United Council of Loxley, Inc. v. City of Loxley

• Decision Date: 25 April 1986
• Citation: 489 So.2d 538
• Parties: UNITED COUNCIL OF LOXLEY, INC., Obed Gandy, and Ennis Edwards v. The CITY OF LOXLEY, Alabama, et al. 84-13.
• Court: Alabama Supreme Court

Page 538

489 So.2d 538

UNITED COUNCIL OF LOXLEY, INC., Obed Gandy, and Ennis Edwards v. The CITY OF LOXLEY, Alabama, et al.

84-13.

Supreme Court of Alabama.

April 25, 1986.

Rehearing Denied May 23, 1986.

Henry Brewster and Rebecca Wolf of Legal Services Corp., of Alabama, Bay Minette, for appellants.

Fred K. Granade of Stone, Partin, Granade & Crosby, Bay Minette, for appellees.

ALMON, Justice.

This appeal arises from a suit against the City of Loxley, its mayor, and its council members, regarding the city's extension of its water system to several residential areas outside the city limits. Plaintiffs allege that the city breached its contract to provide adequate water service. They seek an injunction prohibiting the defendants from refusing to construct a water line sufficient to provide adequate water pressure for household use and fire protection. The trial court granted the defendants' motion for summary judgment.

Plaintiffs Obed Gandy and Ennis Edwards live in Loxley Heights, an unincorporated community approximately one mile west of the corporate limits of Loxley. The United Council of Loxley, Inc., the other named plaintiff, is a charitable corporation formed to educate and foster the civic participation of residents of Beat 9, which includes Loxley Heights and Ellisville, another unincorporated community a mile northwest of Loxley Heights. The United Council also purports to represent residents of the Silverhill Road area, south of Loxley. The water system that Loxley installed in these three areas consisted largely of 2-inch water mains. The evidence indicates that fire hydrants require at least 6-inch mains.

The defendants are the City of Loxley; Jack Ryals, individually and in his capacity as mayor of Loxley; Emmett Middleton, Fred Griffen, J.D. Miller, Lee Valenti, and Tom Fincher, in their capacities as members of the Loxley City Council. ¹

In 1978 or 1979, the city began negotiations with the developers of Plantation Hills, a proposed subdivision eight miles from Loxley, northwest of Loxley Heights and Ellisville, to provide water service for Plantation Hills. The Rosinton Water, Sewer and Fire Protection Authority, Inc., was already authorized, under Code 1975, § 11-88-1, et seq., to provide water to a 110-acre area of Baldwin County surrounding Loxley to the west, north, and east. The City ² of Loxley filed an action which resulted in this Court's deciding that Loxley could expand its water system into the Rosinton service area. Town of Loxley v. Rosinton Water, Sewer and Fire Protection Authority, Inc., 376 So.2d 705 (Ala.1979).

According to the affidavits plaintiffs submitted in opposition to the motion for summary judgment, Ryals, the mayor of Loxley, came to a meeting called by the United Council of Loxley on August 7, 1979, ³ to Later, the city sent employees to the residences to be served by its proposed water system. Both Gandy and Edwards stated in deposition that they signed an agreement to use the city water service and paid a $50 deposit. The complaint alleges that these agents promised that the system would include fire protection. Both Gandy and Edwards stated in deposition that they did not accept the water service after the pipe was laid because they thought the line was too small. Both said they had acceptable sources of water and did not think a 2-inch line would provide sufficient pressure to make it worthwhile to use the city's water. They said they were primarily interested in fire protection.

discuss the proposed expansion of the Loxley water system and to persuade the residents of the affected areas to choose the Loxley water system over the Rosinton system. The affiants stated that Council Richardson, a member of the United Council, asked the mayor if the proposed water system would include fire protection, to which the mayor answered, "Yes," and specifically mentioned fire hydrants and 6-inch pipes. Richardson, in his affidavit, said he told this to Edwards.

By signing the contract to purchase water, Edwards, Gandy, and other residents (including members of the United Council) agreed to connect to the water system, should there be enough applicants to make the project feasible. The contract concluded: "In consideration of the Town using its best efforts to furnish me with water, and other valid considerations, I am voluntarily entering into this contractual agreement."

