Sebastian Lake Public Utility Co., Inc. v. Sebastian Lake Realty

Decision Date17 June 1996
Docket NumberNo. 96-167,96-167
Citation325 Ark. 85,923 S.W.2d 860
PartiesSEBASTIAN LAKE PUBLIC UTILITY COMPANY, INC., Appellant, v. SEBASTIAN LAKE REALTY, et al., Appellees.
CourtArkansas Supreme Court

John W. Settle, Fort Smith, for appellant.

Jack Skinner, Greenwood, for appellees.

ROAF, Associate Justice.

Sebastian Lake Public Utility Company, Inc., appeals from an order granting summary judgment in favor of the appellees, Sebastian Lake Realty and John's Jiffy Stop, Inc. In granting the summary judgment, the chancellor ordered the South Sebastian County Water Users Association, Inc., to provide water service to the appellees. The trial court further concluded that, as a matter of law, the appellant, which had been providing water to the appellees, did not have an exclusive franchise for the delivery of water service to any area in Sebastian County, Arkansas. We affirm.

On October 4, 1994, John's Jiffy Stop and Sebastian Lake Realty, operators of a convenience store and apartment complex, filed a complaint against South Sebastian County Water Users Association (Association) alleging that they operated businesses in Sebastian County and that the Association was a public utility that provided water service to Sebastian County. The complaint further alleged that the Association had refused to provide water service to the appellees despite the fact that its water line was within a hundred feet of the appellees' businesses. The appellees asserted that the actions of the Association were arbitrary and capricious, in violation of Ark.Code Ann. § 23-3-114 which prohibits a utility from subjecting any corporation to any unreasonable prejudice or disadvantage, in violation of the statutes of the United States, and in violation of the rules and regulations of the United States Farmers Home Administration. The appellees alleged that they had no adequate remedy at law, and they sought a mandatory injunction requiring the Association to furnish them water service.

In its answer, the Association alleged that the appellees did not need water because they were being supplied water from the appellant, Sebastian Lake Public Utility Company, Inc. (Public Utility). The answer provided that the Public Utility purchased its water from the Association pursuant to a water purchase contract dating from November 18, 1968. The Association admitted that it sells surplus water to the Public Utility which then sells water to individual consumers in the Sebastian Lake community.

On May 26, 1995, the Public Utility filed a motion to intervene, alleging that it had a franchise recognized by the Public Service Commission (PSC) to supply water in the area where the appellees' convenience store and apartment complex were located, and that its contract with the Association would be contravened if the Association was ordered to supply water directly to the appellees. The trial court granted the Public Utility's motion to intervene.

On July 6, 1995, the appellees moved for summary judgment. They asserted that it was undisputed that the Association refused to supply water to them and that the Association's water lines were within close proximity to their businesses. The appellees further contended that the Public Utility was no longer regulated by the PSC, that the Public Utility had not been awarded an exclusive franchise, and that they were entitled to judgment as a matter of law.

Subsequently, the Public Utility also moved for summary judgment, asserting that it was undisputed that the PSC granted it a certificate of convenience and necessity to provide water to the area known as Sebastian Lakes in which the appellees' property was located. The Public Utility contended that it was granted an exclusive right to construct, operate, and maintain a waterworks system in the area pursuant to the certificate. The Public Utility further asserted that even though its rates were no longer subject to approval by the PSC, the certificate of convenience and necessity remained in effect because it had never been revoked by the PSC.

In granting summary judgment, the chancellor concluded that the Public Utility did not have an exclusive franchise to provide water service within the geographic area of Sebastian Lake Estates. The trial court further concluded that it was undisputed that the Public Utility was a Class C public utility which was no longer regulated by the PSC by virtue of Act 37 of the First Extraordinary Session of 1987. The trial court stated that if it held that the Public Utility had an exclusive and unregulated franchise, the appellees would be left in the untenable position of having neither bureaucratic redress for their complaints nor the ability to seek better service in the market place. The trial court also found that when the General Assembly deregulated Class C water utilities in 1987, it nullified by implication any exclusive franchise which may have otherwise been in existence for such a utility pursuant to a certificate of public convenience and necessity.

