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Overview

Where Appellants (non-resident property owners) alleged Town had a duty to provide water/sewer service to their property, the Court of Appeals affirmed that Town's status as designated management agency under the Clean Water Act did not create a duty to provide sewer service. Town's ordinances also did not create a duty to provide water/sewer service to non-residents. Appellants sufficiently alleged facts showing that Town had a duty to provide services based on an easement. Appellants also sufficiently alleged claims for breach of contract, equal protection, estoppel, mandamus, injunction and declaratory relief.

Summary

Owners of property surrounded by Town limits contracted to sell property to Developer. Owners produced 1985 agreement granting easement to Town for water facilities in exchange for promise that Town would provide water service to the property in the future, provided that the property was annexed into Town limits at that time. Town's facilities occupy the property as a result of the easement. Owners had constructed sewer lines attached to Town's system with Town's full knowledge and complied with all inspection requirements.  Developer sought to have property annexed into Town limits. Town's planning commission recommended annexation, but Town Council denied petition and denied request to provide water/sewer service.
Owners and Developer (Appellants) argued that Town violated its ordinances by ruling on the water/sewer service application and that Town violated their equal protection rights by providing service to similarly situated owners.  The circuit court granted Town's motion to dismiss.
The Court of Appeals found that Appellants sufficiently alleged facts showing Town's duty to provide water/sewer service based on the easement. Appellants included the contract and alleged a breach. The Court found it was improper to consider Town's contractual defense-that the duty was subject to annexation (condition precedent)"in analyzing the sufficiency of the complaint.
 
The Court also found Appellants sufficiently alleged an equal protection violation. Appellants sufficiently alleged facts that Town violated the law's criteria that 1) the town's classification must bear a reasonable relation to the legislative purpose sought; 2) similarly situated members of a class must be treated similarly; and 3) classification must have rational basis. Appellants alleged that Town routinely provided water/sewer service to similarly situated property owners.
 
 The Court affirmed that Town's status as a designated management agency under the Clean Water Act did not create a duty to provide water/sewer service. Appellants thus abandoned their claim alleging otherwise because it was based on a conclusory proposition of law.
 
The Court also held that because Appellants did not refer to any specific ordinance that Town violated or any specific ordinance creating a duty to provide water/sewer service, there was no valid theory of recovery on that claim. Appellants did not provide any law supporting the theory that Town had no authority to rule on its application for service. These claims were abandoned.  Appellants also failed to sufficiently plead a substantive due process claim.
 
Appellants did, however, sufficiently plead a claim for equitable estoppel because they alleged facts that could establish the law's criteria that Appellants 1) lacked knowledge and means of knowledge of Town's basis for denying the application; 2) justifiably relied on Town's actions; and 3) prejudicially changed their position.
 
Finally, the Court found that Appellants sufficiently pled claims for mandamus, injunction and declaratory relief. Appellants were entitled to seek declaratory relief because of the written contract. They were entitled to seek an injunction because they alleged irreparable harm and no adequate remedy at law if the water/sewer service was not granted. They also asserted facts supporting the mandamus criteria that 1) Town had a duty to perform; 2) the duty was not discretionary; 3) Appellants had a specific legal right; and 4) Appellants had no other remedy.