Wayne v. Village of Sebring
| Decision Date | 29 September 1994 |
| Docket Number | Nos. 93-3354,93-3384,s. 93-3354 |
| Citation | 36 F.3d 517 |
| Parties | Mark E. WAYNE; Carla L. Wayne; Roland L. Kendrick; Bret E. Smith; Brenda S. Smith; Robert J. Rouse, Jr.; Sharon Rouse; Donald G. Stillion; Beverly J. Stillion; William H. Tuel; Marjorie R. Tuel; Claude J. Bailey; Margaret J. Bailey; Larry L. Hartley; Kathleen J. Hartley; Judy K. Costello; Nancy Stuchell; and Jeffrey Stuchell, Plaintiffs-Appellees, Cross-Appellants, v. VILLAGE OF SEBRING; J. Michael Pinkerton, Individually, and as Mayor, President of Council, and Acting Village Manager of the Village of Sebring; James R. Conny, Individually, and as President Pro Tempore and Councilman of the Village of Sebring; John W. Smith, Individually, and as Councilmanof the Village of Sebring; Douglas L. Eaton, Individually, and as Councilman of the Village of Sebring; James V. Daniels, Individually, and as Councilman of the Village of Sebring; Alan C. Flowers, Individually, and as Councilman of the Village of Sebring; and Joseph E. Igro, Individually, and as Councilman of the Village of Sebring, Defendants-Appellants, Cross-Appellees, Community Program Loan Trust; Shawmut Bank, N.A.; General Electric Capital Corporation; and Farmers Home Administration, Defendants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Steve J. Edwards, Grove City, OH (briefed), Karen D. Kendrick-Hands, Grosse Pointe Park, MI (argued and briefed), for Mark E. Wayne, et al.
Kenneth J. Cardinal, Sebring, OH, Alan E. Johnson (argued and briefed), Leo R. Ward, Smith R. Brittingham, IV, Ward & Associates, Cleveland, OH, for the Village of Sebring, J. Michael Pinkerton, James R. Conny, John W. Smith, Douglas L. Eaton, James V. Daniels, Alan C. Flowers and Joseph E. Igro.
Before: JONES and RYAN, Circuit Judges; and BERTELSMAN, Chief District Judge. *
Plaintiffs are 18 residents of Smith Township, Mahoning County, Ohio, who reside within the service area of the Sebring Village Waterworks System. They brought this civil rights action, pursuant to 42 U.S.C. Secs. 1983 and 1985, against, inter alia, the Village of Sebring and its council members and manager. Plaintiffs challenge Sebring's recently enacted ordinances providing that the village will supply water and sewer service to those outside the village limits only upon the landowners' annexation of the land to Sebring. Pursuant to a motion for summary judgment, the district court dismissed the individual council members and village manager. During a jury trial, the district court directed a verdict in favor of Plaintiffs and against the village on the issue of liability, and granted at least part of the injunctive relief sought by Plaintiffs. The jury then awarded Plaintiffs $55,600 in damages. Subsequently, the court awarded Plaintiffs nearly $82,000 in attorney fees.
On appeal, Defendants contend that the district court should not have directed a verdict in Plaintiffs' favor; rather, it should have either granted one of Sebring's motions for judgment as a matter of law, or at least its motion for a new trial. Defendants also challenge the court's jury instructions on damages and its denial of Defendants' motions to conduct additional discovery after the discovery cut-off date. Finally, the individual defendants who prevailed on summary judgment argue that the court should have granted their request for attorney fees. On cross-appeal, Plaintiffs contend that the court should not have dismissed the village manager and council members from the suit, that the injunction issued by the court should have been broader, and that the court abused its discretion in reducing the attorney fees award from the amount for which Plaintiffs applied.
We affirm the court's grant of summary judgment in favor of the individual defendants, its directed verdict in favor of Plaintiffs, and its denial of Sebring's motions for judgment as a matter of law and for a new trial. We also affirm the court's jury instructions, its denial of Defendants' motion to conduct additional discovery, and its denial of the individual defendants' application for attorney fees. We reverse the court's award of Plaintiffs' attorney fees and remand for further proceedings. Further, we find that the lower court neglected to consider a portion of Plaintiffs' request for injunctive relief; we remand this one matter for initial consideration by the trial court.
