. Weis & Associates, Inc., d/b/a Weis Design Group (Weis) as the engineer for the Project, and Sherrell Construction, Inc. (Sherrell) as the general contractor. Lift Rite, Inc. (Lift Rite) performed mudjacking services for the Project. Mudjacking consists of pumping a pressurized, concrete-like slurry into voids beneath streets and other concrete slabs.

During this mudjacking process, slurry flowed into MSD's sewer lines, instead of the voids under the street. The slurry hardened inside MSD's sewer lines, causing those lines to be out of service until MSD repaired or replaced them. The total cost of restoring the damaged sewer lines was $66,860.25.

MSD filed suit against the City, Weis, Sherrell, and Lift Rite to recover this sum. MSD asserted claims of trespass (Count I) and negligence (Count II) against Weis, Sherrell, and Lift Rite. In Count III, MSD raised a claim of inverse condemnation against the City. The City moved to dismiss Count III, arguing MSD lacked standing to bring an inverse condemnation action against the City, because MSD is a political subdivision and the City has no power of eminent domain over property already devoted to public use. The City also argued MSD did not plead an affirmative act by the City that damaged MSD's property. The trial court granted the City's motion to dismiss Count III.

MSD sought leave to file an amended petition, which the trial court granted. MSD's first amended petition expanded the factual pleadings to include several acts bythe City, including supervising and directing Weis and Sherrell, participating in planning conferences regarding the Project, and coordinating with MSD and other utilities to avoid damage to any utility systems. MSD's first amended petition reasserted Count III for inverse condemnation against the City, and also joined the City as a defendant on Counts I and II for trespass and negligence, respectively.

The City again moved to dismiss MSD's petition, raising the same arguments regarding Count III and asserting sovereign immunity and lack of a tortious act by the City regarding Counts I and II. The trial court granted the City's motion to dismiss, removing the City as a defendant from the suit.² This appeal follows.

Standard of Review

"A motion to dismiss for failure to state a cause of action is solely a test of the adequacy of the plaintiff's petition." City of Lake St. Louis v. City of O'Fallon, 324 S.W.3d 756, 759 (Mo. banc 2010) (quoting Reynolds v. Diamond Foods & Poultry, Inc., 79 S.W.3d 907, 909 (Mo. banc 2002)) (internal alteration omitted). In ruling on such a motion, a court views the facts alleged in the petition as true and grants all reasonable inferences in favor of the plaintiff, determining whether the petition sufficiently alleges facts that meet the elements of a recognized cause of action. City of Lake St. Louis, 324 S.W.3d at 759.

We review a trial court's grant of a motion to dismiss de novo. Id. We consider only the grounds raised in the motion to dismiss, and we do not consider matters outside the pleadings. Id.Point I

MSD contests the trial court's dismissal of its claim of inverse condemnation. The trial court did not specify its grounds for dismissal, but one of the grounds raised in the City's motion to dismiss is dispositive. The issue is whether one political subdivision has standing to bring a claim of inverse condemnation against a municipality, another political subdivision. The City argues that MSD lacks standing to bring such a claim because as a political subdivision, MSD operates sewer lines that are already devoted to public use, and the City has no power to condemn such property. MSD argues that the City's power of eminent domain does extend to public property, and therefore a corresponding action in inverse condemnation is available to MSD for damage caused by the City during the Project.

First, the power of eminent domain "is inherent in the sovereignty of the state[, but] does not inhere naturally in municipalities." City of Smithville v. St. Luke's Northland Hosp. Corp., 972 S.W.2d 416, 420 (Mo. App. W.D. 1998) (citing State ex rel. Mo. Cities Water v. Hodge, 878 S.W.2d 819, 820 (Mo. banc 1994)). A municipality's power of eminent domain must be delegated by the state legislature. Id. Here, the City's power of eminent domain comes from Section 88.667,³ which allows the City to take "private property . . . for public use," for several enumerated purposes, "and for any other necessary public purposes."

Further, a city also has the power to condemn property already devoted to public use, but only where the city's proposed use does not conflict with the existing public use. See Hodge, 878 S.W.2d at 821 (noting "significant body of Missouri law has addressed the issue of when condemnation of public property may occur for a new and differentpublic use").⁴ On the other hand, if the proposed use "would destroy the previous 'necessary' use, specific legislative delegation is required." Id. at 822; see also City of Smithville, 972 S.W.2d at 418 (finding statutory authority required where city's use would destroy previous use).

Balancing a city's power of eminent domain is the constitutional protection for landowners' property rights that "private property shall not be taken or damaged for public use without just compensation." MO. CONST. art. I, sec. 26. This provision is self-enforcing, such that a party may bring an action directly under it. Zumalt v. Boone County, 921 S.W.2d 12, 14 (Mo. App. W.D. 1996). Where a city does not initiate formal condemnation proceedings, but nevertheless appropriates or damages property through the course of some city project, inverse condemnation is the cause of action through which to raise a violation of article I, section 26. State ex rel. City of Blue Springs v. Nixon, 250 S.W.3d 365, 371 (Mo. banc 2008); see also Heins Implement Co. v. Mo. Highway & Transp. Comm'n, 859 S.W.2d 681, 693 (Mo. banc 1993), abrogated on other grounds by Southers v. City of Farmington, 263 S.W.3d 603 (Mo. banc 2008). Additionally, because inverse condemnation is based on the constitution, sovereign immunity does not apply. Clay County Realty Co. v. City of Gladstone, 254 S.W.3d 859, 866 (Mo. banc 2008).

Though it is well established that inverse condemnation is an enforcement of this protection against the taking or damage of private property, here we face a situation in which a city project damaged property devoted solely to public use, and we mustdetermine whether the same protection is available. There is no precedent in Missouri for including public property under the blanket of the state constitutional protection for private property.

MSD argues that we should find its property is included on the basis of the United States Supreme Court's decision in United States v. 50 Acres of Land, 469 U.S. 24 (1984). In that case, the Court concluded that "the same principles of just compensation presumptively apply to both private and public condemnees," under the Fifth Amendment, which prohibits the federal taking of private property without just condemnation. Id. at 31. However, the Court also gave this rationale for its finding:

When the United States condemns a local public facility, the loss to the public entity, to the persons served by it, and to the local taxpayers may be no less acute than the loss in a taking of private property. Therefore, it is reasonable to construe the reference to "private property" in the . . . Fifth Amendment as encompassing the property of state and local governments when it is condemned by the United States.

Id. (emphasis added). Thus, the Court analogized the federal government's taking of local taxpayer-funded property to the taking of a private individual's property.⁵

The Missouri Supreme Court has made the protection of private property rights under the Missouri Constitution paramount, even where a public utility holds a private property right. See St. Charles County v. Laclede Gas Co., 356 S.W.3d 137, 139-40 (Mo.banc 2011) (finding utility company held easement for use of public road for gas lines, easement is private property right that county may not take without just compensation, thus county had to reimburse utility company for cost to relocate gas lines due to widening of county road). In view of Laclede Gas, it is likely that our Missouri Supreme Court would logically extend inverse condemnation in Missouri to protect public property from damage by a city project, especially where, had the same project damaged a private landowner's property, an action for compensation under inverse condemnation is readily available with no obstacle of sovereign immunity....