Jesse H. Dansie Family Trust v. Public Service Commission

2016 UT App 116, 374 P.3d 1057, 2016 WL 3034077
CourtCourt of Appeals of Utah
DecidedMay 26, 2016
Docket20140653-CA
StatusPublished

This text of 2016 UT App 116 (Jesse H. Dansie Family Trust v. Public Service Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jesse H. Dansie Family Trust v. Public Service Commission, 2016 UT App 116, 374 P.3d 1057, 2016 WL 3034077 (Utah Ct. App. 2016).

Opinion

Opinion

VOROS, Judge:

[ 1 The Jesse H. Dansie Famfly Trust (the Trust) seeks review of a final order of the Public Service Commission (the, PSC), which approved a rate case for the Hi-Country Estates Homeowners Association (the Association). We decline to disturb the PSC's order. m

BACKGROUND

2 The events leading to this case began in 1977, when Jesse H. Dansgie leased the use of a well on his property to Gerald Bagley, the 'original developer of Hi-Country Estates. The Well Lease allowed Bagley to connect Hi~-Country's water system to Dan-sie's well for ten years. In return, Dansie received an initial payment and "monthly rental" fees, plus water and a number of residential hook-ups free of charge. Hight years later, Dansie and Bagley amended the Well Lease. Under the amendment, Dansie received, in addition to his residential hookups, "the right to receive up to 12 million .... gallons of water per year from the combined water system at no cost for culinary and yard irrigation on the Dansie property." The amendment also stated that the Well Lease bound Bagley, Dansie, and their successors and assigns. .

13 In 1985, Bagley created Foothills Water Company and, as Foothills, applied to the PSC to operate the water system as a public utility. Hi-Country Estates Homeowners Ass'n v. Bagley & Co. (Hi-Country Estates I), 2008 UT App 105, ¶ 4, 182 P.3d 417. The PSC granted a certificate of public convenience and necessity (CPCN) to Foothills and authorized interim rates. Id; Later that year, *1060 Bagley transferred all interest and stock in Foothills to Dansie. Id. That same year, the Association sued, contesting Foothills's and Dansie's interests in the water system and seeking to quiet title in the Association. This case represents the most recent episode in the ensuing litigation between the Association, Foothills, Bagley, Dansie, and the Trust. «

T4 In March 1986, the PSC held general rate-setting hearings for Foothills and issued an order (the 1986 Order). In the course of determining "just and reasonable rates," the PSC considered the Well Lease. The PSC found that the Well Lease was "grossly unreasonable, requiring not only substantial monthly payments, but also showering virtually limitless benefits on Jesse Dansie and the members of his immediate family." The PSC further determined that "It would be unjust and unreasonable to expect Foothills' . active customers to support the entire burden of the Well Lease Agreement." If Dansie and his family received water through the water system, the PSC ordered that they would have to pay "the actual pro-rata ... costs for power, chlorination and water test; ing involved in delivering that water." 2

¶ 5 In 1998, the Association assumed control of the water system and the CPCN and developed a new well, discontinuing the use of the Dansie well, Id. 15. A year later, the Association disconnected the water lines to the Dansie property after the Dansies allegedly refused to pay the costs required by the 1986 'Order. Id. In 1996, the PSC decertified the Association as a public utility. Id.

16 In 2005, a trial court ruled that the Well Lease was an enforceable contract, neither void as against public policy nor unconscionable. Id. 16. We affirmed the trial court's order in Hi-Country Estates I, 2008 UT App 105, ¶ 1, 182 P.3d 417. We noted that after the PSC "revoked the status of the water system as a public utility ... the PSC did not have jurisdiction over the water system" and "the 1986 PSC order was no longer binding." Id. 112 n. 2. We therefore "interpret{ed] the Dansies' rights and obligations under the Well Lease according to its plain language" and concluded that under the plain language of the Well Lease, the Dansies were not required to pay the costs listed in the 1986 Order. Id.; see also Hi-Country Estates Homeowners Ass'n v. Bagley & Co. (Hi-Country Estates II), 2011 UT App 252, ¶¶ 10, 13, 262 P.3d 1188.

17 After we issued our decision in Hi-Country I, the Dansies filed a motion in the trial court "to modify the Final Judgment to conform to footnote 2 of our opinion as they understood it." Hi-Country Estates II, 2011 UT App 252, ¶ 4, 262 P.3d 1188. The trial court denied the motion and the Dansies once again appealed to this court, Id. We affirmed the trial court and explained that "the effect of the Final Judgment ... is that the Dansies are, going forward, entitled to their contractual rights to free water and free hook-ups unless the PSC intervenes and determines otherwise." Id. ¶¶ 11, 14 (emphasis added).

T8 In the wake of Hi-Country Estates II, - the Association presented evidence that it was providing water service to customers outside its boundaries and requested reinstatement of the water system's CPCN. The PSC reinstated the CPCN, bringing the water system again within the PSC's jurisdiction. One year later, the Association filed a general rate case application with the PSC. The application included a transportation fee specific to "well lease customers"-in other words, a fee specific to members of the Trust, The Association asserted that it was under no obligation to serve the Trust members, but it included the fee in the proposed rates as a contingency to cover the costs it would incur should the PSC determine such an obligation existed. Jesse Rodney Dansic, who at the time was the trustee, filed a petition to intervene, which the PSC granted.

¶ 9 The PSC scheduled a general rate increase hearing for March 4, 2014, and a public witness hearing one day later. Dansie filed both direct testimony and surrebuttal *1061 testimony, addressing the Well Lease and whether the Association's service area included certain parcels of his property. He asserted that Hi-Country Estates I and Hi-Country Estates II prevented abrogation of the Well Lease; that he had a right to 12 million gallons of water per year from the Association at no cost, including transportation fees; and that the proposed "well lease rate" of $3.85 per 1,000 gallons was prohibited under the Well Lease. Dansie also stated that he was a customer of the Association and that his "back 80" acres were included in the original water system service agreement and should continue to be.

{10 The day before the scheduled rate hearing, the Trust's attorney filed a motion for continuance. The motion stated that Dan-sie had suffered a fall, was hospitalized, and thus would be unable to attend the March 4 hearing, On March 4, instead of holding the rate hearing, the PSC convened a hearing to discuss Dansie's motion. The Trust's attorney appeared on behalf of Dansie. After a discussion that included consideration of the PSC's statutory deadline of 240 days and the lengthy history of litigation over the water system, the parties proposed to hold the rate hearing one week later, The Trust's attorney suggested the new date and stated that if Dansie could not attend, his brother "would ... be willing to testify in his place," and that if Dansie's brother testified, the Trust would not appeal based on Dxansie’s absence. The Administrative Law Judge stated that she was "not addressing that issue per se," but she "recognize[d]" what the Trust's attorney had said. The PSC rescheduled the hearing.

{11 On March 11, 2014, the parties met again for the rate hearing.

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Bluebook (online)
2016 UT App 116, 374 P.3d 1057, 2016 WL 3034077, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jesse-h-dansie-family-trust-v-public-service-commission-utahctapp-2016.