Artesian Water Co. v. State, Department of Highways & Transportation

330 A.2d 432, 1974 Del. Super. LEXIS 130
CourtSuperior Court of Delaware
DecidedNovember 22, 1974
StatusPublished
Cited by7 cases

This text of 330 A.2d 432 (Artesian Water Co. v. State, Department of Highways & Transportation) is published on Counsel Stack Legal Research, covering Superior Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Artesian Water Co. v. State, Department of Highways & Transportation, 330 A.2d 432, 1974 Del. Super. LEXIS 130 (Del. Ct. App. 1974).

Opinion

OPINION

BIFFERATO, Judge.

This is an action by Artesian Water Company (Artesian) against the State of Delaware, Department of Highways and Transportation (State Highway Department), seeking a declaratory judgment that Artesian is entitled to reimbursement in the amount of all water facility relocation expenses that it will necessarily incur by reason of a recently approved state highway reconstruction project involving Delaware Route 141 (Basin Road). Both parties have moved for summary judgment in their respective favor on the issue of Artesian’s entitlement to compensation for the full amount of such relocation costs.

The historical and technical facts have been set out in detail by the parties in their briefs. Suffice it to say, therefore, that Artesian, a state-regulated public util *435 ity corporation engaged in the business of supplying and distributing water for public use, presently operates a portion of its pipeline and related facilities in and along a public road. Artesian had originally acquired a right-of-way in this area from a private trust in 1955 and, in accordance with the terms of franchise agreements entered into between the parties in 1955 and 1956, installed a water distribution system in and along what was then the position of Basin Road and in and through its easement over the privately owned property. All such private property, as well as Artesian’s easement, has since been acquired by the State of Delaware. Consequently, all of Artesian’s facilities in this area are presently located on state-owned property.

Due to certain reconstruction activities involving Basin Road in 1958-1959, Arte-sian was required to relocate substantially all of its water line, originally installed under authority of the franchise agreements, to their present position in the bed of Basin Road. Despite the franchise agreements’ cost burden provisions to the contrary, the State Highway Department reimbursed Artesian in the full amount of its relocation costs. The Department’s explanation for this is that since the highway reconstruction project qualified for at least 90% federal aid, 17 Del.C. § 132(b)(5) statutorily shifted the burden of defraying such relocation costs to it.

In 1971, pursuant to a further proposed major reconstruction and relocation of Basin Road, the State Highway Department notified Artesian that it would again be required to relocate certain of its pipeline from the 1958-1959 realigned Basin Road right-of-way and to totally relocate its facilities as originally installed in and through the area of its former easement. Unlike the 1958-1959 highway project in which the Federal Government was a 90% funding participant, the proposed project was approved on a 50/50 matching basis. Therefore, finding 17 Del.C. § 132(b)(5) inapplicable, the State Highway Department has refused Artesian’s request for full relocation cost reimbursement.

Artesian’s claim of entitlement to full relocation cost compensation is predicated upon alternative theories. Artesian’s primary contention is that the State of Delaware is obligated by federal law to pay public utility relocation costs in all federal-aid highway projects, irrespective of the size of the federal share payable to the State. It relies on the inter-relationship of recent federal and Delaware relocation assistance statutes in proclaiming that a statutory right to compensation has emerged which derogates against the traditional common law rule that heretofore required utilities to relocate at their sole expense. Alternatively, Artesian contends that it has vested property and/or contract rights in the subject location of its water-distributing facilities and is thereby entitled to compensation for relocation expenses under the law of eminent domain.

The State Highway Department, on the other hand, contends that the common law rule is controlling; that neither federal nor Delaware statutes authorize utility relocation cost compensation in the present case; and that Artesian does not have the type of interest in the present location of its facilities for which compensation is required under eminent domain principles.

The Court preliminarily directs itself to the question of the applicability of the 1955-1956 franchise agreements to the present controversy. These agreements, if applicable, would clearly place the burden on Artesian to absorb all expenses for the relocation of its facilities from the areas over which the franchises were granted. However, due to the major realignment of Basin Road and the substantial relocation of Artesian’s water-distributing facilities in 1958-1959, these agreements presently cover only 85 feet or approximately 5% of the present location of Artesian’s facilities. Therefore, the terms of the 1955-1956 franchise agreements govern the disposition of the com *436 pensation issue only with respect to that portion (approximately 5%) still covered by the agreements unless, of course, Arte-sian prevails in its argument that certain recent federal and Delaware statutes super-cede these agreements entirely on the question of full relocation cost reimbursement.

I

In the absence of a statute or agreement to the contrary our state courts, as well as the courts of most jurisdictions, adhere to the common law rule that a utility is required to relocate at its own expense its facilities located on public highways when such relocation is necessary to facilitate highway improvements. State Highway Department v. Roberts, Del.Ch., 215 A.2d 250, 254 (1965). See also New Orleans Gas Light Company v. Drainage Commission, 197 U.S. 453, 25 S.Ct. 471, 49 L.Ed. 831 (1905); Port N. Y. Auth. v. Hackensack Water Co., 41 N.J. 90, 195 A.2d 1 (1963); Opinion of the Justices, 101 N.H.Supr. 527, 132 A.2d 613 (1957). See generally, 12 McQuillen, Municipal Corporations (3rd Ed.), § 34.74a; 36 Am.Jr.2d, Franchises, § 42. The rationale underlying the rule is that since the utility acquires its right to make special or exceptional use of the public highway only by the permissive grant of the state, 12 McQuillen, supra, § 34.10, the utility’s use is necessarily subordinate to the general public’s principal and primary use of the highway. Sammons v. City of Beaufort, 225 S.C. 490, 83 S.E.2d 153, 157 (1954); 25 Am.Jur.2d, Highways, § 182. Hence, under the theory that what special privileges the sovereign giveth, it can, in the light of a paramount public need, taketh away, a utility always runs the risk that the public welfare may require changes in the public highways which will require relocation of its facilities and for which “a utility must always be prepared to assume and pay for.” State Highway Department v. Roberts, supra, 215 A.2d at 254. See also New York Tunnel Authority v. Consolidated Edison Co., 295 N.Y. 467, 68 N.E.2d 445 (1946); Bell Telephone Co. v. Pennsylvania Public U. Com’n, 139 Pa.Super. 529, 12 A.2d 479 (1940).

It is this well-settled common law rule that Artesian argues has been displaced by a statutory right to full relocation cost compensation.

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