The complaint alleges that on November 30, 1979, Ryals, as mayor of Loxley, contracted with the developers of Plantation Hills to provide water service to the planned subdivision. On March 5, 1980, the Plantation Hills Home Owners Association filed articles of incorporation which listed Ryals as an incorporator and director. The water system installed by Loxley included an 8-inch pipeline directly to Plantation Hills, but only 2-inch pipe in many of the intermediate areas where the plaintiffs live. Loxley installed 6-inch pipe in other areas surrounding Loxley Heights and Ellisville, including the Wildwood subdivision. There was testimony, however, that the developers of Plantation Hills paid some of the cost of the 8-inch line.

The complaint includes counts for fraud and breach of contract, but plaintiffs argue only the breach of contract count, so we shall address only that count.

The city acted within its authority in contracting to provide the water service. Tucker v. City of Robertsdale, 406 So.2d 886 (Ala.1981). The city may be held liable if it breaches its contract. Hendrix, Mohr & Yardley, Inc. v. City of Daphne, 359 So.2d 792 (Ala.1978); Walker v. City of Birmingham, 342 So.2d 321 (Ala.1976); Bethune v. City of Mountain Brook, 293 Ala. 89, 300 So.2d 350 (1974); Alabama Water Co. v. Wilson, 214 Ala. 364, 107 So. 821 (1926).

The trial court stated that it based its summary judgment on a ruling that the plaintiffs did not have standing to bring the action:

"The Court: Well, as far as those two Plaintiffs are concerned, I am granting a Motion to Dismiss on the failure to state the claim in the original [Rule] 12(b)(6) [, A.R.Civ.P., motion,] which is converted to a summary judgment [motion] once everything else is filed.

"So, the original 12(b)(6) coupled with pleadings and the depositions were converted into a motion for summary judgment.

"Mr. Brewster: Can I ask you what the basis is? Was that due to the contract? What is that to the basis to? [sic]

"The Court: My limited understanding of the law. I just don't believe that it is stated in the claim on which it needs to be granted. [sic] "Mr. Brewster: You can't give us any further keys so we can try to limit the scope of our appeal?

"The Court: I can't and frankly, Henry, I know the facts and the situation in the case but I don't understand the lawsuit from a legal standpoint as far as cause of action. I just don't believe it stated the cause of action.

"Mr. Brewster: That there is no contract or that the parol evidence would not be allowed in?

"The Court: I don't believe a cause of action can decide that, the summary judgment as to the liability of the city just all around--(pause)

"I couldn't see any issue of fact that was left to be resolved. I don't see any other way to reach any other ruling on that.

"Mr. Brewster: So, if the facts were to come out in the trial that the mayor had represented to these individuals and city council members have represented to these individuals that they would receive a six-inch water line and fire hydrant, that they did sign a contract and put up $50 and did make their claims in time and did have standing, even under those situations, there would be no relief on the basis of the contract action?

"The Court: If they had standing.

"Mr. Brewster: No, we are talking about the two individual plaintiffs.

"The Court: Standing in any event. I agree with all the statements you made as far as the summary judgment is concerned except for the standing. And I think the standing argument is a good one and well taken. Just on that basis, applies not only to the representative but also to the named individuals. [sic]

"Mr. Brewster: But these named individuals aren't even part of the United Council block and they are suing simply as individuals.

"The Court: I think the standing argument is well taken as to them, too.

Ms. Wolf: I would like to repeat what Henry just said. As to the two individuals, it is a straight simple contract action.

"The Court: This case is simple?

"Ms. Wolf: Well, I think Henry has been clear and I think Henry has presented everything today."

The court erred in holding that Edwards and Gandy did not have standing to bring the action. See Water Works Board of the City of Birmingham v. Barnes, 448 So.2d 296 (Ala.1983); Alabama Water Co. v. Wilson, supra, Alabama Water Co. v. City of Jasper ex rel. Cain, 211 Ala. 280, 100 So. 486 (1924).

The parties argue in their briefs whether the United Council is a proper party plaintiff. Frazer v. Alabama State Policemen's Association, 346 So.2d 959 (Ala.1977). But see Alabama Hospital Association v. Dillard, 388 So.2d 903 (Ala.1980); and Alabama Optometric Association v. Alabama State Board of Health, 379 F.Supp. 1332 (M.D.Ala.1974). Even if the United Council is not a real party in interest, the defendants are not entitled to judgment on this ground.

"No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest."

Rule 17(a), A.R.Civ.P. An amendment to substitute the real party in interest, where the defendant has had proper notice of the claim, relates back to the original filing. Board of Water and Sewer Commissioners v. McDonald, 56 Ala.App. 426, 322 So.2d 717, ...