Westmere Group, Inc. v. Town of Darien (2013)

MEMORANDUM OF DECISION

Nature of the Proceeding

This is an action brought by plaintiff developer against the town of Darien.   In connection with a subdivision for which septic systems would not be adequate, Plaintiff entered into an agreement with the town whereby plaintiff would construct a sewer line servicing the properties in the subdivision, with the potential if not expectation that there would be additional connections to the new sewer line, both directly and via one or two municipal extensions.   (The to-be-constructed sewer line, generally referred to herein as the Westmere sewer line,¹ would be connected to the town's sanitary sewer system, for ultimate disposal of waste.)   Plaintiff acquired the property as well as the plans for development from a prior developer, with the town's approval of the plan for dealing with sewage as an explicit condition of the closing.

Although the plans were approved and the closing on the sale of the property occurred in or around December 1999, the construction of the Westmere sewer line servicing the subdivision (including its connection to the town's existing sewer system) did not conclude until approximately 2005 (see footnote 5, below).   Further, despite the expectation that there would be seven houses in the subdivision, plaintiff constructed or caused to be constructed only three, with the other four lots remaining vacant through the time of trial.   In or around 2006, the town constructed a sewer line servicing Brushy Hill Road (hereafter, Brushy Hill extension), which sewer line was connected to the Westmere sewer line as a means of connecting into the town's sanitary sewer system.

In 2006, plaintiff started this action.   Although plaintiff attempted to assert a number of theories over the years, the case was tried on the basis of a complaint asserting two theories—breach of contract and unjust enrichment.   In addition to the two theories seeking monetary compensation, both sides sought temporary and permanent injunctive relief relating to the connection of the Brushy Hill extension to the Westmere sewer line that had been constructed (and continued to be owned) by plaintiff—the town sought to prevent plaintiff from disconnecting the Brushy Hill extension and plaintiff permission to disconnect the Brushy Hill extension from the Westmere line.

Evidence on the monetary claims in both counts started on May 14, 2013.   Both the contract damages claim and the unjust enrichment claim were submitted to the jury, the court concluding that the nature of the case made it appropriate to submit the nominally equitable claim for unjust enrichment to the jury.   The jury returned a verdict ² for plaintiff, on the unjust enrichment count only, on May 24.   Both sides filed post-verdict motions, with both challenging the amount of the award, and both seeking to have the verdict set aside.³

The court then proceeded to hear evidence on the purely equitable issues still outstanding.   As noted above, plaintiff seeks to be allowed to disconnect the Brushy Hill extension from its sewer line while the town seeks to compel plaintiff to continue to operate the combined Westmere–Brushy Hill line (all of which is connected, through the Westmere line, to the town's municipal system).   The court heard testimony on June 19 and 21, 2013.   The parties waived post-hearing briefs.

Findings 4

1. The plaintiff, WESTMERE GROUP, INC. (“Westmere” or “plaintiff”), is a Connecticut corporation that was and is, inter alia, in the business of developing land for residential purposes.

2. The defendant, TOWN OF DARIEN (the “Town” or “defendant”) is a municipality which, except as otherwise specified, at all times was acting through the Sewer Commission and the Commission's personnel in the relevant dealings with plaintiff.

3. On or about December 9, 1999, plaintiff and the Commission entered into a Developer's Agreement relating to plaintiff's proposed development of property that it was in the process of acquiring.

4. The agreement called for plaintiff to develop its real property located on Old Kings Highway South and Andrews Drive (“the property”) in accordance with then-existing subdivision plans known as the “Delafield Woods Subdivision” (“subdivision”).

5. The subdivision required the installation of a sanitary sewer (“Westmere sewer line” or “Westmere line”) in portions of Old Kings Highway South and Andrews Drive, in an easement which had been conveyed by plaintiff's predecessor in title to the Commission/town.

6. Plaintiff obtained all required permits, authorizations and consents necessary to commence construction of the sewer system, in May 2000, and commenced work on installation of the sewer line and all necessary appurtenances at about that time.

7. As required (and subject to agreed changes), plaintiff installed the sewer lines, a pump station, pump chamber, associated piping, a river crossing conduit, a generator conduit, road paving, generator building, plumbing equipment, electrical panel, and all other necessary equipment and facilities, all of which work was substantially completed in 2004, and capable of being used on or before July 1, 2005.⁵

8. Upon completion of the work, pursuant to Darien Code of Ordinances, Appendix C, Administrative Regulations, §§ 9–10.6 and the agreement, the plaintiff submitted an affidavit of costs to the Commission in 2005.

9. Defendant rejected the amount being claimed by plaintiff in its affidavit of costs;  no subsequent agreement was reached as to the proper costs to be allowed, resulting in the matter being submitted for determination during the jury-phase of this trial.

10. Pursuant to the agreement, the Commission was required to cause any person connecting to the sewer system to be assessed for the benefits associated with the Westmere sewer line, i.e. assessed in an amount that was the lesser of a pro-rata share of the costs of installing the sewer or the actual benefit to the connected property, as provided for Darien Code of Ordinances, Appendix C, Administrative Regulations, §§ 9–1 and 9–4(a).