In 1952, Sebring entered into a contract with the Maple Ridge Water Association ("MRWA"), which consisted of seventy residents living in Smith Township adjacent to Sebring. The MRWA promised to finance and construct the water lines necessary to hook into Sebring's water system in exchange for Sebring's promise to provide MRWA's members with water service, at the members' expense, for the next twenty years. The contract provided that the pipes paid for and installed by the MRWA became the immediate property of Sebring.
In the late 1970s, Sebring's water treatment plant was eroding and in need of repair. Sebring obtained a $3,575,000 loan from the federal Farmers Home Administration ("FmHA"), in consideration for which Sebring issued to FmHA a low interest rate bond payable over the next 40 years. The loan was governed by the Consolidated Farm and Rural Development Act, 7 U.S.C. Sec. 1921 et seq. Regulations enacted pursuant to this Act provided that, in order to secure the loan, Sebring had to pass an ordinance outlining the manner in which it was to repay the loan. Using language taken directly from the pertinent regulation, Sebring enacted a Loan Resolution providing that Sebring was required to:
provide adequate service to all persons within the service area who can feasibly and legally be served and to obtain FmHA's concurrence prior to refusing new or adequate services to such persons. Upon failure to provide services which are feasible and legal, such person shall have a direct right of action against the association or public body.
Loan Resolution p 14 (quoting 7 C.F.R. Sec. 1942.17(n)(2)(vii)).
In September 1987, the FmHA assigned its interest in Sebring's bond to the Community Program Loan Trust as part of the Omnibus Budget Reconciliation Act of 1986. Shawmut Bank served as trustee of the trust, and General Electric Capital Corporation ("GECC") served as the trust's agent.
Although in 1980, Sebring became classified as a city, Sebring lost some of its population over the following ten years. Consequently, after the 1990 census, Sebring was reclassified as a village. Plaintiffs speculate that this reclassification spurred village officials to implement an aggressive annexation campaign.
In November 1990, Sebring enacted an ordinance requiring those who use the village's water and sewer services, residing within Mahoning County but outside of the village proper, to annex their property to the village. Prospective customers would be connected to Sebring's water or sewer services only upon prior annexation, and, as for current customers who failed or refused to annex their property, their water or sewer services would be disconnected within 180 days. Ordinance No. 1477-90.
Under Ohio law, a municipal ordinance does not become effective for at least 30 days, during which time, if a referendum petition is filed, the ordinance does not become effective until a referendum election is conducted. Ohio Rev.Code Ann. Sec. 731.29. Such a petition was filed with regard to Sebring's Ordinance No. 1477-90, staying the resolution from taking effect. Six days after the petition was filed, the village council passed an emergency ordinance, No. 1481-90, which implemented the provisions of 1477-90 immediately without the referendum process. Subsequently, Ordinance No. 1477-90 was defeated in the referendum election of November 1991, but Defendants continued their policy of denying water service to non- residents who declined to annex their property to the village.
In January 1991, FmHA sent a letter informing Sebring officials that the village was still obligated to the terms of its Loan Resolution. This letter did not deter Sebring from enforcing its new ordinance. Sebring sent a letter to Plaintiff Roland L. Kendrick, who had been a customer of Sebring's water service since 1952. Kendrick was in the process of selling his home. The letter informed him that the purchaser would have to agree to annexation in order to receive water service. Kendrick claims this annexation policy resulted in the purchaser's backing out of the deal. Plaintiff Judy K. Costello similarly claims that Sebring's refusal to transfer water rights upon the sale of her home made it impossible for her to sell the home.
Plaintiffs Mark E. and Carla L. Wayne, who were building a new home in the area, received permission to tap into Sebring's water lines prior to the enactment of Ordinance No. 1477-90, and had already paid a tap-in fee. Sebring's refusal to provide water service to the Waynes unless they annexed the property rendered the Waynes unable to obtain financing to build their home.
Until Plaintiffs Jeffrey and Nancy Stuchell lost their home in a fire, they were customers of Sebring's water service. After the fire, they purchased a mobile home and moved it onto their property, but Sebring refused to provide water service. They sold their mobile home at a loss.
Plaintiffs Bret E. and Brenda S. Smith purchased their home and began to receive water service from Sebring just before Ordinance No. 1477-90 was enacted. Without any notice, the Smiths returned home one day to find Sebring employees digging up the water pipes in their yard. 1 The Smiths went without water for eight months before they drilled a well to meet their water needs.
In April 1991, GECC sent a letter to Sebring informing its officials that Ordinance Nos. 1477-90 and 1481-90 violated the terms of the bond documents and the Loan Resolution. The village council responded by attempting to repeal the Loan...
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