Case Title: City of Dardanelle, Arkansas v. City of Russellville, Arkansas; City Corporation; and Arkansas Department of Environmental Quality

Citation: 

Docket Number: 

State: arkansas

Court: Arkansas Supreme Court

Date: 2007-09-20T00:00:00Z

Document:
SUPREME COURT OF ARKANSAS,

No. 07-195

CITY OF DARDANELLE, Ophica Davered February 28, 2008
APPELLANT,
APPEAL FROM THE POPE COUNTY
vs. CIRCUIT COURT,
NO. CV-2006 241,
CITY OF RUSSELLVILLE, CITY | HON. JOHN S. PATTERSON, JUDGE,
CORPORATION, AND ARKANSAS
DEPT. OF ENVIRONMENTAL
QUALITY, AEEIRMED.
APPELLEES,

 

ANNABELLE CLINTON IMBER, Associate Justice

‘The instant appeal arises out of a longstanding dispute between Appellant City of
Dardanelle and Appellees City of Russellville and City Corporation. Dardanelle filed a
breach-of-contract action in the Pope County Circuit Court asserting that a joint resolution
reached by the cities in May 2002 was a binding contract, which Russellville had breached.

‘The circuit court dismissed the complaint pursuant to Arkansas Rule of Civil Procedure
12(6)(6) (2007), based on the reasoning that the joint resolution was not a. contract.

Dardanelle now appeals the circuit court's order, arguing that the circuit court erred in
<ismissing ts complaint and in finding that the joint resolution was nota contract. Because
the instant appeal involves an issue of substantial public interest, we have jurisdiction over the
instant case. Ark, Sup. Ct. R. 1-2(0)(4) (2007)

City Corporation is the operator of Russllvlle's wastewater treatment facility. For
several years, City Corporation has been discharging its sewage effluent into Whig Creek, a
nearby body of water. In the mid-1990s, City Corporation became aware that it would no
Jonger be able to meet the effluent discharge requirements under its permit from the Arkansas
Department of Environmental Quality (ADEQ) unless extensive improvements were made
to the treatment icity, or the discharge of sewage effluent was redirected into a larger body
of water. In 1996, City Corporation and Russellville applied to the ADEQ for a permit to
build pipeline that would discharge the effluent from the plant directly into the Arkansas
River.

Rusellville's permit application met considerable opposition from Dardanelle because
the proposed pipeline outfall would be located downstream from the Dardanelle Dam,
directly across the river from the Dardanelle City Park, ‘The outfall would also have been
across from a well that provided part ofthe city’s water supply, and, apparently. the hydrology
of the well water correlates to the water in the river. In addition, Dardanelle contended that
the water in the area of the proposed outfill barely flows during the summer months.

To avoid the possible contamination ofits lands and water, Dardanelle recommended
that Russellville build the pipeline downstream of the Dardanelle city limits. A downstream
pipeline, however, would cover a longer distance and would require a pumping system. The
suggested adjustments would add almos six million dollasto the cost ofthe project. Because
the extra funding was not available, Russellville declined to adopt Dardanelles plan.

‘On May 10, 2002, after years of disagreement, city council members for both cities and

‘members of City Corporation’s board of directors signed a “Joint Resolution.” The complete

2
resolution is quoted below:

WHEREAS, the cities of Dardanelle and Russellville, Arkansas and City
Corporation, operator of the Water and Sewer Systems for the City of
Russellville, Arkansas, have agreed with each other to cooperate in the pursuit
ofall avenues of funding for the proposed municipal out sewer line from the
City of Russellville Treatment Plant to a point downstream of the present city
limits of Dardanelle on the Arkansas River, and

WHEREAS, the partes are in agreement with the proposed location for
the municipal outfall sewer line from the City of Russellville Treatment Plant
to a point downstream of the present city mits of Dardanelle on the Arkansas
River, and

WHEREAS, in order for this endeavor to be a successful venture, the
cooperation of all concerned will be necessary.

NOW, THEREFORE, BEIT RESOLVED by the City Council ofthe

City of Dardanelle, and the City Council of the City of Russellville, and the

Board of Directors for City Corporation that we go on record as approving this

agreement and urge all citizens of Yell and Pope County to work together in

2 united effore to obtain funding and approval for the municipal outfall sewer

line for the City of Russellville.

Russellville ako compiled a document that was circulated to the public, entitled
“Russellville Dardanelle Cooperative Construction Effort for a Wastewater Outfill Line to
the Arkansas River.” The plan contained a copy of the resolution, an explanation of the
ongoing dispute between Russellville and Dardanelle, an estimate of the cost for the
downstream pipeline, and maps showing the proposed location of the downstream pipeline.
Governor Mike Huckabee wrote a letter addressed to the Arkansas Congressional delegation
lending his support to the cities’ resolution and urging an allocation of federal funds for the

project. Representatives from both Russellville and Dardanelle traveled to Washington, D.C.,

to obtain federal funding for the downstream-pipeline project, but no finding was available.

 
‘On March 29, 2005, Russellville ceased efforts to obtain funding for the downstream
Pipeline and applied to the ADEQ for a permit to allow a pipeline outfill at the origina,
upstream location. On May 18, 2006, the ADEQ issued a draft permit for public comment,
indicating its intent to issue a final permit.’ Dardanelle then filed a complaint in the Pope
‘County Circuit Court, against Russellville, City Corporation and the ADEQ alleging that
the joint resolution was a contract that Russellville breached when it reapplied for the
upstream: pipeline permit. Dardanelle requested specific perfomance of te joint resolution
and an injunction preventing Russellville from building the pipeline upstream.

