Sophian Plaza Ass'n v. City of Kan. City

• Decision Date: 06 November 2018
• Docket Number: WD80678
• Parties: SOPHIAN PLAZA ASSOCIATION, et al., Respondents, v. CITY OF KANSAS CITY, MISSOURI, Appellant.
• Court: Missouri Court of Appeals

SOPHIAN PLAZA ASSOCIATION, et al., Respondents, v. CITY OF KANSAS CITY, MISSOURI, Appellant.

WD80678

MISSOURI COURT OF APPEALS WESTERN DISTRICT

November 6, 2018

Appeal from the Circuit Court of Platte County

The Honorable James W. Van Amburg, Judge

Before Division Two: Karen King Mitchell, C.J., and Alok Ahuja and Edward R. Ardini, Jr., JJ.

In 1976, the Circuit Court of Platte County entered a judgment requiring the City of Kansas City to provide trash collection services to multi-unit apartment buildings and trailer parks, or to make cash payments to the owners of those facilities if the City did not provide trash collection. The City paid trash rebates to property owners for more than thirty years, but discontinued the rebate program in 2010. After the City terminated the rebate program, the Class Plaintiffs¹ sued the City in the Circuit Court of Platte County for breach of contract and contempt of court. The circuit court certified the case as a class action, and conducted a bench trial. The court found that the City had willfully violated the 1976 judgment, and that class members had suffered damages of $10,274,704.00. The court also awarded attorney's fees to the plaintiffs' attorneys in the amount of $4,109,881.60,with $1,421,598.06 to be paid by the City in addition to the compensatory damages award, and the remainder to be paid from the class recovery.

The City appeals. We affirm.

Factual Background

On January 15, 1971, the City of Kansas City enacted an ordinance providing for the collection of solid waste from all residences. City Code § 16.20(a) provided, however, that the City would not collect "residential refuse from trailer parks or buildings containing seven or more dwelling units."

In 1974, two groups of Kansas City apartment building owners sued the City in the Circuit Court of Platte County, alleging that City Code § 16.20(a) was unconstitutional. In 1975, owners of trailer parks filed a similar lawsuit. All three suits were pleaded as class actions. The circuit court consolidated the three actions.

On February 20, 1976, the court entered an order finding § 16.20(a) unconstitutional because the discrimination against trailer parks and multi-unit residential buildings constituted an arbitrary and unreasonable classification. The court also found, however, that "the collection of refuse . . . is a governmental function for which the City cannot be held to answer for damages."

Both the plaintiffs and the City appealed to the Missouri Supreme Court from the circuit court's February 20, 1976 order.

On April 7, 1976, the circuit court entered judgment in the consolidated cases. The judgment recited that the court's February 20, 1976 order was not intended as a final disposition, because the plaintiffs' request for permanent injunctive relief remained pending. The judgment recited that,

It was the Court's hope that with the position of the Court being known through its Order that the parties might be able to arrive at a satisfactory solution to the trash collection problem. It has now become apparent that the parties are unable to do so and the Court must now enter its Judgment reaching the final issue as to whether or not a Mandatory Injunction should be issued.

The judgment declared that City Code § 16.20(a) "is unconstitutional and invalid." The court also entered an injunction "directing the City of Kansas City, Missouri to provide refuse collection services to the plaintiffs unless and until the City enacts a valid ordinance which establishes a reasonable and justifiable classification for those persons who are not entitled to refuse collection by the City." The judgment repeated the court's earlier conclusion that "the City is not liable to the plaintiffs for damages since the collection of trash and refuse is a governmental function."

On May 5, 1976, counsel for the City advised the court that

the City Council and City Manager have expressed their preference to working out some system for the collection of all residential refuse in the city, after a reasonable interval for formulating and implementing a program therefor, and for arranging the necessary financing, with the understanding that, when this shall have been accomplished, the perfection of the appeals noticed in the above matters will ultimately be abandoned by the parties. We have some reason to believe that such an arrangement can be worked out with the plaintiffs.

On August 31, 1976, the City and the plaintiffs entered into a "Stipulation and Agreement" to resolve the pending lawsuits. The Stipulation recited that

The parties have agreed that the City will either (a) furnish refuse services to all buildings containing seven or more dwelling units and to all trailer parks containing dwelling units, located in Kansas City, or (b) make cash payments to the owners of such buildings and trailer parks in lieu of such services.

