Court Opinion

ID: 9558331
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:07:20.246097+00
Date Added: 2024-06-11T09:08:47.385554
License: Public Domain

ROBERT T. BRAITHWAITE, District Judge,
dissenting:
I respectfully dissent. I will not attempt to respond to all of the extended analysis of the majority. Stripped to its essentials, the issue in this ease is whether district.courts should be installed as profit referees in water sale contracts between municipalities and nonresidents. My view is that the majority *336opinion reverses present Utah case law and mandates unneeded and unworkable guidelines that are not required by the Utah Constitution, Utah statutes, or sound public policy.
1. There is no constitutional or statutory requirement that municipalities provide water to nonresidents.
Article XI, section 6 of the Utah Constitution requires municipal corporations to preserve, maintain, and operate their water systems to supply their residents with water at reasonable charges. There is no similar constitutional or statutory mandate regarding nonresident users.
2. Nonresidents have no inherent right to receive municipal services.
A person who is not a resident of a nearby municipality is not subject to the jurisdiction of that municipality. The town’s taxes, ordinances, and regulations have no effect outside of town limits.1 By the same token, the nonresident has no standing to demand municipal services. Nonresidents pay no town taxes and do not participate in electing representatives or governing the town. They do not have to pay the bills if the town incurs liabilities, cash shortfalls, or other budgetary problems from operating the town, including water departments.
With respect to providing service outside its territorial limits, municipal corporations may maintain waterworks, “and they may sell and deliver the surplus product or service capacity of any such works, not required by the city or its inhabitants, to others beyond the limits of the city.” Utah Code Ann. § 10-8-14(1). The decision whether to sell water outside city limits rests solely with the town. No Utah statute or case law states otherwise.
3. Should municipalities and nonresidents choose to contract for the sale and purchase of surplus water, they should continue to be allowed to do so freely, without oversight by a “profit referee.”
Until this case, municipalities and nonresidents have been allowed to contract freely for the sale and purchase of surplus water, without the validity of the contracts being contingent upon approval by a “profit referee.”
Specifically, in County Water System v. Salt Lake City, 3 Utah 2d 46, 278 P.2d 285 (1954), this court determined that the Public Service Commission has no jurisdiction over the sale of a municipality’s surplus water outside the municipality’s boundaries. The court made the determination on the basis that allowing such review would be an unconstitutional delegation of power to a special commission. The court also noted:
[Tjhere are numerous considerations which make it seem quite impractical for the city to be subjected to such regulation and control [by the PSC], including the fact that it would be an almost impossible task, both for the city and the Commission to analyze the city’s finances with respect to construction, maintenance and operation costs of its water department, and apportion them between services rendered within and without the city limits.
Id., 278 P.2d at 289 (emphasis added). The majority opinion now requires that district courts undertake such an admittedly “impossible task.”
This ease effectively overturns County Water System, substituting a district court for the Public Service Commission to determine what is and is not a reasonable profit. District courts are ill prepared to make such marketplace decisions, nor should they be called upon to do so.
This court has rejected similar attempts in other areas of the law, absent unconscionability in the contract. In a recent landlord/tenant ease, Woodhaven Apartments v. Washington, 942 P.2d 918 (Utah 1997), this court upheld the ruling of the court of appeals with respect to unconscionability, which quoted two earlier Supreme Court opinions, Resource Management Co. v. Weston Ranch & Livestock, 706 P.2d 1028, 1041 (Utah 1985) (an oil and gas royalty contract case), and Bekins Bar V Ranch v. Huth, 664 P.2d 455, 459 (Utah 1983) (a debtor/creditor case) (“Al*337though courts will not be parties to enforcing flagrantly unjust agreements, it is not for the courts to assume the paternalistic role of declaring that one who has freely bound himself need not perform because the bargain is not favorable.”). This court quoted with approval the court of appeals’ language stating that “ ‘it is still the law in Utah that parties may contract at arms length without the intervention of the courts to rescue one side or the other from the result of that bargain.’ ” 942 P.2d at 924 (quoting Woodhaven Apartments v. Washington, 907 P.2d 271, 274 (Utah Ct.App.1995)).
This case represents a financial decision to be made by a nonresident. It is a situation played out frequently across the state. The decision the nonresident faces is this: Is it better for me financially to stay outside town limits, paying lower taxes but higher service rates (either town nonresident rates or the extra expense of installing a'well), or is it better for me to join the town, paying lower service rates but higher taxes?
Residents located just beyond town limits may make frequent use of a town’s streets, police and fire protection, parks, playgrounds, recreational programs, libraries, and other services, incurring no expenses through the town’s real property taxes to pay for the facilities, the maintenance and operating costs, and the salaries of employees required to provide and operate such governmental amenities. Towns such as Torrey may in reality be using nonresident water rates to make up some of this difference. Doing so, if they are, would be neither illegal nor unconscionable.
There has been no showing that the Town of Torrey in this case, or towns generally, pursue disadvantaged nonresidents to coerce them into agreements charging unreasonable rates. This case represents the more typical situation: A nonresident purchases land outside a town yet approaches the town, requesting town services. The parties dicker and may or may not reach an agreement. If no agreement is reached, the nonresident may pursue annexation to the town and obtain all the rights (voting, resident rates, etc.) and all the responsibilities (town taxes, zoning, etc.) of residency. Both statutes2 and case law3 favor annexation to municipalities where municipal services are needed outside the municipal limits.
This court should continue to allow parties to negotiate freely and should not begin to regulate the agreements they reach in an effort to “even” rates out for nontaxpaying nonresidents.
As a practical matter, it may be that as a result of this ease, both the majority’s belief that the strict contract guidelines adopted will be beneficial and my belief that they will not may very well be moot. The reaction of municipalities may very well be simply not to enter into such contingent, voidable contracts. This will benefit neither the nonresidents nor municipalities with surplus water.
I would affirm the district court.
ZIMMERMAN, C.J., concurs in Judge ROBERT T. BRAITHWAITE’s dissenting opinion.
Having disqualified himself, STEWART, Associate C. J., does not participate herein; District Judge ROBERT T. BRAITHWAITE sat.

. Utah Code Ann. §§ 10-1-101 to-203.

. Utah Code Ann. § 10-2-401(3).

. Sandy City v. Salt Lake County, 827 P.2d 212, 222 (Utah 1992).