11. Pursuant to the developer's agreement, the commission agreed to reimburse plaintiff in an amount equal to the benefit assessments, as and when collected, or otherwise provide a credit to plaintiff.

12. The agreement provided that one (1) year after the last lateral connection was made to the Westmere line and placed into service, plaintiff would convey all of its rights, title and interest in and to the Westmere sewer line to the Commission, but until such conveyance occurred, plaintiff owned and was responsible to operate and maintain the sewer.

13. Pursuant to the agreement, the town was authorized to connect sewer extension lines to the Westmere line, and the agreement specified that regardless of the number of properties connected to such an extension, the connection of such extension to the Westmere line would be treated as a single lateral/connection.

14. In or around the summer of 2006, the Town connected a sewer line extension serving homes located on Brushy Hill Road (“Brushy Hill extension”) to the Westmere sewer line and the Brushy Hill extension has been connected to the Darien town sewer system through the Westmere sewer line ever since.

15. The town made a determination, without consultation with plaintiff, that the benefit associated with the connection of the Brushy Hill extension to the Westmere sewer line was $38,000, and apportioned that sum among the property owners on Brushy Hill Road who connected to the Brushy Hill extension as part of their benefit assessments.

16. In or around 2006, the town tendered a check to plaintiff in the amount of $38,000, representing its claimed obligation to plaintiff as compensation for the connection of the Brushy Hill extension to the Westmere line.

17. Plaintiff refused to accept the check.

18. Although plaintiff's complaint states that “[i]n contravention to the terms of the agreement, the Town has failed, refused and neglected to reimburse plaintiff an amount equal to the costs of the assessments for all persons connecting to the sewer” (¶ 18 of fourth amended complaint), during the course of trial plaintiff stated that it was not seeking benefit assessments collected by the town for all properties connected to the Westmere sewer line but only was seeking compensation related to the connection of the Brushy Hill extension, i.e. for purposes of the litigation, plaintiff abandoned claims relating to connections to the Westmere line other than the Brushy Hill extension.

19. The jury determined that, for purposes of calculating the assessment of abutting property owners based on the cost formula set forth in Darien Code of Ordinances, Appendix C, Administrative Regulations, § 9–4(a), the total cost of the Westmere sewer line project subject to such calculation was $698,963.70 (jury response to interrogatory # 1;  see ¶ 9, above).

20. The jury determined that the town was not in breach of its contractual obligations to plaintiff relating to the construction of the Westmere sewer line.

21. The jury determined that the town's tender of a check in the amount of $38,000 to plaintiff, in relation to the connection of the Brushy Hill extension to the Westmere line, had not constituted a breach of the contract.

22. The jury determined that the benefit to the individual properties connected to the Westmere sewer line was $60,000 per property.

23. The jury determined that the town was not in breach of its contractual obligations to plaintiff relating to the operation and maintenance of the Westmere sewer line.

24. The jury determined that plaintiff had not breached the contract.

25. The jury determined that the town had not been unjustly enriched in connection with the construction of the Westmere sewer line.

26. The jury determined that the town had been unjustly enriched in connection with plaintiff's ongoing operation of the Westmere sewer line.

27. The jury's findings that the town did not breach the contract necessarily imply that the jury found nothing wrongful about the town's connection of the Brushy Hill extension to the Westmere sewer line.

28. Plaintiff acknowledged that since approximately 2008, plaintiff has been essentially dormant other than performance of its required functions relating to operation and maintenance of the Westmere sewer line.

29. Prior to going into a dormant phase, plaintiff had developed three of the seven parcels located in the subdivision, and sewer laterals connecting each of those three properties had been connected to the Westmere sewer line.

30. Plaintiff offered no proof, to the jury and/or court, of any efforts relating to development of the other four parcels in the subdivision.

31. It would be technically/theoretically feasible for the town to disconnect the Brushy Hill extension from the Westmere line, and run a separate line connecting the Brushy Hill extension to the Darien town sewer system.

32. Although plaintiff has been seeking an order of the court requiring the town to disconnect the Brushy Hill extension from the Westmere line starting with the original complaint filed in 2006, only recently has plaintiff proposed an alternate development for the as-yet undeveloped portion of the subdivision;  no formal efforts to implement any alternative development had been made as of the concluding date of the trial.

33. Ordering the town to disconnect from the Westmere sewer line would be in violation of the town's contractual rights under the agreement.

34. Subject to obtaining formal approval from the commission and/or other town authorities, the town has stated that it is willing to take over operation and/or ownership of the Westmere sewer line, notwithstanding the fact that not all properties in the subdivision have been connected to the Westmere sewer line by operating laterals.

35. No credible evidence was offered as to the incremental/marginal cost of operation of the Westmere sewer line attributable to the Brushy Hill extension.

36. As a result of changes in the size and location of the equipment needed to operate the Westmere sewer line, the easement originally conveyed to the town is not adequate for the size and location of the equipment as actually installed.