The Stipulation defined "Owners" as "the owners or authorized managing agents of the owners of apartment buildings containing seven or more dwelling units and the owners or authorized managing agents of trailer parks located within the City of Kansas City, Missouri." The Stipulation provided that, beginning on February 1, 1977, "the City shall either provide [refuse-collection] services² todwelling units of the owners or pay $1.15 per month per occupied dwelling unit to owners in lieu of providing services," "provided . . . that such owners at the time of such payments are providing [refuse-collection] services to the dwelling units in their buildings or trailer parks." The Stipulation provided for periodic future adjustments to the amount of the per-unit rebate payment, based on the City's cost for providing trash service to other residences.

The Stipulation also provides that, "[i]f the City terminates city-wide services to privately-owned dwelling units," then "the City shall have no further obligation hereunder to make the cash payments or to provide direct [refuse-collection] services."

The Stipulation included a provision whereby "[t]he parties jointly request the Court to incorporate this Stipulation and Agreement in a judgment entered herein and to make compliance with the provisions hereof mandatory." Upon entry of the requested judgment, the parties agreed "to dismiss any appeals presently pending based on this [sic] subject matter of this suit and refrain from hereafter entering any appeals from such judgment."

Based on the parties' request, the circuit court entered a Modified Judgment on September 1, 1976, which incorporated the terms of the Stipulation and Agreement. The Modified Judgment noted that the Stipulation and Agreement proposed "a system of cash payments or refuse services for the properties of plaintiffs and others similarly situated." The court stated that the Stipulation resolved "the refuse collection problem" in a manner "satisfactory to the Court as well as to the parties, particularly since it extends beyond the issues herein to address the matter on a city-wide basis, providing just and equitable relief not only to the plaintiffs, but also to owners of similarly situated properties not parties in this litigation."

The Modified Judgment repeated the court's earlier declaration that City Code § 16.20(a) was unconstitutional. The court entered a mandatory injunction "directing the City of Kansas City to provide refuse collection services, or the cash equivalent thereof, to the properties of the plaintiffs and to the properties of others similarly situated, and to dwelling units located in trailer parks, under the terms and conditions specified in the Stipulation and Agreement filed herein." The Modified Judgment again refused to award plaintiffs any compensatory damages based on the City's failure to provide trash collection services in the past, on the basis that the provision of refuse collection services was a governmental function for which the City could not be held liable for damages.

After the entry of the Modified Judgment, the parties dismissed their appeals of the February 20, 1976 order. The City also amended its refuse collection ordinances, effective December 1, 1977, to incorporate the language and intent of the Stipulation and Modified Judgment.

For over thirty years following the entry of the Modified Judgment, the City made trash rebate payments to the owners and managers of multi-dwelling-unit buildings, including condominium associations, and to the owners of trailer parks. In response to budgetary issues in 2008, the City Council initially proposed elimination of the trash rebate program. The program was not immediately terminated, however. Instead, on January 28, 2010 the City adopted Ordinance No. 080935, as amended, effective May 1, 2010, which effectively eliminated the trash rebate program through repeal of City Code §§ 62-41(a)(3) and 62-42.

The trash rebate program was not discontinued with respect to all multi-unit building owners, however. Between 2008 and 2010, the Heartland Apartment Association, an organization representing the owners of approximately 40,000 apartment units in Kansas City, negotiated a settlement with the City under which the trash rebate program would continue with respect to the dwelling units ownedby Heartland's members. The settlement between the City and Heartland was documented in a Settlement Agreement entered on March 2, 2010.

The Heartland Settlement Agreement recited that the City's creation and maintenance of a city-wide trash rebate program, applicable to all owners of multi-unit buildings, was mandated by the 1976 Stipulation and Agreement, and by the Modified Judgment. Thus, the Heartland Settlement Agreement stated that, in the 1976 Stipulation, the parties agreed that "as long as the City provides city-wide collection and removal services, the City shall provide residential collection and removal services to the dwellings excluded by City Code § 16.20(a) or pay a certain amount per month in lieu of such services." The...