City of St. Joseph v. Lake Contrary Sewer District

251 S.W.3d 362, 2008 Mo. App. LEXIS 589, 2008 WL 1860307
CourtMissouri Court of Appeals
DecidedApril 29, 2008
DocketWD 68162
StatusPublished
Cited by30 cases

This text of 251 S.W.3d 362 (City of St. Joseph v. Lake Contrary Sewer District) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of St. Joseph v. Lake Contrary Sewer District, 251 S.W.3d 362, 2008 Mo. App. LEXIS 589, 2008 WL 1860307 (Mo. Ct. App. 2008).

Opinion

VICTOR C. HOWARD, Chief Judge.

The current appeal involves the interpretation of a sewer subscription contract in which the City of St. Joseph (“St. Joseph”) agreed to treat sewage delivered to it from two smaller neighboring suburbs, the Village of Country Club (“Country Club”) and the Lake Contrary Sewer District (“Lake Contrary”) (together “subscribers”). St. Joseph sought, and was denied, a declaratory judgment and mandatory injunction ordering the subscribers to comply with a duly passed ordinance which required the subscribers to perform comprehensive testing and inspection of their sewers. The trial court held that the modification provisions of the agreements between St. Joseph and the subscribers were ambiguous and that the parties did not contemplate the ordinance passed by St. Joseph. The subscribers were, therefore, not required to comply with the ordinance.

St. Joseph now appeals claiming that the trial court erred because the agreement unambiguously required that Lake Contrary and Country Club comply with future St. Joseph ordinances, and a recently passed ordinance requires such inspection and testing. We affirm the trial court’s judgment. The passage of the ordinance did not comport with St. Joseph’s duty of good faith owed to the subscribers, and, therefore, St. Joseph was not entitled to the equitable relief that it sought.

Facts and Background

Pursuant to a Missouri Department of Natural Resources operating permit, St. *366 Joseph operated a sewage treatment plant, which treated sewage from the City of St. Joseph and sewage delivered to it from the subscribers. Virtually identical Sewer Subscription Agreements (the “agreements”), entered into in 1979 and 1988 respectively, governed the relationships between St. Joseph and Country Club and Lake Contrary. The agreements provided that the subscribers “shall conform to and be governed by City ordinances now in effect or hereafter enacted and any amendments thereto, pertaining to sewers and sewage disposal [and] sewage treatment.” The agreements also provided that the subscribers “be solely responsible for the construction, maintenance and operation of its sewage collection system in an orderly manner and sanitary condition, at no expense to [St. Joseph].” A separate provision indicated that the agreement could be modified through the mutual consent of the subscribers, St. Joseph, the EPA, and the Missouri Department of Natural Resources. Under certain circumstances, St. Joseph had the right to inspect the subscribers’ sewer lines at the subscribers’ expense. St. Joseph “shall inspect construction of all budding sewer connections and new main line sewers and sewer systems connected to the [St. Joseph] sewage system. [The subscribers] shall reimburse [St. Joseph] for the inspection of main line sewers at the rate of Thirty Cents ($.80) per foot of main line sewers constructed and inspected.” The agreements also provided that the subscribers would indemnify St. Joseph against any loss it incurred from the subscribers’ sewer systems. Residents of the subscribers who use the sewer system pay to St. Joseph a sewer use charge. The cost of sewer use charged to the residents is not described by the agreements. 1 These fees are not shared with the subscribers and. the subscribers maintain and construct their own sewage collection lines. The trial court also determined that the agreements permitted St. Joseph to conduct its own inspections of the subscribers’ sewage collection systems. 2

Lake Contrary has approximately 1.25 miles of sewer lines and Country Club has approximately three miles. These sewer systems, which feed into St. Joseph’s sewer system, are maintained and operated by the subscribers. The subscribers inspect and repair their sewage collection systems on an as needed basis. Lake Contrary has $2,500 in its maintenance account and $12,000 in its repair account. Lake Contrary does, however, receive a quarterly $30.00 T-hookup fee assessed to customers. Country Club had no reserve funds or funds in its general revenue set aside for sewer maintenance. St. Joseph has approximately 380 miles of sewer line within its boundaries. St. Joseph does not perform comprehensive preventative inspection and testing on its sewer system.

In May of 2005, St. Joseph passed an ordinance, which required that the subscribers perform comprehensive testing and inspection of their sewers lines (“2005 ordinance”). The 2005 ordinance is not applicable to St. Joseph’s own sewer system. It was estimated that complying with the ordinance would cost Country Club between $100,000 and $150,000 and would cost Lake Contrary roughly $50,000. Prior to the passage of the ordinance, the Lake Contrary Sewer system received no complaints from the Missouri Department of Natural Resources or EPA. Moreover, St. Joseph presented no evidence that *367 tended to show the subscribers’ sewer systems were in poor condition.

St. Joseph notified the subscribers that they were in breach of the agreements and the 2005 ordinance. After multiple attempts by St. Joseph to compel the subscribers to conduct the comprehensive testing and inspection, the subscribers have not complied. St. Joseph then filed a petition seeking both a declaratory judgment indicating that the subscribers were obligated to comply with the new ordinance and a mandatory injunction causing the subscribers to inspect their sewers.

The trial court determined that the dual means for altering the agreement rendered the modification provisions ambiguous and then appeared to resort to parol evidence to determine that the inspection and testing were not contemplated by the parties at the time the agreements were entered into. Neither the Missouri Department of Natural Resources nor the EPA require the testing and inspections. Moreover, the trial court made a finding of fact that neither Lake Contrary nor Country Club has the funds to pay for the type of testing and inspection required by the ordinance. Both subscribers have adequately addressed specific problems with their respective sewer systems as they arose.

Standards of Review

Determining whether a contract is ambiguous is a question of law, which this court reviews de novo. Harris v. Union Elec. Co., 622 S.W.2d 239, 247 (Mo.App. E.D.1981). Likewise, the interpretation of an unambiguous contract is a question of law to which no deference is afforded to the trial court’s holding. Executive Bd. of Mo. Baptist Convention v. Carnahan, 170 S.W.3d 437, 447 (MoApp. W.D.2005).

When reviewing a judgment, this court is concerned primarily with the correctness of the trial court’s conclusion and not necessarily the trial court’s means of arriving at its conclusion. Bus. Men’s As surance Co. of Am. v. Graham, 984 S.W.2d 501, 506 (Mo. banc 1999). In a court-tried case, the judgment will be sustained unless there is no substantial evidence to support it, it is against the weight of the evidence, it erroneously declares the law, or it erroneously applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.

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Bluebook (online)
251 S.W.3d 362, 2008 Mo. App. LEXIS 589, 2008 WL 1860307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-st-joseph-v-lake-contrary-sewer-district-moctapp-2008.