37. Pursuant to Darien Code of Ordinances, Appendix C, Administrative Regulations, § 9–10.5, any transfer to the town of a sewer line such as the Westmere sewer line would be required to include an easement encompassing the size and location of equipment as actually installed.⁶

Conclusions/Ultimate Facts

1. Based on the jury verdict and interrogatory responses determining that the town had not violated the contract between the parties by virtue of its connection of the Brushy Hill extension to the Westmere sewer line, and based on the court's own interpretation of the contract, the town's connection of the Brushy Hill extension in 2006 to the Westmere sewer line was lawful and authorized by the contract (developer's agreement).

2. Plaintiff failed to prove any basis for the court to order disconnection of the Brushy Hill extension from the Westmere sewer line.

3. Even if there were some basis on which the court could entertain an order to the town to disconnect the Brushy Hill extension from the Westmere sewer line, a balancing of the equities—economic waste, environmental risks, justifiable reliance by the town on the availability of the Westmere sewer line for extensions, plaintiff's lack of effort over the last several years to develop the remaining lots in order to satisfy the condition precedent to transfer of the sewer line, etc. militates against granting any such relief to plaintiff.

4. Until such time as plaintiff tenders and defendant accepts ownership or operational control of the Westmere sewer system (including all equipment appurtenant thereto)—whether after satisfaction of the contractual condition precedent to such transfer (one year after connection of final lateral) or based on a voluntary tender—defendant will be required to pay to plaintiff, on an annual basis, the marginal cost of operation of the Westmere sewer line attributable to the Brushy Hill extension being connected to the Westmere sewer line.

5. Any transfer of the Westmere sewer line to the town of Darien must be in compliance with the contract between plaintiff and the town as well as any applicable regulations and statutes.

6. For purposes of paragraph 4 (subject to plaintiff's ability to establish a higher percentage), 50% of the electric, water, and gas charges for operation of the Westmere sewer line will be presumed to be the marginal costs of operation attributable to the Brushy Hill extension, and defendant will be obligated to reimburse plaintiff for such expenses so long as plaintiff continues to be responsible for operation and maintenance of the Westmere sewer line.

7. Plaintiff is required to continue to operate and maintain the Westmere sewer line (including all equipment appurtenant thereto) until such time as there is a completed transfer of ownership of the sewer line to defendant, or until plaintiff grants to defendant permission to operate the sewer line (and defendant accepts such responsibility).

8. As a matter of equity, the town is required to pay to plaintiff $60,000 for the connection of the Brushy Hill extension to the Westmere sewer line, based on the generally reasonable but contextually-inappropriate (and therefore inequitable) methodology used by the town in arriving at a figure of $38,000 for that connection.⁷

Discussion

The cautionary warning—be careful what you wish for—forms something of a backdrop to this case.   Plaintiff wanted the matter submitted to a jury, including the unjust enrichment claim, but now finds itself somewhat boxed in by the jury's findings.   The court heard evidence beyond that which was presented to the jury;  in light of the purely equitable nature of the claims currently being considered, the court generally will follow the jury's findings to the extent applicable, subject to modification as warranted by the additional evidence heard by the court.

The jury implicitly found that there was an unjust quality to the obligation for plaintiff to continue to pay for the operation of the Westmere sewer line.   The jury, however, did not hear all of the evidence relating to that subject.   Evidence was presented to the court that plaintiff has been essentially dormant for the last five or so years, other than operation of the sewer line.   In response to an inquiry from the court as to whether plaintiff considered the continued operation of the Westmere sewer line to be a benefit or burden, the court understood plaintiff's response to be that it considered the Brushy Hill extension aspect to be a burden but that otherwise, for reasons discussed below, it wanted to continue to operate the line to the extent that it serviced properties within the area of the subdivision.   While the court has serious reservations about the candor of that response, yet again this may well be a matter of “be careful what you wish for ․”

Explicit and implicit aspects of the jury verdict and jury interrogatories form a backdrop for the court's decision.   The jury found that neither party had breached the contract, and given the fact that the condition precedent for the contractual provision relating to the conveyance of the sewer system to the town has not taken place (one year after the connection of the last lateral), the contract still is in effect, i.e. until such time as the final act contemplated by the agreement takes place (transfer of the sewer system), the rights and obligations of the parties as set forth in the agreement still continue in effect.   An additional implication of the jury determination that the town had not breached the contract is a refutation of the claim in paragraph 17 of the complaint that there was some level of impropriety in the town's connection of the Brushy Hill extension to the Westmere sewer line.⁸  Synthesizing these two points, the town continues to have a contractual right to have the Brushy Hill extension connected to the Westmere sewer line.   Viewing the issue from a different perspective, plaintiff has failed to articulate an adequate basis for the court to conclude that there was anything wrongful about the town's connection of the Brushy Hill extension to the Westmere sewer line, given the actual determinations by the jury as reflected in the verdict and interrogatory responses.   In the equitable phase of the trial, plaintiff did not provide a sufficient basis for the court to reconsider or depart from the jury's findings in this regard.⁹

