Las Vegas Val. Water Dist. v. Michelas
| Decision Date | 07 April 1961 |
| Docket Number | No. 4339,4339 |
| Citation | 77 Nev. 171,360 P.2d 1041 |
| Parties | , 38 P.U.R.3d 369 LAS VEGAS VALLEY WATER DISTRICT, a quasi-municipal corporation, Appellant, v. Theodore MICHELAS, dba Michelas Water Company, Respondent. |
| Court | Nevada Supreme Court |
McNamee & McNamee, and Franklin Rittenhouse, Las Vegas, for appellant.
Foley Brothers, Las Vegas, for respondent.
Respondent agrees with appellant's statement of the legal issue presented to this court, adding only the last phrase as italicized to appellant's statement of the issue. It is as follows:
'May the Appellant, Las Vegas Valley Water District, supply water service in an area where Respondent may and does already supply water service under a certificate of public convenience and necessity issued by the Nevada Public Service Commission without the payment of just compensation to Respondent?'
Likewise, in pre-trial proceedings, it was ordered, pursuant to stipulation, as follows: 'That the questions of law shall be to determine whether or not the plaintiff may invade the territory so held by franchise by the defendant, or whether it can only invade the territory through the [exercise] of right of eminent domain.'
In the same pre-trial proceedings the court ordered that the Public Service Commission of the State of Nevada might intervene and that its filing of points and authorities would be tantamount to filing a petition in intervention and an order granting intervention. A copy of such order was served upon the Public Service Commission. The commission did not take advantage of the court's order.
We refer to appellant as the Water District and to the respondent as Michelas. The proceedings were initiated in the court below by the complaint of the Water District, alleging that it was a 'quasi-municipal corporation' organized under what is hereafter referred to as the Act of 1947, and engaged in the business of selling water to persons living in the Las Vegas Valley Water District, Clark County, Nevada; that Michelas was engaged in the business of selling water in a portion of the City of Las Vegas and had 'a nonexclusive right' to sell water, said right being issued by the Public Service Commission of Nevada; that there were difficult questions of law pertaining to the rights and duties of the parties and that a declaratory judgment was sought defining same, and for further relief. Michelas answered, alleging that in 1941 he received 'an exclusive right' to operate a water service in the six named blocks of the Meadows Addition to the City of Las Vegas.
As a first counterclaim he alleged that he had expended in excess of $300,000 in the acquisition of pumps, wells, real property, machinery, and other equipment 'for the purpose of serving water users in his exclusive territory'; that the Water District had, with full knowledge of plaintiff's grant from the Public Service Commission knowingly, willfully, and deliberately, without first 'seeking the utilization of the rights' conferred by the Act of 1947, entered upon Blocks 15 and 16 of the said Meadows Addition (for the servicing of which blocks he had obtained a certificate of convenience and necessity from the Public Service Commission), and unlawfully installed water mains and service connections within the area being then serviced by Michelas; the by reason thereof defendant had been damaged in the sum of $28,800, 'the value of the loss of profits directly resulting by reason of plaintiff's illegal acts'; that plaintiff's acts were malicious and in gross and wanton disregard of defendant's rights and privileges, by reason whereof defendant demanded exemplary damages in the sum of $50,000.
As a second counterclaim, Michelas likewise asserted that a controversy existed between the parties; that Michelas had been granted by the commission 'the exclusive right' to furnish water in the disputed area; that the Water District had no right to service such disputed area order than under the Act of 1947; that it had deliberately, willfully, and knowingly neglected and failed to follow the provisions of said act, and that Michelas would suffer irreparable injury unless the Water District should be restrained; that he had no adequate remedy other than injunctive relief. He prayed for a restraining order, $28,000 compensatory damages, $50,000 exemplary damages, and further relief.
Michelas' references to the failure of the Water District to act within the provisions of the Act of 1947 had reference to paragraph 7 of section 1 of said act, reading as follows:
The order of the Public Service Commission relied upon by Michelas, after caption reciting the proceeding, reads as follows:
'It is ordered That the application of Theodore Michelas for a certificate of public convenience and necessity to operate a water service in Blocks 4, 12, 13, 14, 15 and 16 in the Meadows Addition to the City of Las Vegas, be and the same is hereby granted.
'Dated: Carson City, Nevada April 28, 1941'
(1) It is advisable at this point to dispose of the categorical statement of Michelas that the foregoing order vests in him an exclusive franchise to render water service in the area described as against the similar categorical statement by the Water District that this is a nonexclusive franchise. Patently, on its face, the franchise given in the order granting to Michelas a certificate of public convenience and necessity to operate his service in the six blocks described is not exclusive. However, the matter may not so simply be dismissed. Michelas insists that it is exclusive in this sense, namely, that before any other person or corporation may invade the territory described, such person or corporation must likewise obtain from the commission a certificate or permission authorizing such entry, and that to accomplish this a petition would have to be filed, a hearing advertised and held, and that an opportunity for objection be given, to the end that the commission might determine whether the convenience and necessity of the public would be best served by granting such petition; further, that if at such hearing Michelas could show that he had in all respects complied with any and all rules, regulations, and orders of the commission, that the rates charged by him were reasonable, that the services rendered by him in furnishing water adequately supplied the needs of the district involved, that the public convenience and necessity required no further service, that his large investment had been made pursuant to the certificate granted him by the commission, and that he would be irreparably damaged by an unnecessary and unwarranted permit to another applicant, he would be entitled to an order denying such second petition and, in the event of a ruling adverse to him, to have access to the district court and to the supreme court for review.
This contention on behalf of Michelas leads us to the statutes involved. We turn, first then, to what we have referred to as the Act of 1947, and it must be first emphatically stated that Michelas does not attack the validity or constitutionality of such act or of any section, subsection, paragraph, or part thereof. The act is found in Stats.1947, p. 553, Chapter 167. Although it is entitled 'An Act to create a water district in the Las Vegas valley, Clark County, Nevada; * * *,' both parties refer to it as the 'enabling act.' This indeed it is. Section 1 provides that a 'water district may be created in the Las Vegas valley, as hereinafter provided for, for the following objects and purposes:' (Emphasis added.) This is followed by subparagraphs numbered 1 to 14, which provide for such matters as having perpetual succession, the right to sue and be sued in its name, to adopt a seal, to take by grant, purchase, etc., and to dispose of real and personal property, to acquire rights of way, easements, privileges, etc., and to maintain and operate works and improvements to carry out its purposes, to store surface and underground waters, to appropriate and acquire water and water rights, import water into the district, to commence, defend, or intervene in litigation concerning water or water rights, to exercise the right of eminent domain, to acquire or condemn lands, water rights, improvements, reservoirs, and other works owned by others, to enter into agreements with the United States or any state, county, or district, public or private corporations, or individuals with reference to the acquisition, use, and administration of waters (carried out in great detail), to incur indebtedness and...
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