Lee County Electric Cooperative, Inc. v. City of Cape Coral

159 So. 3d 126, 2014 Fla. App. LEXIS 8432, 2014 WL 2218972
CourtDistrict Court of Appeal of Florida
DecidedMay 23, 2014
DocketNo. 2D10-3781
StatusPublished
Cited by4 cases

This text of 159 So. 3d 126 (Lee County Electric Cooperative, Inc. v. City of Cape Coral) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lee County Electric Cooperative, Inc. v. City of Cape Coral, 159 So. 3d 126, 2014 Fla. App. LEXIS 8432, 2014 WL 2218972 (Fla. Ct. App. 2014).

Opinion

NORTHCUTT, Judge.

Several years ago the City of Cape Coral began a construction project to rework an intersection. The plan required the expansion of an existing road into a public utility easement where Lee County Electric Cooperative (“LCEC”) had placed its electric lines. Thus, LCEC was forced to relocate its lines to another public utility easement. The parties disagreed about which of them was responsible for shouldering the relocation expense, but they agreed that the City would file a declaratory judgment action to resolve the dispute.

In the declaratory judgment proceeding, the City and LCEC filed cross-motions for summary judgment. The circuit court determined that the facts were. undisputed, and it ruled in the City’s favor based on the franchise agreement between the parties and on section 337.403(1), Florida Statutes (2005). Our review of the summary judgment is de novo. Suncoast Auto Ctr., Inc. v. Consol. Prop. & Cas. Ins. Co., 880 So.2d 728, 730 (Fla. 2d DCA 2004). We reach the same resolution as the circuit court, albeit by slightly different reasoning.

The public utility easement containing LCEC’s electric lines came into being when Cape Coral was being planned and developed in the 1960s. The developer’s plats for the new community included a six-foot public easement at the foot of virtually every property by stating: “The owners of this property do hereby dedicate EASEMENTS along each boundary of each home site for County drainage purposes, and for Public Utilities, said easements not to exceed six feet each side of said boundaries, unless otherwise shown.” Before the subdivisions were built, LCEC began installing its electric lines and other equipment in these public utility easements.

After Cape Coral was incorporated in 1970, LCEC and the City entered into a franchise agreement that granted LCEC the “right, privilege and franchise to construct, maintain and operate an electric utility in, over, upon, under and across present and future streets, alleys, avenues, easements for public utilities, highways, bridges, and other public places of the City of Cape Coral, Florida.” In exchange, LCEC agreed to pay the City three percent of its revenues. The agreement was amended in 1986, but for our purposes the material terms were unchanged.

Neither the original nor the amended franchise agreement assigned responsibility for the cost of moving LCEC’s equipment if required to do so by the City. The only paragraph in the agreement that discussed equipment relocation provided that [128]*128“when any portion of a street is excavated by [LCEC] in the location or relocation of any of its facilities,” LCEC must, at LCEC’s cost, put the street back together in “as good condition as it was at the time of such excavation.” That provision did not apply here because LCEC did not excavate a street when it was required to move its lines from the easement, nor has the City sought reimbursement for the cost of street repair. But even though the franchise agreement does not specifically address relocation costs, it is central to this case. As the parties recognize, and as the affidavits filed in the declaratory action establish, the agreement is the source of LCEC’s right to continue using the public utility easements.

LCEC has advanced a number of arguments why the circuit court’s decision in this case was wrong. We address its contentions under two broad categories.

I. Taking of property without just compensation.

As a preliminary matter, we note that this case does not involve the appropriation or destruction of LCEC’s physical property, such as electric poles or lines. What has been taken, according to LCEC, is its right to run electric lines through a specific public utility easement. LCEC maintains that this was a compensable property interest and that the City took it without paying compensation, contrary to the Fifth Amendment to the United States Constitution (as applied to the states by the Fourteenth Amendment) and article X, section 6, of the Florida Constitution.

The United States Supreme Court rejected this very argument just over a century ago in New Orleans Gaslight Co. v. Drainage Commission of New Orleans, 197 U.S. 453, 25 S.Ct. 471, 49 L.Ed. 831 (1905). In that case, the gas company had been granted the exclusive right to provide gas service to the citizens of New Orleans, and it was permitted to lay its pipes in the public ways and streets. Thereafter the city promulgated a plan for drainage, which required the gas company to move some of its pipes. Id. at 454, 25 S.Ct. 471. New Orleans Gaslight asserted that because it had acquired the franchise and availed itself of the right to install pipes under the city streets, it had acquired a property right and the location of its pipes could not be shifted without compensation for the resulting expense. Id. at 459, 25 S.Ct. 471.

The Supreme Court had earlier determined that if the city wanted to terminate its agreement giving the gas company the exclusive right to provide gas services, it would have to take that right by eminent domain. New Orleans Gas-light Co. v. La. Light & Heat Producing & Mfg. Co., 115 U.S. 650, 673, 6 S.Ct. 252, 29 L.Ed. 516 (1885). But in its 1905 decision the Court observed that nothing in that agreement gave the gas company the right to place its pipes in any particular location within the city. Moreover, the agreement provided that the company’s pipes were to be laid in the public ways and streets “in such manner as to produce the least inconvenience to the city or its inhabitants.” Drainage Comm’n, 197 U.S. at 454, 25 S.Ct. 471. The Court pointed out that in its prior decision sustaining the gas company’s exclusive right to provide gas “there was a distinct recognition that the privilege granted was subject to proper regulations in the interest of the public health, morals, and safety.” 197 U.S. at 459, 25 S.Ct. 471 (citing New Orleans Gas-light, 115 U.S. at 671, 6 S.Ct. 252). That police power could not be contracted away. Id. at 460, 25 S.Ct. 471. The Court explained:

It would be unreasonable to suppose that in the grant to the gas company of the right to use the streets in the laying [129]*129of its pipes it was ever intended to surrender or impair the public right to discharge the duty of conserving the public health. The gas company did not acquire any specific location in the streets; it was content with the general right to use them; and when it located its pipes it was at the risk that they might be, at some future time, disturbed, when the state might require for a necessary public use that changes in location be made.

Id. at 461, 25 S.Ct. 471. The Supreme Court held that New Orleans used its police power for a necessary purpose, a drainage plan, and in doing so it became necessary for the gas company to move some of its pipes. Complying with the city’s requirement at its own expense did not result in a taking of New Orleans Gaslight’s property. Id. at 462, 25 S.Ct. 471. See also Grand Trunk W. Ry. Co. v. City of S. Bend, 227 U.S. 544, 553, 38 S.Ct. 303, 57 L.Ed.

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Bluebook (online)
159 So. 3d 126, 2014 Fla. App. LEXIS 8432, 2014 WL 2218972, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lee-county-electric-cooperative-inc-v-city-of-cape-coral-fladistctapp-2014.