Having concluded that there is no basis for ordering the disconnection of the Brushy Hill extension from the Westmere sewer line, the court need not discuss, at length, the evidence relating to whether and how such a disconnection could be accomplished.   The fact that plaintiff provided testimony from an expert indicating that it technically was feasible to disconnect the Brushy Hill extension and bypass the Westmere sewer line by construction of a new sewer line connecting to the town's sewer system (essentially parallel to the Westmere line), carries limited weight in determining whether such a remedy would be appropriate.   In terms of logical analysis, technical feasibility is a necessary, but not sufficient, condition.   The economic waste, risk of environmental impact, etc., are negative factors that plaintiff's proposal would have generated without any legally cognizable rationale—even if the risks and costs were not huge, plaintiff's unilateral “change of mind” as to what to do with the subject property does not and cannot justify imposition of any such nontrivial risks and costs upon the town and the public at large.

Having been asked to do equity, the court cannot ignore the extent to which plaintiff bears at least some of the responsibility for its current claimed predicament.   By admission of plaintiff's principal, the company has been essentially dormant for many years (other than operation of the sewer line).   The admitted dormancy is consistent with the absence of any evidence of any efforts by plaintiff to build homes on the remaining lots, sell the remaining lots individually, or sell the remaining area of the subdivision in a bulk transaction to another developer.   In terms of the contract, there was no evidence of any efforts by plaintiff, over the last several years, to attempt to bring about the final contractually-contemplated act of a transfer of the sewer system to the town one year after the final lateral connection is made.

In seeking an equitable order that the town be required to disconnect despite the jury verdict, an alternate viewpoint is that plaintiff effectively is seeking to abrogate or even eliminate the contractual right of the town to connect the Brushy Hill extension to the Westmere sewer line.   Plaintiff has not articulated a basis for reformation of the contract/agreement, and has provided no reason why the court should not honor the maxim that equity follows the law.   Indeed, plaintiff has not asked the court to reform the contract, and it would be wholly inappropriate for the court to do so in the absence of such a request and the correlative notice to the town that such was being sought and/or considered.  (Whether the town should be compelled to pay something towards the continued operation of the sewer line, on an equitable basis, is a separate question.)

Damages for Ccontinuing) Unjust Enrichment

As set forth in the court's memoranda addressing the various post-verdict motions filed by the parties, the court believes that the jury's verdict for unjust enrichment was high, possibly excessive, but not so high as to shock the conscience of the court—the threshold for setting aside the verdict and/or ordering remittitur.   Having heard all the evidence that the jury heard, as well as additional evidence, the court believes that it has a better sense of where the equities lie, going forward.

As articulated in the earlier memoranda, the court is satisfied that the jury probably if not almost certainly awarded plaintiff all out-of-pocket operational costs being claimed plus half of the personnel cost that had been claimed by plaintiff.   If that is, in fact, the way the jury did its calculation, the jury probably failed to give adequate consideration to the obligation of plaintiff to operate and maintain the sewer line for at least one year after completion—more accurately one year after the connection of the final lateral to the Westmere sewer line.  (As noted earlier in this memorandum as well as in prior decisions, the court recognized that there was evidence from which the jury could have concluded that there was a period in excess of a year between completion of the Westmere line and the date on which plaintiff started to claim that it was entitled to reimbursement for operational expenses, and on that basis, the court declined to treat the jury's decision as clearly erroneous.)   It clearly was within the contemplation of the parties that there would be a period of at least one year in which plaintiff would be responsible, with the maximum period of time to be determined by how long it took to complete the development of the subdivision.   The reality is that virtually nothing has happened with respect to development of the subdivision since approximately 2005–06, and by plaintiff's own admission, the business has been essentially dormant since approximately 2008 except for the necessary continued operation of the Westmere sewer line.¹⁰

From the outset, one of the goals of plaintiff has been the disconnection of the Brushy Hill extension from the Westmere sewer line.   The court does not know the motivation for that request at the outset, but during the post-verdict evidentiary presentation, plaintiff's principals indicated that the current thought was in the direction of not developing/selling the four lots for individual homes but instead developing the remaining property for more intensive multi-residential use.   There was no evidence that the latest proposal had ever been reduced to writing much less submitted in a formal sense to any of the town's administrative bodies that might be required to approve such a development.   As previously noted, plaintiff has not sought to have the agreement with the town modified via reformation, and there was no evidence of any effort to negotiate a change in the terms of the developer's agreement.   (The court's recollection is that when the possibility of a multi-residential development on the remaining four lots first was mentioned in court, the town indicated that that was the first it had heard of such a concept.)

During the post-verdict evidentiary proceedings, town officials stated that they were willing to take over operation or ownership of the Westmere sewer line, whichever plaintiff might prefer, subject of course to the need for obtaining formal approvals from the sewer commission and possibly other officials/bodies.