1. Standing

We first consider whether the Public Utility has standing to bring this appeal. The appellees contend that because the chancellor did not order the Public Utility to do anything, or prohibit it from doing anything, it consequently does not have standing to appeal the decision of the trial court. We hold, however, that the Public Utility is an aggrieved party, and as such, has standing to raise an issue on appeal. See McDonald's Corp. v. Hawkins, 315 Ark. 487, 868 S.W.2d 78 (1994). In reaching its decision, the trial court interpreted the Public Utility's certificate of public convenience and necessity and held that it did not have an exclusive franchise. Although the Public Utility was not "ordered" to do anything, the trial court's decision impaired its economic interests. Further, the Public Utility was allowed to intervene, and the appellees have not appealed that decision.

2. Summary Judgment

The standard for appellate review of a summary judgment is whether the evidentiary items presented by the moving party in support of the motion left a question of material fact unanswered and, if not, whether the moving party is entitled to judgment as a matter of law. Baker v. Milam, 321 Ark. 234, 900 S.W.2d 209 (1995). We view all proof in the light most favorable to the party opposing the motion, resolving all doubts and inferences against the moving party. Id. However, when the movant makes a prima facie showing of entitlement to summary judgment, the respondent must meet that proof with proof showing a genuine issue as to a material fact. Id.

In determining that the appellees were entitled to summary judgment as a matter of law, the trial court considered certain provisions of Title 23 of the Arkansas Code, which addresses Public Utilities and Regulated Industries. Chapter 3 of Title 23 is entitled "Regulation of Utilities and Carriers Generally." Arkansas Code Annotated § 23-3-201(a) (1987) provides:

No new construction or operation of any equipment or facilities for supplying a public service, or extension thereof, shall be undertaken without first obtaining from the commission a certificate that public convenience and necessity require, or will require, such construction or operation.

Commission is defined as "the Arkansas Public Service Commission or the Arkansas Transportation Commission with respect to the particular public utilities and matters over which each commission has jurisdiction." Ark.Code Ann. § 23-1-101(6) (Supp.1995).

On October 9, 1964, the PSC entered an order regarding an application for a certificate of convenience and necessity filed by the Public Utility. The order provided that the...

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9 cases
  • United Ins. Co. of America v. Murphy
    • United States
    • Arkansas Supreme Court
    • February 12, 1998
    ...to such a severe penalty. They did not make this constitutional argument below; therefore, it is waived. Sebastian Lake Pub. Util. v. Seb. Lake Rlty., 325 Ark. 85, 923 S.W.2d 860 (1996). 3. Burden of Appellants further allege that the trial court erred in instructing the jury that they had ......
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    ...and thus has standing to appeal if the trial court's order has impaired his economic interests. Sebastian Lake Pub. Util. Co. v. Sebastian Lake Realty, 325 Ark. 85, 923 S.W.2d 860 (1996). Even though appellant has no present property interest in the lots that were replatted, he remains aggr......
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    ...on appeal will not be addressed. See, e.g., Houston v. Knoedl, 329 Ark. 91, 947 S.W.2d 745 (1997); Sebastian Lake Pub. Util. Co. v. Sebastian Lake Realty, 325 Ark. 85, 923 S.W.2d 860 (1996). Appellants also contend that the decedent did not have an interest in the crops when he died, theref......
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    ...and thus has standing to appeal if the trial court's order has impaired his economic interests. Sebastian Lake Pub. Util.Co. v. Sebastian Lake Realty, 325 Ark. 85, 923 S.W.2d 860 (1996). Even though appellant may have no present property interest in the lots that were replatted, he remains ......
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