Winston Park, Ltd. v. City of Coconut Creek

• Court: Florida District Court of Appeals
• Writing for the Court: STEVENSON, J.
• Citation: Winston Park, Ltd. v. City of Coconut Creek, 872 So.2d 415 (Fla. App. 2004)
• Decision Date: 05 May 2004
• Docket Number: No. 4D03-5.,4D03-5.
• Parties: WINSTON PARK, LTD., a Florida Limited Partnership, Appellant, v. CITY OF COCONUT CREEK, a Florida Municipal Corporation, Appellee.

872 So.2d 415

WINSTON PARK, LTD., a Florida Limited Partnership, Appellant, v. CITY OF COCONUT CREEK, a Florida Municipal Corporation, Appellee.

No. 4D03-5.

District Court of Appeal of Florida, Fourth District.

May 5, 2004.

William S. Spencer, Fabienne E. Fahnestock and Christian A. Petersen of Gunster, Yoakley & Stewart, P.A., Fort Lauderdale, for appellant.

Nancy Little Hoffmann of Nancy Little Hoffmann, P.A., Pompano Beach, and Maurice M. Garcia of Abrams, Anton, P.A., Hollywood, for appellee.

STEVENSON, J.

This appeal concerns a breach of contract and declaratory action by appellant, Winston Park, Ltd. (Winston Park), against appellee, the City of Coconut Creek (City), regarding the parties' rights, duties and obligations with respect to a 1983 agreement concerning the construction and use of certain water and sewage transmission facilities. Because we find the existence of genuine issues of material fact, we reverse the trial court's order granting summary judgment in favor of defendant/appellee, the City.

The 1983 Agreement

In 1983, a group of property owners (Participants) in the City of Coconut Creek formed the Coconut Creek Pollution Elimination Company (Company). Winston Park, a developer in the City, is the successor in interest to one of the original Participants in the Company.

On June 23, 1983, the City and Company entered into an Agreement ("1983 Agreement"), wherein the Company agreed to finance, construct and then convey to the City a portion of the primary water distribution pipelines and sewage transmission facilities through which the City would provide water and sewer services to the Participants' properties and the properties of others to be served by the City. By entering into the 1983 Agreement, the City was relieved of the obligation to build and finance the construction of the water and sewer transmission facilities.

The 1983 Agreement provided the minimum capacity of the water distribution pipelines and sewage transmission facilities to be constructed by the Company and defined how the capacity would be measured:

The COMPANY warrants that the facilities to be constructed shall provide a minimum of 10,000 ERC's [Equivalent Residential Connections] of water and sewer capacity. An ERC, for purposes of this Agreement, will be defined as a unit of measurement equal to a water flow of 350 gallons per day and a sewer flow of 285 gallons per day.

Each of the original Participants to the 1983 Agreement, including the City, reserved for itself a specific number of ERC's making up the 10,000 ERC's. It is undisputed that the City reserved 3,000 ERC's for itself and has since utilized all 3,000 ERC's. Winston Park was assigned a total of 3,000 ERC's from its predecessor in interest and original Participant in the Company. The total cost attributed to the construction of the facilities supported 10,000 ERC's. Under the 1983 Agreement, the City could not divert the Company's share of water and sewer capacity to other areas within the City limits of the City without the Company's express written consent.

The 1983 Agreement made it mandatory for each Participant to surrender any "unused capacity" or ERC's to the City when it completed construction of its development and provided the means for a Participant to allocate or sell its unused ERC's to a third party. The 1983 Agreement provides:

[A]ny unused capacity shall be surrendered to the CITY in writing on a form of an affidavit supplied by the CITY that shall include the name of the owner/holder of any such unused capacity, the exact amount of any unused capacity expressed in ERC's currently available and the cost of said capacity as hereinafter defined. Upon the surrender of such capacity, the COMPANY ... shall be given a right of first refusal as to those ERC's surrendered by other shareholders or participants.

... Any purchase by any such shareholders, participants and successors shall be the first to respond in writing and pay for the same in cash and in full to the City Manager. In the event no such participant ... responds in writing and pays for said ERC's within 30 days, the CITY shall be free to dispose of said unused ERC's as hereinafter provided.

Upon the allocation of said ERC's as determined by the CITY to any third parties by the CITY, the former owner/holder of said unused ERC's shall, within 30 days of the receipt by the City of the full amount then charged, receive from the CITY a sum equal to 80% of the full amount then charged for such capacity by the CITY. However, the CITY shall not be required to accept at any time, any unused ERC's offered to the CITY by the shareholders, participants and successors. (emphasis added).

The City does not operate or maintain a water treatment plant or a sewage treatment and disposal collection system. Instead, the City receives bulk potable water and its allocation of sewer capacity under a Water Agreement and Wastewater Agreement (collectively "Large User Agreement"), entered into between the City and Broward County in 1973 and 1981, respectively. As such, the 1983 Agreement contemplated that the City would be required to increase its projection of bulk potable water and the allocation of sewer capacity it receives from Broward County to meet and secure the 10,000 ERC's of water and sewer capacity reserved by the Participants. If City could not secure the commitment from Broward County, the Company was not obligated to construct the water and sewer transmission facilities.

The Lawsuit

In the mid 1990's, Winston Park completed development on a community it was building and determined it had 296 excess unused ERC's and sought to surrender them to the City for allocation to another developer, Engle Homes, who was building a community called Banyan Trails in the City. Winston Park orally agreed to sell its excess ERC's to Engle Homes for $2,400 each. Subsequently, Winston Park tendered to the City of Coconut Creek a surrender of unused ERC capacity, specifically expressed as "296 ERC's." The City, however, refused to allow Winston Park to transfer its excess ERC's to Engle Homes and informed Winston Park that it was exercising its right under the agreement to decline to accept the unused ERC's. Instead, the City sold 296 ERC's to Engle Homes directly for $3,200.00 each. The City later declined to pay Winston Park 80% of the money received from the sale as requested.

Winston Park subsequently filed the instant lawsuit for breach of contract and declaratory relief, alleging that the City allocated or sold Winston Park's water and sewer capacity within the Company system to Engle Homes without paying it 80% of the money received from the sale. The parties took differing positions at the hearing on the motion for summary judgment. Winston Park argued that the pipelines built by the Company under the 1983 Agreement had a finite transmission capacity and, as such, it could carry no more than 10,000 ERC's of water and sewer capacity. Thus, the City had ERC's available for allocation to Engle Homes only because of the 296 unused ERC's it owned. Winston Park, through a series of exhibits, showed that the master utilities plan for the development of Banyan Trails was...