Plaintiff apparently is/was not interested in a resolution along such lines—in the original complaint, plaintiff had sought to assert a cause of action based on inverse condemnation, and seven years later, during closing argument, plaintiff still was saying that the town should be utilizing eminent domain to acquire the property.   In other words, notwithstanding the generally-articulated financial burden of continued operation, plaintiff does not wish to be simply rid of that burden.   To the contrary, defendant is now claiming that the sewer line would allow it to engage in alternate development scenarios for which continued operation and ownership of the sewer line might actually be a benefit.¹¹

Implicit in the jury's determination that plaintiff was entitled to an award for unjust enrichment in connection with operation and maintenance of the sewer line is a determination that at some point, the continued operation was beyond the contemplation of the parties under the contract.   The jury however was not aware of the full extent of plaintiff's lack of effort to satisfy the condition precedent for the transfer of the sewer line to the town, as well as the more recent shift in goals, coupled with the stated position that plaintiff wishes to continue operating at least the core portion of the Westmere sewer line.   Conversely, as the court has indicated in prior memoranda, it believes that the jury's award for unjust enrichment was high, approaching if not crossing into excessive (but not shockingly so).   Given the totality of these factors, the court believes that the town is required to pay, on an ongoing basis, for the continued costs of the Westmere sewer line operations, but only such costs that are specifically attributable to the Brushy Hill extension.

Trying to synthesize all of these factors, and assuming the court were to credit the claim that plaintiff seeks an alternate development (information not available to the jury), any unjust enrichment award would have to be drastically reduced from the level awarded by the jury based on information presented to the court.   In effect, plaintiff is saying that the only unjust quality about the contractual obligation to continue to operate the sewer line relates to the Brushy Hill extension that is connected to the Westmere line, and not the “core” Westmere line operation itself.   Any unjust enrichment award, then, would have to be based on the marginal (incremental) cost of operation attributable to the Brushy Hill extension.

No effort was made by either party to identify the incremental cost of operation of the Westmere sewer line attributable to the Brushy Hill extension—certainly, no credible evidence was offered.   The court notes that some of the items claimed by plaintiff in Pl.Ex. 102 inherently are independent of the extent of usage—costs without any material correlation to extent of usage and therefore are baseline costs for operation of the Westmere sewer line.   In this category are such items as maintenance of the exterior of the property, telephone service (for emergency communications), and periodic inspections to make sure everything is functioning properly.   One item that clearly has a relationship to usage, at least partially, is electricity, to the extent that operation of pumps is based on the amount of sewage going through the system.  (Operation of monitoring equipment, on the other hand, would seem to be electrical consumption that is independent of usage.)   Although not free from doubt, water and gas usage would also seem to be in the category of expenses that are at least partially load-related.

Even as to costs that have increments attributable to the Brushy Hill extension, allocation of those costs is not simple.   No evidence was offered as to a proper basis for allocation.   A further complicating factor is that for some services, there may be a baseline or minimum cost for service, regardless of usage, with additional usage at a specified rate (or a variable rate, e.g. time-of-day metering or tiered usage charges, often used for electrical consumption).   Under such a paradigm, only usage that exceeded the minimum level of charges would be susceptible to allocation, and even then, the applicable rate may not be constant.

Recognizing that there are more homes connected to the Brushy Hill extension than are directly connected to the Westmere line, but also recognizing that the marginal costs based on usage are different than total costs (many costs are independent of or only partially dependent on the degree of usage of the sewer line), and subject to plaintiff's right to demonstrate that the actual marginal cost for operation of the Westmere sewer line attributable to the Brushy Hill extension is more—the court has determined that a 50% ”presumptive” marginal cost for gas, electric, and water is appropriate.¹²

The jury did not find there to have been a breach of contract or unjust enrichment with respect to the construction phase of the dispute.   Nonetheless, the court feels compelled, as a court of equity, to discuss the disparity between the $38,000 figure calculated by the town (which was then included in the cost of the Brushy Hill extension for purposes of determining the assessment for those property owners which then led to the rejected tender of the check for $38,000 for the Brushy Hill extension connection), and the $60,000 figure found by the jury to be the proper benefit assessment for abutting property owners.   Although the court has discussed elsewhere why that disparity is not a necessarily fatal conflict in the jury's determination of issues, there is a subtlety in play that either the jury chose to disregard or escaped the jury's attention (and may have been missed by the parties as well).

The court's recollection is that there was testimony—Ms.   Young and possibly also Mr. Steeger—that the $38,000 figure was the result of an attempt to determine the benefit to a particular property located on Andrews Drive (# 25).   In turn, the court's recollection is that there was testimony that that property had been selected because it was the lowest-assessed-value property directly connected to the Westmere line (and the court has accepted all of that testimony as true).   This apparently is/was in line with the usual practice of the town with respect to selection of a property to use as the benchmark for “actual” benefit to properties improved by construction of a sanitary sewer line.   Use of this methodology makes sense, from a municipal point of view, when dealing with property owners directly, to the extent that that process tends to keep the benefit at a more modest level than if a higher-value property were to be used for that purpose.   The strategy presumably results in fewer and/or less-irate taxpayers (voters!).   In most situations, the relationship is strictly between the town and benefited property owners such that the likelihood that the procedure keeps benefit assessments artificially low is not something likely to generate any complaints (probably the reason for use of the procedure).   However, in this case, any procedure that tended to depress benefit levels would be to the detriment of plaintiff, since plaintiff's ability to recover its costs is capped by the lesser of pro rata cost and actual benefit.   The court does not know whether an alternate (more realistic?) procedure would have resulted in a benefit calculation of $60,000, i.e. the figure given by Mr. Kerin and adopted by the jury as the per-home benefit,¹³ but the court feels that as a matter of equity, some recognition to the distortion of the outcome is appropriate if not required, as the procedure used here most likely impacted the valuation process for the connection of the Brushy Hill extension.¹⁴  (Again, at the risk of being unduly repetitious but wording it in an alternate manner, the court was given no basis to assume that the benefit arising from connection of a home to a sewer line is necessarily exactly the same as the benefit arising from the connection of an extension to that same sewer line.)

