State ex inf. Peach, ex rel. City of St. Louis v. Melhar Corp.
| Decision Date | 01 February 1983 |
| Docket Number | No. 44913,44913 |
| Parties | STATE of Missouri ex inf. George PEACH, Circuit Attorney ex rel. CITY OF ST. LOUIS, Relator-Respondent, v. MELHAR CORPORATION, Respondent-Appellant. |
| Court | Missouri Court of Appeals |
Michael Henderson, Oakland, Cal., Rosecan & Kimbrell, St. Louis, for respondent-appellant.
Robert H. Dierker, Jr., Asst. City Counselor, St. Louis, for relator-respondent.
Melhar Corporation appeals from a summary judgment against it. The judgment granted relator a permanent writ in quo warranto ousting Melhar from any rights, privileges and franchises granted to it under Ordinance 55312 of the City of St. Louis and also denied Melhar's counterclaim for declaratory judgment and injunction which sought essentially a declaration of validity of Melhar's franchise. The ordinance in question was enacted and approved in April 1969, and granted to Melhar a 25 year non-exclusive franchise for the construction and operation of a cable television system utilizing the streets and alleys of the City of St. Louis.
Initially Melhar contends that summary judgment may not properly be entered in a quo warranto proceeding to oust a corporation from a franchise. We have been cited to no case which establishes such a broad rule. Rule 98.01 which controls quo warranto proceedings provides that such proceedings shall be "... governed by and conform to the rules of civil procedure and the existing rules of general law on the subject ...." Rule 74.04 provides for summary judgment. Nothing in Rules 98.01 through 98.06 or in the general law makes summary judgment inappropriate in any quo warranto proceeding. Rule 74.04(b) prevents summary judgment from being entered "unless the prevailing party is shown by unassailable proof to be entitled thereto as a matter of law." Such showing is not made if there is "any genuine issue as to any material fact." Rule 74.04(c). It is to be remembered that "[n]ot every factual dispute, however, will bar summary judgment; the dispute must involve a material fact; that is, one which has legal probative force as a controlling issue." Seliga Shoe Stores v. City of Maplewood, 558 S.W.2d 328 (Mo.App.1977) [1-3]. If the requirements of Rule 74.04 are met, summary judgment is fully proper in quo warranto. See, for example, State ex inf. Graham v. Hurley, 540 S.W.2d 20 (Mo. banc 1976).
Melhar contends that three genuine issues of material fact were in dispute, i.e., its intent to abandon the franchise, laches by relator, and the public benefit to be gained by ouster. Analysis of these contentions requires some exposition of the factual background of the controversy.
Prior to passage of the ordinance in 1969, Melhar made a proposal to the City seeking a franchise to install and operate a cable television system throughout the city. One and possibly another company made similar applications. Following public hearings, the franchise was granted to Melhar through Ordinance 55312. The ordinance included the following provisions:
The ordinance also contained provisions requiring specified insurance, bonds, reports, and rules and regulations, some of which were to be filed with the City Register. The ordinance also provided for payment to the City as a franchise fee 6% of the annual gross operating revenues obtained by the Company from sales of television signals within the City. Semi-annual reports of such operating revenues were to be filed with the Comptroller.
Melhar filed a bond with the City but no acceptance of the franchise was ever filed and none of the various reports and other documents required by the ordinance were ever filed. Other than its two principal stockholders, Melvin and Harold Dubinsky, Melhar never had any employees. No cable or wires were ever strung or laid; no cable television service was ever provided by Melhar to any resident of the City of St. Louis. The City received no money under the franchise. On September 26, 1979, the City Counselor wrote Melhar enumerating the failures of performance and stating that if said failures were not cured within 30 days the franchise would be declared forfeited. Melhar made no response to this letter except discussing the matter with the mayor and maybe obtaining a 30 day extension. Based upon this letter, Melhar's accountant wrote off the franchise on the company's books, mistakenly, Melhar now contends. Nothing further was done by the City in regard to Melhar's franchise until this suit was filed on March 31, 1981, when the City became aware that Melhar was seeking excavation permits for installation of cable. On April 30, 1981, the City enacted an ordinance repealing Ordinance 55312. The repealing ordinance listed specifically the failures of performance of Melhar under Ordinance 55312.
Through largely uncontested affidavits, Melhar presented its activities from the enactment of Ordinance 55312 until the filing of suit. At the time of making its proposal to the City to supply cable television service, Melhar planned to use an experienced cable operator (Jerrold) to build the system. This plan was set forth in the proposal. Shortly after the passage of the ordinance, Melhar began preparations to create a cable system. Arrangements with Jerrold foundered, and recognizing its need for expert assistance, Melhar entered into an agreement in December 1971 with Cox Cable Communications. Both Cox and Melhar believed that a successful cable operation required microwave importation of the signal of an independent "superstation" such as WGN in Chicago. Federal Communications Commission "anti-leapfrogging" regulations limited Melhar to importation of one station each from Kansas City and Bloomington, Indiana. In 1972, Melhar requested and obtained a F.C.C. certificate of compliance to operate a cable television system in St. Louis. This certificate was based upon importation of the Bloomington and Kansas City stations and was for a five year period. Certain delays occurred because of construction difficulties in the...
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US v. Slay, 86-67CR(1).
...29.00 at 29-5, 29-6 (1989); 12 E. McQuillin, Municipal Corporations § 34.03 at 11 (3d ed. 1986); see also State ex inf. George Peach v. Melhar Corp., 650 S.W.2d 633, 636 (Mo.App.1983). However, "until an ordinance granting a franchise is accepted, the franchise lacks the essential elements ......