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Unpublished Opinion No. 2003-UP-668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.