Rural Water District No. 5 Wagoner County v. City of Coweta

202 F. Supp. 3d 1268, 2016 WL 4289915, 2016 U.S. Dist. LEXIS 107562
CourtDistrict Court, N.D. Oklahoma
DecidedAugust 15, 2016
DocketCase No. 08-CV-252-JED-FHM
StatusPublished
Cited by1 cases

This text of 202 F. Supp. 3d 1268 (Rural Water District No. 5 Wagoner County v. City of Coweta) is published on Counsel Stack Legal Research, covering District Court, N.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rural Water District No. 5 Wagoner County v. City of Coweta, 202 F. Supp. 3d 1268, 2016 WL 4289915, 2016 U.S. Dist. LEXIS 107562 (N.D. Okla. 2016).

Opinion

OPINION AND ORDER

JOHN E. DOWDELL, UNITED STATES DISTRICT JUDGE

Plaintiff, Rural Water District No. 5 of Wagoner County, Oklahoma (Wagoner-5), [1271]*1271filed this case claiming that, as a debtor association under 7 U.S.C. § 1926(b), it has the exclusive right to provide water service to all customers within its service area. Wagoner-5 was indebted from 1970 to 2001, and it became re-indebted under § 1926(b) upon acquiring a loan from the United States Department of Agriculture (USDA) on June 15, 2007. The case involves Wagoner-5’s claim to the exclusive right to provide water service to four locations: Koweta Indian Clinic; Timber Ridge Crossing Subdivision; Celebration at the Woods Subdivision; and Cedar Creek Village (the “Disputed Customers”). After Wagoner-5 became indebted on the June 15, 2007 loan, the defendants, City of Coweta and the Coweta Public Works Authority (collectively, Coweta) provided household water service to the Disputed Customers. Wagoner-5 initiated this suit for damages and equitable relief under- 42 U.S.C. § 1988 and 7 U.S.C. § 1926(b).

The Court previously conducted a jury trial on Wagoner-5’s damages claims. The jury returned a verdict upon special interrogatories in favor of Wagoner-5, establishing that Wagoner-5 made potable water service available to each of the four Disputed Customers. (Doc. 121 at 1-4). The jury further determined that Coweta had not established that the cost to any Disputed Customer to obtain potable water service from Wagoner-5 was “unreasonable, excessive, and confiscatory.” (Id.). Because the other ' elements of the § 1926(b) claim were established by the parties’ pretrial stipulations (see Doc. 107 at 6, ¶ III), the jury’s findings resulted in a victory for Wagoner-5. The jury found that Wagoner-5 incurred a total of $614,798 in damages due to Coweta providing potable water service to the Disputed Customers. (Doc. 121).

Apart from the damages found by the jury, Wagoner-5 also sought equitable relief in several forms:

(1) a declaratory judgment to establish the rights and other legal relations of the parties concerning the right of Coweta to sell water to the Disputed Customers;
(2) an injunction enjoining Coweta from competing with Wagoner-5 in relation to the Disputed Customers and compelling Coweta to transfer water service of the Disputed Customers to Wagoner-5; and
(3) the imposition of a constructive trust over any and all water lines and facilities owned by Coweta and utilized to serve the three Residential Projects: Cedar Creek Village; Celebration at the Woods; and Timber Ridge Crossing.

(Doc. 2 at 5-6; Doc. 107 at 2-4). Following the jury’s verdict, the Court heard evidence on Wagoner-5’s equitable claims at a bench trial, in order to determine what appropriate equitable relief, if any, should be granted to Wagoner-5. During the equitable bench trial, and with the parties’ agreement, the Court considered the evidence presented during the jury trial and heard additional testimony. Upon consideration of all testimony, exhibits, and briefing by counsel, the Court enters the following findings of fact and conclusions of law.

FINDINGS OF FACT1

1. Wagoner-5 was formed according to state law requirements and is an “association” within the meaning of 7 U.S.C. § 1926(b). (See Doc. 107 at 6).