Russellville fled a motion to dismiss under Arkansas Rule of Civil Procedure 12(6)(6),
arguing that the joint resolution was not a contrat; rather, the resolution was merely 2 non-

binding agreement to cooperate in the effort co obtain funding for the downstream pipeline.

 

‘Afer a hearing on the motion, the cireuit court entered an order dismissing Dardanelle’s
‘complaint, based upon its conclusion that the joint resolution did not contain the essential
clements ofa contract

Under Ark, R. Civ, P. 12(6)(6), circuit court may, upon a party's motion, dismiss
a complaint that fils to state faets upon which relief can be granted. Ark. R. Civ. P, 12(b)(6)
(2007). When reviewing a circuit cour’ dismissal pursuant to Ark. R. Civ. P. 12(b)(6), this
‘court treats the facts alleged in the complaint 2s true and views them in the light most

favorable to the plaintiff. Branscumb v, Freeman, 360 Ark. 171, 200 S.W.3d 411 (2004). In

"A inal permit was issued on January 23, 2007, and the issuance of the permit is
currently being appealed to the Arkanias Pollution Control & Ecology Commission.

s
viewing the facts in the light most favorable to the plaintif, the facts should be liberally
construed in the plaintiffs fivor, Id, Our niles require fact pleading and a complaint must
state facts, not mere conclusions, in order to entitle the pleader to relief. Id.

Arkansas Code Annotated § 14-54-101 outlines the rights and obligations of
‘municipalities in Arkansas and specifically states that a municipality has the power to enter
into “contracts” and to “associate with other municipalities for the promotion of their
general welfire.” Ark, Code Ann. § 14-54-101 (2), (4) (Repl. 1998 & Supp. 2007). ‘The
general rule is that where a municipality's charter commits the decision of a matter to the
couneil alone, and is silent as to the mode of exercise, the decision may be evidenced by a
resolution. MCQUILLIN, MUNICIPAL CORPORATIONS § 15:6 (Bd. ed. 2004). This is
especially true when applicable to ministerial act, or administrative business ofa municipality.
Id. However, a municipality's ability to act is tempered by its charter and other applicable
laws. Id, Given that Ark. Code Ann. § 14-54-101 specifically allows for municipalities to
contract and because nothing in the record indicates a limitation on either city’s ability to
contract, we conclude that both Russellville and Dardanelle were capable of making a
contract by resolution.

Although there is a dearth of Arkansas case law regarding contracts between
government entities, the leading treatise on municipal corporations informs us that contracts
between municipalities ae considered tobe the same 2s contracts between natural persons and
are governed by the same rules as to validity and effect, as well as the same rules of

construction. See MCQUILLIN, MUNICIPAL CORPORATIONS §§ 29.116-29.117 (3d. ed.

 
1999). Additionally, the same remedies that are available to natural persons are also available
to municipalities, including specific performance and injunctions. 1d. at §§ 29-123, 29-128,

‘The essential elements ofa contract are (1) competent parties, 2) subject matter, (3)
legal consideration, (4) mutual agreement, and (5) mutual obligation, Williamson v. Sanofi
Winthnop Pharmaceuticals, 347 Ark. 89, 60 S.W.34 428 (2001). ‘This court cannot make a
contract forthe parties but can only construe and enforce the contract that they have made;
and if there is no meeting of the minds, there is no contract, Id Moreover, the terms of a
contract cannot be so vague as to be unenforceable. See Ciba-Geigy Corp. v. Alter, 309 Ark.
426, 834 S.W.2d 136 (1992). The terms of contract are reasonably certain if they provide
abasis for determining the existence ofa breach and for giving an appropriate remedy. Id.

Despite Dardanelle’s arguments to the contrary, the terms of the joint resolution are
simply too vague to constitute a legally binding agreement. Specifically, the terms are not
certain as to the partes’ obligations. One of the essential elements ofa contract is mutuality
‘of obligations, which means that “an obligation must rst on each party to do or permit to be
done something in consideration of the act or promise of the other; that is neither party is
bound unless both are bound.” ‘Townsend v. Standard Indus, 235 Atk. 951, 954, 363 S.W.24
535, 537 (1962). A contract, therefore, that leaves it entirely optional with one of the parties
25 to whether or not he will perform his promise would not be binding on the other,
Showmethemoney Check Casher, Inc. v. Williams, 342 Ark, 112, 27 S.W.3d 361 (2000)
Dardanelle assers that the joint resolution contains obligations in the form of the cities

mutual promises to cooperate in pursuing funding and in locating the pipeline outfall

6
downstream. We disagree.

‘The joine resolution states that the parties agreed to “cooperate in pursuit ofall avenues
of funding for the proposed municipal outfall sewer lin.” (Emphasis added.) “Cooperate”
js a nebulous term, meaning to “work or act together.” OXFORD AMERICAN DESK
DICTIONARY 167 (24. ed. 2001). As used in the joint resolution, “cooperate” indicates, at
‘best, thatthe cities agreed to help each other in obtaining funding. Yet, there isno indication
ofthe length oftime or the extent to which the cities must work together. Most importantly,
the joint resolution does not provide aay explanation as to when a party will be considered
to have breached the agreement by not “cooperating” or, in other words, by not being
helpful. In sum, the terms of the resolution are too uncertain to establish an obligation as to
cither party. Accordingly, we affirm the circuit court's decision to dismiss Dardanelle’s
complaint

GLAZE, J, not participating.