In sum, then, the court sees no basis for ordering or allowing disconnection of the Brushy Hill extension.   The developer's agreement contemplated such a connection, and to the extent that plaintiff has tried to claim that its permission was needed before the town could connect (before the transfer of ownership to the town), the jury's refusal to find a breach of contract by the town necessarily included (by implication) a rejection of that contention.   To the extent that the court can or should undertake an independent evaluation of contract terms, the court concurs in that reading of the developer's agreement—that defendant was authorized to connect extensions such as the Brushy Hill extension to the Westmere sewer line and not only after transfer of ownership.

Conclusion/orders

Plaintiff's right to equitable relief

The court hereby denies plaintiff's request for an injunction allowing it to disconnect the Brushy Hill extension from the Westmere sewer line.

Defendant is ordered to pay plaintiff $60,000 based on the contextually-inequitable procedure used in determining the $38,000 value increment, as was used to determine the benefit assessment for the connection of the Brushy Hill extension to the Westmere sewer line.

Until such time as plaintiff either grants permission to defendant to operate the Westmere sewer line (and defendant accepts the responsibility) or transfers ownership of the Westmere sewer line to defendant, defendant is required to reimburse plaintiff for 50% of the electric, gas, and water charges incurred by plaintiff in connection with operation of the Westmere line (unless plaintiff can demonstrate that its actual marginal cost for any or all such utilities attributable to the Brushy Hill extension is greater than 50% in which event such greater amount will be payable).

Defendant's right to equitable relief

The court hereby grants defendant's request for an injunction requiring plaintiff to continue to maintain and operate the Westmere sewer line, until such time as plaintiff either authorizes defendant town to operate and maintain the Westmere sewer line (subject to defendant's acceptance of such responsibility) or, in compliance with applicable town ordinances, town regulations and state statutes (either pursuant to the developer's agreement or voluntarily), transfers ownership of the sewer line to the town (including all equipment installed as part of the project and an easement as specified in town regulations).

Nothing herein is intended to limit, in any way, plaintiff's right to submit for town approval any modification of its plans for development of the remaining parcels in the subdivision, nor is anything intended to limit, in any way, defendant's right to review any such proposal for development in accordance with applicable standards.

Judgment is hereby ordered in accordance with the foregoing.

POVODATOR, J.

FOOTNOTES

FN1. Although the parties sometimes/often referred to the sewer line by a different designation referencing its location on Andrews Drive, the court believes that it is clearer and simpler to refer to the sewer project in this manner..  FN1. Although the parties sometimes/often referred to the sewer line by a different designation referencing its location on Andrews Drive, the court believes that it is clearer and simpler to refer to the sewer project in this manner.

FN2. The jury also responded to a series of interrogatories that had been submitted along with the verdict forms..  FN2. The jury also responded to a series of interrogatories that had been submitted along with the verdict forms.

FN3. Plaintiff recently filed an appeal relating to the outcome of the jury-phase proceedings..  FN3. Plaintiff recently filed an appeal relating to the outcome of the jury-phase proceedings.

FN4. The court has attempted to “extract” most of the essential facts for recitation in this format.   This is not intended to be a necessarily-exhaustive recitation of facts as other facts found are included and/or implied in the discussion portion of this memorandum..  FN4. The court has attempted to “extract” most of the essential facts for recitation in this format.   This is not intended to be a necessarily-exhaustive recitation of facts as other facts found are included and/or implied in the discussion portion of this memorandum.