2. The Disputed Customers are all located within the territory of Wagoner-5, which was incorporated on May 23, 1966. (Doc. 52-1; see also 49-2, 49-3, 49-4, 49-5).

[1272]*12723. As found by the jury, Wagoner-5 made potable water service available to each of the Disputed Customers. (Doc. 121).

4. Wagoner-5 is indebted to the USDA for the purpose of 7 U.S.C. § 1926(b). (Doc. 107 at 6). Wagoner-5 was indebted to the USDA from September 28, 1970 until November 28, 2001. (PX 22 at 3-11). Wagoner-5 became re-indebted to the USDA on June 15, 2007. (PX 22 at 17). Wagoner-5 has remained indebted to the USDA since June 15, 2007. (PX 22 at 2, 17).

5. Coweta currently provides water service to the Disputed Customers. (Doc. 107 at 6). Coweta first began providing contractor water service to Timber Ridge Crossing in June 2005; to Koweta Health Clinic on March 20, 2006; to Cedar Creek Village on May 12, 2009; and to Celebration at the Woods on October 28, 2009. (DX 22). Coweta first began providing customer water service to Timber Ridge Crossing on October 14, 2005; to Koweta Health Clinic on May 16, 2006; to Celebration at the Woods on July 23, 2010; and to Cedar Creek Village on December 28, 2009. Id.

6. The Koweta Health Clinic was an existing water customer of Wagoner-5 before Coweta commenced water service to the Clinic. (Doc. 129 at 54,11. 23-25; at 55, 11.1-13).

7. The on-site water lines and facilities associated with the three Residential Projects were conveyed to Coweta by each of the developers on the following dates: Timber Ridge Crossing on June 6, 2005 (PX. 308); Celebration at the Woods on May 4, 2009 (PX. 309); and Cedar Creek Village on July 6, 2009 (PX. 310). Coweta did not pay for any of the on-site water facilities that were conveyed to it. (Doc. 141 at 95, 11. 7-9; at 96,11. 2-8; at 97,11. 17-25 to 98,1. 1). No on-site water lines were conveyed to Coweta for the Koweta Health Clinic.

8. Coweta violated Wagoner-5’s rights to § 1926(b) protection during Wagoner-5’s original period of indebtedness to the USDA. During the bench trial, Phil Roland testified that, in the 1980s, he was the developer of two other Timber Ridge developments situated north of Timber Ridge Crossing. (Doc. 141 at 17, 11. 5-8). Mr. Roland constructed water lines to connect these two other developments to the Coweta water system and then dedicated the lines to Coweta, because, “[i]n [his] mind, you have to have water to have sewer.” (Id. at 20, 1. 19; at 21-22). Roland paid for these water lines with some reimbursement from Coweta for excess capacity. (Id. at 22, 11. 11-18). Mr. Roland testified that Wagoner-5 had water lines on these two developments at the time (Doc. 141 at 19,11. 5-8), but no one from Coweta informed him that the water district had a right to provide water service in that area. (Doc. 141 at 29,11.11-14).

9. Coweta pressured developers to use its water service by tying its water service to its sewer service. Mike Yochum, the developer of Celebration at the Woods, was advised by his engineer that if he “had to have the city [sewer] service, that [he] had to get the water from the City of Coweta.” (Doc. 130 at 238, 11. 4-8). Eddie Reynolds, the developer of Cedar Creek Village, similarly testified that Coweta would not provide sewer service to his development unless he also agreed to accept water service from Coweta. (Doc. 130 at 216,11. 9-19; id. at 217-218). At the time he was planning the development, Reynolds wanted to utilize city sewer service so that he could develop a greater number of lots of smaller lot size.

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
202 F. Supp. 3d 1268, 2016 WL 4289915, 2016 U.S. Dist. LEXIS 107562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rural-water-district-no-5-wagoner-county-v-city-of-coweta-oknd-2016.