City of Columbia v. Palmetto Pointe

THE STATE OF SOUTH CAROLINA In The Court of Appeals City of Columbia, Plaintiff, Respondent, v. Palmetto Pointe Limited Partnership, Defendant, Appellant, AND Palmetto Pointe Limited Partnership, Third-Party Plaintiff, Appellant, v. Michael J. Mungo Co., Inc., M. Stewart Mungo, Stephen W. Mungo, and The Mungo Company, Inc., Third-Party Defendants, Respondents. Appeal From Richland County Joseph M. Strickland, Master-in-Equity Unpublished Opinion No. 2003-UP-668 Submitted October 6, 2003 – Filed November 17, 2003 AFFIRMED Mark Weston Hardee, of Columbia, for Appellant. Frederick A. Gertz and Kenneth E. Gaines, of Columbia, for Respondents. PER CURIAM: In this declaratory judgment action, the master in equity held Palmetto Pointe, L.P., was obligated to purchase certain sewer tap certificates from the Mungo Company under pain of termination of sewer service by the City of Columbia. Palmetto appeals. We affirm the master’s order. [1] FACTS At the center of this case is a 1987 contract entered into between the City and Mungo. Pursuant to this contract, Mungo agreed to design and finance the extension of the City’s sewage facilities into a previously unserved area northwest of Columbia. In exchange, the City agreed to grant Mungo the right to sell a sufficient number of “sewer tap certificates” to recoup the cost of extending the sewer line. These sewer tap certificates are redeemed for a connection to the City’s sewer and wastewater collection treatment system. As a general rule, the certificates must be presented to the City before service can be initiated. In 1994, Palmetto’s general partner purchased land near Irmo from Mungo’s predecessor and various affiliated entities. The final contract did not include the purchase of sewer tap certificates, but a closing statement noted Palmetto would be obligated to purchase the certificates from Mungo as needed in the future. Palmetto planned to build a 181 unit apartment complex on the property and thus would have to purchase 181 sewer tap certificates. As the first phases of the apartment complex neared completion, Palmetto purchased 111 sewer tap certificates from Mungo. Soon thereafter, Palmetto requested and obtained sewer service from the City for 111 units. Contrary to its general policy, the City initiated service without requiring that Palmetto deliver the sewer tap certificates, merely accepting Palmetto’s assurance that it had purchased the certificates from Mungo and would provide them to the City. After all 181 units of Palmetto’s project were completed, Palmetto obtained sewer service for the final 70 units without purchasing the sewer tap certificates, paying only the sewer expansion fee. Over a year later, the City realized it had not obtained any sewer tap certificates for Palmetto’s project. The City notified Palmetto of the oversight and demanded delivery of the 181 required certificates. Palmetto refused to comply. Palmetto would not even provide the 111 certificates it had already purchased. In response, the City brought this action to recover all 181 certificates or, in the alternative, to be permitted to terminate sewer service to Palmetto’s project. During the course of this litigation, Palmetto turned over the 111 certificates it had purchased and the City amended its request for relief to seek recovery of only 70 certificates. The trial court entered judgment in the City’s favor, allowing it to terminate Palmetto’s sewer service to the last 70 units if sewer tap certificates for these units were not delivered within 30 days of the court’s order. SCOPE OF REVIEW Palmetto asserts that in this declaratory judgment action the City is seeking equitable relief and therefore this court is at liberty to review the facts in accordance with our own view of the preponderance of the evidence. Townes Assocs. Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976). The City does not contest that assertion, and we will therefore apply that scope of review. Though we are permitted a broad scope of review, we do not disregard the findings of the master who saw and heard the testimony and evidence and was in a better position to evaluate the credibility of the witnesses. Tiger, Inc. v. Fisher Agro, Inc., 301 S.C. 229, 237, 391 S.E.2d 538, 543 (1989). LAW/ANALYSIS Palmetto argues it is not required to furnish the City with the 70 remaining sewer tap certificates because it never agreed to provide these certificates when it requested service from the City. We disagree. Evidence was presented at trial that all persons or entities requesting sewer service from the City are required to purchase tap certificates before service begins. John Dooley, the City’s Director of Utilities and Engineering when this cause of action arose, provided detailed testimony as to the City’s procedures when initiating sewer service for new customers. Dooley explained: We wouldn’t allow anyone to tie onto a sewer system if they didn’t – I mean, it’s commonly referred to as paying your tap fee. But in fact there are two parts to it, the plant expansion fee, which is a dedicated sum that goes towards expansion of the waste water treatment plant, and then the tap fee itself. So if you only paid one, you haven’t really paid for service yet. You’ve only paid the one component. Dooley’s testimony is supported by documentary evidence in the record. Prior to the start of construction, City officials sent two letters to Palmetto’s developers explaining the policy and the need for the sewer tap certificates. This requirement is also carefully spelled out in the agreement between the City and Mungo. We conclude, therefore, that substantial evidence supports finding Palmetto was obligated to provide the City with the 70 additional sewer tap certificates. Palmetto alternatively argues the City is estopped from terminating service because the City initiated service before it had the certificates in hand. We disagree. To prove estoppel against the City, Palmetto must show it (1) lacked knowledge and the means of knowledge of the truth as to the facts in question, (2) justifiably relied upon the City’s conduct, and (3) prejudicially changed its position. Greenville County v. Kenwood Enters., Inc., 353 S.C. 157, 171-72, 577 S.E.2d 428, 435 (2003); Grant v. City of Folly Beach, 346 S.C. 74, 80, 551 S.E.2d 229, 232 (2001). Palmetto has failed to provide evidence sufficient to prove any of these required elements. First, Palmetto clearly knew or should have known it was obligated to purchase the tap certificates. As described above, representatives of the City notified Palmetto at the outset, both orally and in writing, that the tap certificates must be provided. Palmetto’s purchase and delivery of 111 certificates demonstrates it knew the purchase of tap certificates was required. Second, Palmetto failed to show it justifiably relied on anything the City said or did. Although the City clerk told Palmetto it could deliver the sewer tap certificates after service started, there is no evidence the clerk indicated the certificates would not be required. To the contrary, the clerk testified she told Palmetto the certificates must be purchased from Mungo. Regardless, Palmetto offered no evidence that it relied on any authorized statement made by an agent of the City. Though governmental bodies are not immune from the estoppel doctrine where its officers or agents act within the proper scope of their authority, the government “cannot be estopped . . . by the unauthorized or erroneous conduct or statements of its officers or agents.” South Carolina Coastal Council v. Vogel, 292 S.C. 449, 453, 357 S.E.2d 187, 189 (Ct. App. 1987), appeal dismissed, 292 S.C. 449, 362 S.E.2d 646. Third, Palmetto failed to show any “prejudicial change in position.” The evidence unequivocally demonstrates Palmetto knew before construction even began that it was required to purchase the sewer tap certificates. Simply avoiding full payment for sewer service is not the type of “change in position” contemplated under the equitable doctrine of estoppel. Because sufficient evidence supports the master’s finding that Palmetto was obligated to purchase the required sewer tap certificates and that the City was not estopped from enforcing compliance, the master’s order is AFFIRMED. STILWELL, HOWARD, and KITTREDGE, JJ., concur. [1] We decide this case without oral argument pursuant to Rule 215, SCACR.