FN5. The court's recollection is that there was a paucity of evidence relating to specific dates for various benchmark events.   There was no direct evidence, recalled by the court, to the date when the Westmere line actually was put into service (or was formally approved for service by the town).The existence of deeds for properties in the subdivision, dated December of 2004 (Def.Exs.) (XX and YY), imply that the sewer line was usable on or before that date.   Paragraph 9 of defendant's counterclaim (# 155.00) asserts that the construction was completed in August of 2004 but plaintiff's response to that paragraph (in # 156.00) was a denial—presumably focusing on other allegations in that paragraph but precluding treatment of that date as a proven or admitted “fact.”Mr. Kerin testified that his benefit assessment calculation/opinion was as of July 1, 2005, because the sewer system was available as of that date.   (Ms. Young, another appraiser, also used July 2005 as her valuation date.)   The gap between 2004 and July 1, 2005 may be attributable to inaccuracies in the testimony, or may be partially if not totally a consequence of the need for inspections, or that date may have been the approximate date of the first connection of a lateral putting the system into actual use, or convenience, or otherwise.The court does not recall plaintiff challenging the July 1, 2005 date as appropriate and therefore is using it as the generally-applicable benchmark date.  (For appropriate purposes, the court has recognized late 2004 as a supportable date, e.g. in determining whether the jury could have taken into account the minimum one-year period of operation required under the developer's agreement, the court recognized that the period from late 2004 until early 2006 (the starting point for plaintiff's claims for reimbursement of operating expenses) was more than a year.).  FN5. The court's recollection is that there was a paucity of evidence relating to specific dates for various benchmark events.   There was no direct evidence, recalled by the court, to the date when the Westmere line actually was put into service (or was formally approved for service by the town).The existence of deeds for properties in the subdivision, dated December of 2004 (Def.Exs.) (XX and YY), imply that the sewer line was usable on or before that date.   Paragraph 9 of defendant's counterclaim (# 155.00) asserts that the construction was completed in August of 2004 but plaintiff's response to that paragraph (in # 156.00) was a denial—presumably focusing on other allegations in that paragraph but precluding treatment of that date as a proven or admitted “fact.”Mr. Kerin testified that his benefit assessment calculation/opinion was as of July 1, 2005, because the sewer system was available as of that date.   (Ms. Young, another appraiser, also used July 2005 as her valuation date.)   The gap between 2004 and July 1, 2005 may be attributable to inaccuracies in the testimony, or may be partially if not totally a consequence of the need for inspections, or that date may have been the approximate date of the first connection of a lateral putting the system into actual use, or convenience, or otherwise.The court does not recall plaintiff challenging the July 1, 2005 date as appropriate and therefore is using it as the generally-applicable benchmark date.  (For appropriate purposes, the court has recognized late 2004 as a supportable date, e.g. in determining whether the jury could have taken into account the minimum one-year period of operation required under the developer's agreement, the court recognized that the period from late 2004 until early 2006 (the starting point for plaintiff's claims for reimbursement of operating expenses) was more than a year.)

FN6. “9–10.5 Upon completion of construction, the maintenance bond required by section 7–1.1 of these regulations shall be filed by the permittee together with the certificate required by section 7–1.2 and with an “as-built” plan of the installation.   If the installation has been made in a private road, the permittee shall deed the sanitary sewer to the town together with a 20–foot–wide easement upon completion of construction.”.  FN6. “9–10.5 Upon completion of construction, the maintenance bond required by section 7–1.1 of these regulations shall be filed by the permittee together with the certificate required by section 7–1.2 and with an “as-built” plan of the installation.   If the installation has been made in a private road, the permittee shall deed the sanitary sewer to the town together with a 20–foot–wide easement upon completion of construction.”

FN7. Although plaintiff did not explicitly seek this form of equitable relief, it did seek similar relief during the jury phase and in particular, in its post-verdict motion when it asked the court to add $60,000 to the amount awarded by the jury (# 211.00).   As stated in ruling on that motion, the court believes that the jury reasonably could have declined to award such legal relief, but believes, as discussed herein, that as a matter of equity such an amount should be awarded but on a different basis..  FN7. Although plaintiff did not explicitly seek this form of equitable relief, it did seek similar relief during the jury phase and in particular, in its post-verdict motion when it asked the court to add $60,000 to the amount awarded by the jury (# 211.00).   As stated in ruling on that motion, the court believes that the jury reasonably could have declined to award such legal relief, but believes, as discussed herein, that as a matter of equity such an amount should be awarded but on a different basis.

FN8. “Unbeknownst to Westmere, and in contravention to the express terms of the agreement, the Town connected to and began to use the sanitary sewer in the Summer of 2006, without compensation to Westmere, the owner thereof.”.  FN8. “Unbeknownst to Westmere, and in contravention to the express terms of the agreement, the Town connected to and began to use the sanitary sewer in the Summer of 2006, without compensation to Westmere, the owner thereof.”

FN9. To the extent that plaintiff's position is that the contract impliedly required permission from plaintiff before the town could connect the Brushy Hill extension, prior to transfer of ownership—there would be no need for any contractual reference to connection of other sewer extensions after ownership were transferred, as once ownership were transferred, the Westmere line would simply be part of the town sewer system.   At that point, the town could make whatever additional connections it needed/wanted, in accordance with applicable ordinances and regulations.   Reference to connection of extensions, then, could only be intended to be applicable prior to transfer of ownership, and there is nothing in the agreement between the parties suggesting permission or any other condition precedent to the right to connect..  FN9. To the extent that plaintiff's position is that the contract impliedly required permission from plaintiff before the town could connect the Brushy Hill extension, prior to transfer of ownership—there would be no need for any contractual reference to connection of other sewer extensions after ownership were transferred, as once ownership were transferred, the Westmere line would simply be part of the town sewer system.   At that point, the town could make whatever additional connections it needed/wanted, in accordance with applicable ordinances and regulations.   Reference to connection of extensions, then, could only be intended to be applicable prior to transfer of ownership, and there is nothing in the agreement between the parties suggesting permission or any other condition precedent to the right to connect.

