N. Fork Special Serv. Dist. v. Bennion

• Decision Date: 04 January 2013
• Docket Number: No. 20111026–CA.,20111026–CA.
• Citation: 725 Utah Adv. Rep. 22,297 P.3d 624
• Parties: NORTH FORK SPECIAL SERVICE DISTRICT, Plaintiff and Appellee, v. Robert BENNION, Defendant and Appellant.
• Court: Utah Court of Appeals

297 P.3d 624

725 Utah Adv. Rep. 22

NORTH FORK SPECIAL SERVICE DISTRICT, Plaintiff and Appellee,

v.Robert BENNION, Defendant and Appellant.

No. 20111026–CA.

Court of Appeals of Utah.

Jan. 4, 2013.

Jeffrey T. Colemere and Brady T. Gibbs, Attorneys for Appellant.

Kasey L. Wright and Melissa K. Mellor, Attorneys for Appellee.

Judge CAROLYN B. MCHUGH authored this Opinion, in which Judges JAMES Z. DAVIS and J. FREDERIC VOROS Jr. concurred.

McHUGH, Judge:

¶ 1 Robert Bennion appeals from the trial court's entry of summary judgment in favor of the North Fork Special Service District (the District) for past due service fees and interest charges that exceed $200. Bennion also challenges the trial court's award of attorney fees under Utah Code section 78B–5–825. SeeUtah Code Ann. § 78B–5–825 (LexisNexis 2012). We vacate the judgment and remand for the entry of a new judgment consistent with this opinion.

BACKGROUND

¶ 2 At all times relevant to this action, Bennion owned residential property located within the District's service boundaries, the District provided him with water, fire protection, and garbage collection services, and it routinely sent Bennion quarterly invoice statements. Sometime in early 1998, the lateral water line (the Bennion Line) between Bennion's property and the District's main water line (the Main Line) began to develop serious leaks, and the District informed Bennion that it was his duty to repair it. In response, Bennion stopped using the property, closed the valve where the water enters the Bennion Line, and notified the District that he no longer wished to receive water. Despite that request, the District continued to send water to the Bennion Line in order to provide water to other customers who had connected to the Bennion Line.¹ Bennion has refused to pay the District for any service fees after 1998.

The 1998 Case

¶ 3 Shortly after Bennion closed the valve to the Main Line, a neighbor who received water from the District through the Bennion Line filed suit seeking an injunction barring Bennion from shutting off the water (the 1998 Case). Bennion counterclaimed, seeking an injunction against the neighbor's use of the Bennion Line. In addition, Bennion joined the District as a third-party defendant and sought an injunction preventing it from using the Bennion Line to deliver water to its other customers. The trial court issued a temporary restraining order preventing Bennion from shutting off the water. It also struck Bennion's pleadings and dismissed his claims for injunctive relief with prejudice as a discovery sanction. Bennion did not appeal that decision.

The 2002 Case

¶ 4 On March 29, 2002, the District sued Bennion for overdue charges, including excess water fees for the leaked water, which were calculated according to a graduated scale for usage above 5,000 gallons per month (the 2002 Case). Bennion filed a counter-claim for damages, which the 2002 court dismissed in 2004 for failure to file a notice of claim as required by the Governmental Immunity Act and, because the claims could have been brought in the 1998 Case, they were barred by res judicata. Subsequently, on November 10, 2005, the 2002 court granted partial summary judgment and awarded the District base user fees and accrued interest for the period of January 1, 1997, through January 25, 2002. After a bench trial on October 10, 2008, the 2002 court ruled that Bennion was responsible for maintenance of the Bennion Line and for the excess water fees, “regardless of whether [Bennion] actually uses such water or whether the water is lost through leaks located in the [Bennion Line].” The 2002 court reasoned that Bennion was “the owner of the [Bennion Line]” and “that [Bennion] prohibited [the District] from placing a meter on the [Bennion Line] that would have more accurately determined how much water was actually used by [Bennion].” The court ordered Bennion to pay for the excess water fees accrued between November 1, 1997, and May 1, 1998, plus interest and attorney fees. Bennion appealed the 2002 court's decision, which we dismissed due to Bennion's failure to file a timely notice of appeal. See North Fork Special Serv. Dist. v. Bennion, 2006 UT App 447U, 2006 WL 3097171 (mem.).

