Public Utility District No. 1 v. United States

20 Cl. Ct. 696, 1990 U.S. Claims LEXIS 237, 1990 WL 87000
CourtUnited States Court of Claims
DecidedJune 26, 1990
DocketNo. 363-88C
StatusPublished
Cited by10 cases

This text of 20 Cl. Ct. 696 (Public Utility District No. 1 v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Public Utility District No. 1 v. United States, 20 Cl. Ct. 696, 1990 U.S. Claims LEXIS 237, 1990 WL 87000 (cc 1990).

Opinion

OPINION

ROBINSON, Judge.

This case is before the court on cross motions for summary judgment. Defendant moved to dismiss, or in the alternative, for summary judgment, alleging that this court lacks jurisdiction to entertain plaintiff’s complaint because it is not founded upon an express or implied contract with the United States. Plaintiff cross moved for summary judgment on the grounds that its client had an express contract with the United States (through the Farmer’s Home Administration) for the provision of electrical services on the Government’s property or, in the alternative, an implied-in-fact contract with the United States for the provision of such services. For the following reasons, the court will grant defendant’s motion for summary judgment and deny plaintiff’s motion for summary judgment.

Factual Background

This case involves a parcel of realty located in Ferry County, Washington which the Government acquired on June 26, 1985 by exercising redemption rights in connection with Mutual of New York’s first mortgage foreclosure. The parcel was previously owned by the Swawilla Land & Livestock, Inc., and James Madden (owners), and was used for farming and pasture land. In June of 1978, the Farmer’s Home Administration (FmHA) advanced funds to the owners and took a mortgage in the irrigation equipment which plaintiff placed on the property.1 In May and June of 1979, the owners entered into two contracts with plaintiff for the provision of power for irrigation of the parcel of realty, which required that the owners pay for power regardless of whether they actually used any electrical power. Plaintiff recorded both contracts properly on August 22, 1979.

Mutual Life Insurance Company of New York, the primary lender, instituted foreclosure proceedings against the owners, and obtained a judgment against the owners on January 6, 1984. Swawilla Land & Livestock, Inc., the Maddens, and the FmHA were joined as parties. In June of 1985, the United States, as a redemptor, acquired the parcel of realty at issue. Since June of 1985, the property has been vacant, no irrigated farming has occurred and irrigation equipment has not been used. Thus, since that date no electrical power has been used for farm operations.

[698]*698Broker Auction held an auction on the property at issue on October 10, 1985, and sold the machinery and equipment of the owners. Just before the auction was to commence, a lineman for plaintiff started to disconnect the power for the farmstead property. The farmstead property is served by power which is separate from the power which serves the irrigation equipment. Mr. LeRoy Fletcher, FmHA’s county supervisor, asked the lineman to keep the power on to the farmstead until the end of the day when the auction would be over. Plaintiffs lineman complied with this quite reasonable request2 with respect to the farmstead power, but he did disconnect the power to the irrigation equipment. He later returned and disconnected the farmstead power. Since then, the only contact between plaintiff and the Government (as redemptive purchaser of this parcel) that occurred within the next year was in June of 1986 when Kenneth Cole, Manager of PUD, contacted the FmHA County Supervisor to ask whether FmHA would be paying the outstanding power charges.

After it became apparent that the FmHA would not agree to pay the outstanding power charges, plaintiff, on June 21, 1988, filed suit in this court under 28 U.S.C. § 1491 (Tucker Act). Plaintiff alleged that the United States stepped into the shoes of its predecessor (owners) and therefore is bound by the express contract entered into between the prior owners and plaintiff for the provision of electrical services. In the alternative, plaintiff claims the existence of an implied-in-fact contract with the Government binding the Government to pay its charges for the balance of the ten year period, and that the Government is es-topped from denying its knowledge of the existence of the contract. Defendant denies that there is an express or implied-in-fact contract under these facts.

DISCUSSION

Summary judgment is appropriate when there are no genuine issues of material fact in dispute and the movant is entitled to judgment as a matter of law. RUSCC 56(c). A fact is material only if it could affect the outcome of the suit, and its materiality is determined by the substantive law applicable to the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The court agrees with the parties that there are no material facts in dispute. Further, the court finds that, even when viewing the facts in a light most favorable to plaintiff, defendant is entitled to judgment as a matter of law.

The first issue is whether there is an express contract between the United States and plaintiff, obligating the Government as the new owner of the property to pay plaintiff’s remaining service charges. The undisputed facts show that no representative of the FmHA nor any other Government agency executed a written contract with plaintiff specifically agreeing to pay plaintiff’s charges. Therefore, plaintiff principally relies upon the allegation that the Government, as the successor in interest of the prior owners, is bound by the two written service contracts between plaintiff and the prior owners because plaintiff’s interest in the subject realty was never extinguished in the foreclosure action. Therefore, plaintiff argues its interest, a contract right to be paid for the continued availability of electrical service, constitutes a covenant running with the land under State of Washington law, which is binding upon the Government as the new owner of the realty.

In order for these two recorded power supply contracts to constitute a covenant running with the land under State of Washington law, five elements must be met:3

[699]*699(1) [T]he covenant must have been enforceable between the original parties, such enforceability being a question of contract law (2) the covenant much “touch and concern” both the land to be benefitted and the land to be burdened; (3) the covenanting parties must have intended to bind their successors in interest; (4) there must be vertical privity of estate ...; and (5) there must be horizontal privity of estate, or privity between the original parties.

Bremmeyer Excavating, Inc. v. McKenna, 44 Wash.App. 267, 721 P.2d 567, 568 (1988) (emphasis added); see also Lake Arrowhead Community Club, Inc. v. Looney, 112 Wash.2d 288, 770 P.2d 1046, 1050 (1989).

The five elements are phrased in the conjunctive. Clearly, plaintiff must show that all of these five elements are satisfied before a covenant running with the land can exist. Therefore, the court will focus on the two elements of proof which plaintiff has most clearly failed to meet — a mutual intent to bind successors in interest and horizontal privity.4

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Bluebook (online)
20 Cl. Ct. 696, 1990 U.S. Claims LEXIS 237, 1990 WL 87000, Counsel Stack Legal Research, https://law.counselstack.com/opinion/public-utility-district-no-1-v-united-states-cc-1990.