FN10. In its earlier memoranda, the court implied that it was possible that the jury had considered the more-than-one-year period from the end of 2004 into 2006 as the period in which it was reasonable for plaintiff to be obligated to operate and maintain the Westmere sewer line.   The award of damages for unjust enrichment, starting in 2006 could have reflected the jury's perception of unfairness arising from plaintiff's contractual obligations to operate and maintain a sewer line primarily serving people outside its subdivision and indeed, primarily serving people on the Brushy Hill extension..  FN10. In its earlier memoranda, the court implied that it was possible that the jury had considered the more-than-one-year period from the end of 2004 into 2006 as the period in which it was reasonable for plaintiff to be obligated to operate and maintain the Westmere sewer line.   The award of damages for unjust enrichment, starting in 2006 could have reflected the jury's perception of unfairness arising from plaintiff's contractual obligations to operate and maintain a sewer line primarily serving people outside its subdivision and indeed, primarily serving people on the Brushy Hill extension.

FN11. Plaintiff claimed that the Westmere sewer line was a burden in so far as it was obligated to handle sewage flowing from the Brushy Hill extension, but that if the Brushy Hill extension were to be disconnected, the Westmere sewer line would be a benefit.   The court does not see how operation of the Westmere sewer line, even if the Brushy Hill extension were to be disconnected, can be characterized as a benefit.   Operation of the Westmere sewer line would still be a burden in terms of operational costs, and the ability to utilize the Westmere sewer line for more intensive development of the subdivision property would not be likely to be affected by private ownership so much as by the increased capacity it could handle if the Brushy Hill extension were to be out of the picture.   Availability, not ownership, is what might be relevant.   That, however, is beyond the scope of these proceedings..  FN11. Plaintiff claimed that the Westmere sewer line was a burden in so far as it was obligated to handle sewage flowing from the Brushy Hill extension, but that if the Brushy Hill extension were to be disconnected, the Westmere sewer line would be a benefit.   The court does not see how operation of the Westmere sewer line, even if the Brushy Hill extension were to be disconnected, can be characterized as a benefit.   Operation of the Westmere sewer line would still be a burden in terms of operational costs, and the ability to utilize the Westmere sewer line for more intensive development of the subdivision property would not be likely to be affected by private ownership so much as by the increased capacity it could handle if the Brushy Hill extension were to be out of the picture.   Availability, not ownership, is what might be relevant.   That, however, is beyond the scope of these proceedings.

FN12. To avoid any misunderstanding, the court will provide an example.   If a utility has a $10 monthly minimum charge and there is $20 of actual usage charges, the presumptive allocation attributable to the Brushy Hill extension is $15.   If plaintiff can establish that more than $10 of the $20 usage is attributable to the Brushy Hill extension, then that increment would also be chargeable to the town.   Any minimum or baseline charge is not reflective of usage, and therefore would not enter into any determination of usage actually attributable to the Brushy Hill extension as opposed to usage attributable to other properties connected to the Westmere line..  FN12. To avoid any misunderstanding, the court will provide an example.   If a utility has a $10 monthly minimum charge and there is $20 of actual usage charges, the presumptive allocation attributable to the Brushy Hill extension is $15.   If plaintiff can establish that more than $10 of the $20 usage is attributable to the Brushy Hill extension, then that increment would also be chargeable to the town.   Any minimum or baseline charge is not reflective of usage, and therefore would not enter into any determination of usage actually attributable to the Brushy Hill extension as opposed to usage attributable to other properties connected to the Westmere line.

FN13. The jury did not find the disparity to constitute a breach of contract or basis for unjust enrichment..  FN13. The jury did not find the disparity to constitute a breach of contract or basis for unjust enrichment.

FN14. In its post-verdict motion, plaintiff suggests that if the court did not order the verdict modified to give it the $60,000 assessment for the Brushy Hill extension, it would have to sue the town for that purpose.   As discussed in the court's earlier memoranda, from a legal perspective the discrepancy is not one that requires attention by the court.   With respect to the concern about the need for future litigation, this litigation likely would constitute res judicata and/or collateral estoppel precluding any further litigation of this issue on the merits.   That does not necessarily foreclose equitable consideration of the issue (in a separate phase of the same case), as is being undertaken here..  FN14. In its post-verdict motion, plaintiff suggests that if the court did not order the verdict modified to give it the $60,000 assessment for the Brushy Hill extension, it would have to sue the town for that purpose.   As discussed in the court's earlier memoranda, from a legal perspective the discrepancy is not one that requires attention by the court.   With respect to the concern about the need for future litigation, this litigation likely would constitute res judicata and/or collateral estoppel precluding any further litigation of this issue on the merits.   That does not necessarily foreclose equitable consideration of the issue (in a separate phase of the same case), as is being undertaken here.

Povodator, Kenneth B., J.