The 2006 Case

¶ 5 On May 25, 2006, the District brought a condemnation action against Bennion to establish an easement across Bennion's property for the purpose of constructing a waterline to service the District's other customers (the 2006 Case). On September 22, 2006, the 2006 court determined that the Bennion Line was “leaking and losing hundreds of gallons of water each week.” Therefore, it granted the District immediate occupancy of a portion of Bennion's property to construct a new waterline or repair the existing one. Bennion petitioned for interlocutory appeal, which we denied.

The Current Case

¶ 6 On February 29, 2008, the District filed another complaint against Bennion to collect base user fees, excess user fees, and interest associated with water taken from the Bennion Line since March 31, 2002, and seeking $250,000 in punitive damages (the Current Case). Bennion answered the complaint and filed a Motion to Dismiss, arguing that the District was not entitled to punitive damages and that the District's claims were barred by the applicable statute of limitations. After a hearing on August 25, 2008, the trial court dismissed the District's claim for punitive damages and ruled that a four-year statute of limitations applied, effectively prohibiting the District from recovering any fees or interest incurred prior to February 28, 2004. It also ordered the parties to provide supplemental briefing as to the applicability of Utah Code section 17B–1–904, which limits the amount a local district can collect for past due fees.

¶ 7 In response, Bennion filed a supplemental memorandum claiming that because his property is residential, Utah Code section 17B–1–904 limits the total amount the District could recover to $200. Bennion argued that by adopting Utah Code section 17D–1–106, which became effective on May 8, 2008, the Utah Legislature intended for the $200 recovery limit on local districts to apply retroactively to special service districts. The District argued that there was no retroactive effect. After briefing was complete, and without seeking permission, Bennion filed a supplemental reply memorandum outlining the legislative history of the relevant code sections and arguing, for the first time, that Utah Code section 17B–2–804, the predecessor statute to section 17B–1–904, limited the District's recovery to no more than $200 for the period from its effective date of May 3, 2004, to when it was repealed and replaced by section 17B–1–904 on April 30, 2007.

¶ 8 On September 25, 2008, the trial court ruled that the District's recovery was not limited to $200 because “[a]lthough, as noted by [Bennion], section 17B–1–904 was enacted in 2004,² it did not apply to special service districts until May 5, 2008 when section 17D–1–106 was enacted, which was approximately two months after the case was filed by [the District].” The court further explained,

In the absence of language in the statute showing an intent on the part of the legislature that section 17D–1–106 should be applied retroactively to make section 17B–1–904 and other sections applicable to special service districts, the court declines to apply it retroactively to cap [the District's] service fee damages to $200.

In denying Bennion's Motion to Dismiss, the court did not address whether section 17B–2–804 limited the District's fees to $200 during the period of May 3, 2004, to April 30, 2007, when that statute was in effect. It also did not consider whether section 17B–1–904 limited the amount of interest that could accrue after its effective date.

¶ 9 On May 19, 2010, the District filed a Motion for Summary Judgment and supporting memorandum claiming that Bennion was liable for base user fees and excess water fees for the period from February 28, 2004, through March 31, 2009. The District also sought interest on those fees for the period between April 30, 2004, through May 14, 2010. Finally, the District alleged that it was entitled to attorney fees pursuant to Utah Code section 78B–5–825. In support of its fees claim, the District argued that it was “forced to pursue litigation for over eight years in an attempt to” obtain delinquent fees and that, in light of the prior judgments against him, Bennion's defense of the Current Case constituted bad faith.

¶ 10 Bennion responded to the District's Motion for Summary Judgment with a memorandum in opposition (the Opposition Memorandum), which disputed that he had acted in bad faith. Additionally, Bennion argued that summary judgment was improper as a matter of law because both sections 17B–2–804 and 17B–1–904 applied to the Current Case, during different time periods. The District filed a motion to strike portions of the Opposition Memorandum, including Bennion's arguments regarding sections 17B–2–804 and 17B–1–904. It asserted that these arguments should be stricken because they had “already been briefed by the parties, and this Court signed a decision on October 1, 2008, rejecting [Bennion's] arguments related to Utah Code [section] 17B–1–904.”

¶ 11 After a hearing on June 8, 2011, the trial court granted summary judgment and struck Bennion's statutory arguments as redundant. Although the motion was one for summary judgment, on October 13, 2011, the trial court issued “Findings of Fact and Conclusions of Law on Plaintiff's Motion for Summary Judgment.” In the “Findings of Fact” section, the trial court stated that Bennion was the owner of the Bennion Line and that he was responsible for its maintenance. The court also stated as a finding of fact that Bennion owed base user fees in the amount of $3,711; excess water fees in the amount of $95,330 for the period between February 28, 2004, through March 31, 2009; and interest at the rate...