New Landing Utility, Inc. v. Illinois Commerce Commission

374 N.E.2d 6, 58 Ill. App. 3d 868, 16 Ill. Dec. 705, 1978 Ill. App. LEXIS 3935
Appellate Court of Illinois·Decided April 17, 1978·No. 75-438·Published·Cited by 5 cases

Opinions

Mr. JUSTICE BOYLE

delivered the opinion of the court:

The defendant-appellant and cross-appellee, Illinois Commerce Commission, hereinafter referred to as the Commission, appeals from an order of the circuit court of Ogle County, which affirmed in part and reversed in part a Commission order entered November 14, 1973. Plaintiff-appellee and cross-appellant, New Landing Utility, Inc., hereinafter referred to as plaintiff, filed a cross-appeal in reference to the same court order. However, subsequently, on plaintiff s motion, the cross-appeal was dismissed.

The facts of this somewhat puzzling case begin on January 4, 1973, when the plaintiff filed with the Commission an application for a certificate of public convenience and necessity. Plaintiff desired to construct and operate a water and sewer utility for New Landing for the Delta Queen, hereinafter referred to as the development, which is a recreational second-home development located in Ogle County.

Hearings were held on plaintiff’s application for a certificate of public convenience and necessity in June and August of 1973. At those hearings, plaintiff offered, among other things, testimony of the propriety of the availability charges it hoped to collect from those who bought lots in the development. These availability charges were called for in the contract by which the lots were purchased in the development. The contract provided that a buyer of a lot agree to pay $5 a month to the plaintiff for water service and $5 a month for sewer service. The lot buyer agreed to pay these charges as soon as the lines for the respective services were in front of or adjacent to the buyer’s lot. The buyer’s obligation to pay these charges was independent of the question of whether or not the buyer established a connection to the service. In short, the buyers were obligated to pay this monthly availability charge as soon as the service became available for them to establish a service connection.

On November 14, 1973, the Commission granted the plaintiff a certificate of public convenience and necessity. However, the Commission’s order granting this certificate of public convenience and necessity contained two provisions to which the plaintiff objected. The first required plaintiff to use a larger pipe size than it had originally planned to use. The second provision prohibited plaintiff from charging or collecting the availability charges for water and sewer service. Plaintiff requested a rehearing. The rehearing was held on January 30, 1974, at which time plaintiff offered additional testimony as to the propriety of the availability charges for water and sewer service. The Commission failed to enter a new order following the rehearing, and on July 3,1974, plaintiff sought relief by filing an appeal in the circuit court of Ogle County. The circuit court affirmed the Commission in regard to the granting of the certificate of public convenience and necessity and in regard to the pipe size, but reversed the Commission’s order in reference to the availability charges. The circuit court further ordered that the plaintiff could charge and collect the availability charges.

The Commission has appealed from that portion of the circuit court’s order which reversed the Commission’s order in regard to the availability charges. The plaintiff initially filed a cross-appeal in reference to the circuit court’s affirmance of the pipe size requirement of the Commission’s order, but that appeal was dismissed upon plaintiff’s motion.

The Commission argues that the circuit court had no authority to affirm the Commission’s order in part and reverse it in part. The plaintiff responds by asserting the circuit court had the authority to excise that portion of the Commission’s order prohibiting the collection of the availability charges (a) because that provision was an unconstitutional infringement on the plaintiff’s freedom to contract, and (b) because the Commission lacked jurisdiction over the question.

We begin by examining the plaintifFs contention that the Commission’s order unconstitutionally infringed upon the plaintiff’s freedom to contract because there was no finding that the availability charges violated the public health, safety, morals or general welfare. The plaintiff contends that the circuit court has the power to excise such an unconstitutional provision from the Commission’s order while leaving intact the remainder of the order. We find plaintiff’s contention to be inapplicable to the case at hand. The State may exercise its police powers to protect the public health, safety, morals and general welfare. By enacting the Public Utilities Act, the State legislature determined that it was necessary and proper for the State to use its police powers to regulate public utilities. That regulation includes the setting of reasonable rates. (Section 41 of the Public Utilities Act (Ill. Rev. Stat. 1973, ch. 111 2/3, par. 41).) Therefore the State, through the Commission, has the power, if it has made sufficient findings of fact at a proper hearing, to hold that the collection of an availability charge would constitute an unreasonable rate. Indeed, the very contract plaintiff now claims was impaired recognizes this power when it provides that the charges collected under it are subject to change by order of the Commission. Therefore it becomes clear that there is no constitutional question presented here, but rather a question of whether or not the Commission followed the proper statutory procedures.

Next we turn to the plaintifFs contention that the circuit court had the power to excise that portion of the Commission’s order prohibiting the collection of the availability charges on the grounds that the Commission lacked the jurisdiction in the case at hand to deal with the question. We agree.

Free access — add to your briefcase to read the full text and ask questions with AI

New Landing Utility, Inc. v. Illinois Commerce Commission, 374 N.E.2d 6, 58 Ill. App. 3d 868, 16 Ill. Dec. 705, 1978 Ill. App. LEXIS 3935 (Ill. Ct. App. 1978).

374 N.E.2d 6 (New Landing Utility, Inc. v. Illinois Commerce Commission) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Holland Motor Express, Inc. v. Illinois Commerce Commission
520 N.E.2d 682 (Appellate Court of Illinois, 1987)
Spray v. Illinois Civil Service Commission
449 N.E.2d 176 (Appellate Court of Illinois, 1983)
Haymes v. Holzemer
445 N.E.2d 681 (Ohio Court of Appeals, 1981)
Carlson Transport, Inc. v. Illinois Commerce Commission
416 N.E.2d 1239 (Appellate Court of Illinois, 1981)
Candlewick Lake Utilities Co. v. Quinones
402 N.E.2d 369 (Appellate Court of Illinois, 1980)