Case Title: Handy v. City of Rutland

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1989-03-01T00:00:00Z

Document:
NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 88-028


Paul L. Handy and                            Supreme Court
Catherine M. Handy

     v.                                      On Appeal from
                                             Rutland Superior Court
City of Rutland
Town of Rutland                              March Term, 1989



James L. Morse, J.

Allen D. Webster and Mary G. Kirkpatrick of Lisman & Lisman, Burlington, for
   plaintiffs-appellants

Henry C. Brislin, City Attorney, Rutland, for defendants-appellees



PRESENT:  Peck and Dooley, JJ., and Springer (Ret.) and Connarn (Ret.),
          D.JJ., and Katz, Sup. J., Specially Assigned


     PECK, J.   Plaintiffs, owners of a restaurant in the Town of Rutland,
appeal from a decision of the superior court declaring that defendant City
of Rutland has authority to impose and collect from them a one-time hookup
fee for connecting to the City's sewage disposal system.  We affirm.
     The parties have stipulated to the facts.  The City of Rutland owns and
operates a sewage disposal facility.  In 1973, the City entered into an
agreement with the Town of Rutland to take and treat up to 55,000 gallons of
town sewage per day from a town line which hooks into the city system.  User
rates were calculated on the amount of water used, and the City retained
final authority to approve all future connections to the town sewer line.
     In 1984, the City commenced work on expanding its treatment facilities,
and entered into a new agreement with the Town.  That agreement established
three user rates: (1) city users would be charged a "basic" rate related to
water usage and operating costs; (2) current town users would be charged
five times the basic rate; and (3) new town users would be charged five
times the basic rate plus an ad valorem fee equal to 20% of the property tax
levied by the Town on the property.  The agreement further provided that
during the interim period between the signing of the agreement and the
completion of the new treatment facility, the City was free to negotiate any
rate "it deem[ed] appropriate" with new town users.
     Plaintiffs began operating a restaurant in the Town of Rutland during
the interim period in March of 1986.  In June of 1985, plaintiffs' prede-
cessor in title had applied to the City's board of aldermen for approval to
hookup to the city sewer lines.  The board referred the matter to the inter-
municipal agreement committee (IAC), which stated that it would recommend
approval of a sewer contract for the restaurant after negotiation between
the restaurant and the city attorney and resubmission of that contract to
the IAC.  There was no discussion of a one-time hookup fee.
     In the fall of 1985, the city attorney called plaintiffs and advised
them that their hookup had been approved, but that it would not be cheap  --
possibly costing as much as five times the City rate plus an ad valorem
tax.  He further advised plaintiffs that there was nothing for them to do at
that point, and that he would contact them again to sign some papers.  At
the end of the conversation, the city attorney was under the impression that
plaintiffs would contact him to sign an agreement when the hookup occurred.
Plaintiffs' understanding was that the city attorney would contact them
regarding the final sewer use rate.  Sometime after that conversation and
before plaintiffs' restaurant opened for business in March of 1986, plain-
tiffs hooked up to the city sewer line.
     Two or three weeks after the restaurant opened, the new city attorney
told plaintiffs that their hookup was unauthorized.  He stated that the
board of aldermen would probably charge the new town rate, but that some
board members also wanted a one-time hookup fee.  After several negotiating
sessions and IAC meetings, the board of aldermen approved a hookup fee of
$10,170, which represented $1.00 for each gallon per day allowed by plain-
tiffs' Act 250 permit.
     Plaintiffs refused to pay the one-time hookup fee and filed suit in
superior court to stop the City from imposing it.  Plaintiffs claimed that
the fee was not authorized by state statute and that imposition of the fee
constituted an antitrust violation.  The City counterclaimed to force
plaintiffs to unhook and pay treble damages for the unauthorized hookup.
The superior court held that the hookup fee was legal, but that the City was
estopped from asserting that the hookup was without approval because the
former city attorney had apparent authority to inform plaintiffs of the
City's final approval.  On appeal, plaintiffs reassert the arguments made
before the trial court, and contend that the court erred by not considering
whether the representations of the former city attorney estopped the City
from charging the hookup fee.


                                    I.
     Plaintiffs first argue that the trial court's conclusion that the City
has the statutory authority under 24 V.S.A. { 3615 to charge a one-time
hookup fee for sewer service was erroneous.  We disagree.
      Both parties concede "that, absent a home rule constitutional
provision, a municipality has only those powers and functions specifically
authorized by the legislature, and such additional functions as may be
incident, subordinate or necessary to the exercise thereof." Hinesburg Sand
& Gravel v. Town of Hinesburg, 135 Vt. 484, 485-86,