State ex rel. Imperial Utility Corp. v. Borgmann

664 S.W.2d 215, 1983 Mo. App. LEXIS 3793, 1983 WL 813513
CourtMissouri Court of Appeals
DecidedMay 17, 1983
DocketNo. WD 33820
StatusPublished
Cited by1 cases

This text of 664 S.W.2d 215 (State ex rel. Imperial Utility Corp. v. Borgmann) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Imperial Utility Corp. v. Borgmann, 664 S.W.2d 215, 1983 Mo. App. LEXIS 3793, 1983 WL 813513 (Mo. Ct. App. 1983).

Opinion

CLARK, Judge.

Appellant Imperial Utility Corporation was found by order of the Public Service Commission to have violated its tariff in wrongfully terminating sewer service to a shopping center owned by intervenors-re-spondents Borgmann. On review, the circuit court of Cole County affirmed the Commission order and Imperial appeals. Affirmed.

The facts applicable to the controversy are not in dispute. In 1977, the Howard-Money Construction Co. erected a shopping center in Jefferson County within the area served by Imperial. Sewer service was provided commencing October 1, 1977. Arrangements for that service had been contracted by an agreement dated September 27, 1974 and filed in the office of Recorder of Deeds for the county at that time. The service contract reflected an anticipation that ownership of the center would be transferred to other parties and, to protect Imperial, the contract specified that all obligations under the agreement “are to run with the land.” It is apparent that the contracting parties sought by the provisions of the agreement and the filing of the document of record to impose on any purchaser of the center the liability for unsatisfied obligations due Imperial for sewer service and connections.

On May 10, 1979, the center was sold to the Borgmanns. At that time, Imperial was owed $19,625.00 in unpaid connection fees for sewer service. The fees had accumulated, in • part, because connection charges for individual shops in the center could not be calculated until the business of each tenant and the amount of sewer discharge was determined upon occupancy. As the various spaces were rented over a period of time, the connection fees were calculated resulting in the aggregate of fees unpaid on the date of the ownership transfer. The amount, however, was not recorded as a supplementary lien statement to the document filed in 1974 nor did Imperial attempt to perfect a lien in any other manner.

After the property transfer, Imperial corresponded with Howard-Money in an attempt to collect the fees and furnished copies of the letters to the Borgmanns. Disconnection of sewer service was threatened and on August 1,1979, payment not having been received, Imperial dispatched equipment and a crew which dug up the sewer line and terminated service. The following day, payment of the original charges plus a reconnection fee of $3,241.08 was made to Imperial on behalf of Borgmanns and service was restored.

The Borgmanns filed a complaint before the Commission contending that the disconnection of sewer service to the center by Imperial was unlawful because in violation of Imperial's tariff in that Imperial had no authority to charge a subsequent property [217]*217owner for fees incurred by a previous owner. The Commission report and order, among other findings, sustained the complaint on the grounds that Imperial violated its tariff in failing to collect the fees from the former owner of the shopping center when those fees became due, and in failing to give 30 days notice to the Borgmanns before terminating service. The substance of the Commission’s decision, particularly with reference to the contract between Imperial and Howard-Money, is summarized in the following extract from the Commission report:

“Respondent’s tariffs clearly state that the bill for connection fees was to be received before rendering service or in the case of additional fees, such bills should be immediately collected. Respondent cannot look to a new customer for a bill owed by an old customer. Respondent cannot try to modify this result by contract. To do so would allow the tariff to be subject to change by contracts between Respondent and its customers.”

In the principal point raised on this appeal, Imperial contends the Commission report to have been in error first, because a determination that fees must be collected immediately after they become due is unworkable and in some cases impossible and second, because Imperial’s tariff authorizes a lien upon the real estate in question to secure payment of delinquent charges.

In the context of this case, involving only the question of whether disconnection of service to the Borgmanns was lawful, it is unnecessary to consider whether the Commission was correct in holding Imperial to a requirement for immediate collection of fees. If, as we conclude, there can be no liability upon a subsequent customer for the unpaid account of a former customer, the details of how the charges were accumulated are irrelevant. We do note, however, that the Commission findings on the subject are sustainable only in those circumstances where initial sewer connection at a fixed fee may be deferred until the charge is paid. In other situations, reasonable business practice and the terms of Imperial’s tariff contemplate some period of time for payment of accounts after a billing is rendered. An inflexible requirement for immediate payment is unworkable and unrealistic.

As to the issue of a lien encumbrance following title to the real estate and enabling Imperial to collect charges from subsequent owners, a more complex and far-reaching proposition warrants careful review of the issue. At the outset, it is to be noted that Imperial’s tariff does provide for the perfection of such a lien. Rule 4.11 of the tariff authorizes Imperial to record the legal description of property on which sewer charges are more than 30 days delinquent, the names and addresses of the title owners and the amount due. According to the tariff, the amount then becomes a first lien on the property and, presumably, is an obligation ultimately enforceable by foreclosure.

The decision by the Commission which rejected Imperial’s lien claim under the recorded service agreement of 1974 was based on a conclusion that the contractual effort to acquire the lien was inconsistent with the tariff which, in the Commission’s view, prohibited imposition of liability on subsequent customers for earlier outstanding bills. The plain language of the tariff, however, is otherwise because the opportunity to acquire a lien necessarily would burden subsequent customers with potential liability for charges they did not incur. At least in broad outline, the tariff does purport to authorize a procedure under which Imperial could have acquired rights against the Borgmanns on account of the connection charges owed by Howard-Money.

The parties have not briefed and the Commission did not directly consider whether the tariff provision for recording liens as to unpaid charges was valid nor does Imperial present any viable contention that the recorded 1974 agreement effectively complied with Rule 4.11 of the tariff. Of course, at the time the agreement was filed, the charges had not been incurred, construction of the center being then some three years in the future. No recording [218]*218was thereafter made to indicate what charges were due and the correspondence which provided the written notice to the Borgmanns was subsequent to their purchase of the center. At most, the recorded agreement may be contended to have placed the Borgmanns on notice to inquire of Imperial or of the sellers whether charges were outstanding and a subject of a lien claim under the agreement.

Although the premise is highly dubious, it is assumed for purposes of the point that the 1974 agreement, filed as it was in the office of recorder of deeds and including a legal description of the property, was facially in compliance with Rule 4.11 of the tariff.

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664 S.W.2d 215, 1983 Mo. App. LEXIS 3793, 1983 WL 813513, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-imperial-utility-corp-v-borgmann-moctapp-1983.