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Tavern, LLC v. Town of Alpine

Supreme Court of Wyoming

May 16, 2017

THE TAVERN, LLC, and SALL, LLC, Appellants (Plaintiffs),
v.
THE TOWN OF ALPINE, WYOMING, and NELSON ENGINEERING, a Wyoming Corporation, Appellees (Defendants).

         Appeal from the District Court of Lincoln County The Honorable Marvin L. Tyler, Judge

          Representing Appellants: Gary L. Shockey, Attorney at Law, Jackson, Wyoming

          Representing Appellee The Town of Alpine: John D. Bowers, Bowers Law Firm, PC, Afton, Wyoming

          Representing Appellee Nelson Engineering: Lance E. Shurtleff, Esq., Hall & Evans, LLC, Laramie, Wyoming

          Before BURKE, C.J., and HILL, DAVIS, FOX, and KAUTZ, JJ.

          DAVIS, Justice.

         [¶1] Appellants The Tavern, LLC and SALL, LLC sued the town of Alpine, asserting several claims stemming from Alpine's financing and construction of a new sewage treatment facility. Appellants challenged the legality of the indebtedness Alpine incurred for the project, alleging that the loans exceeded the constitutional and statutory debt limitations imposed upon municipalities. They also asserted that Alpine was inappropriately attempting to coerce them to connect to the new waste facility and to abandon their functional septic systems.

         [¶2] A few years later, as the initial case inched on, Appellants filed another action against Alpine and Nelson Engineering. Appellants claimed that Alpine and Nelson committed the torts of abuse of process, civil extortion, and civil conspiracy by making false reports to the Wyoming Department of Environmental Quality that Appellants had violated the agency's rules and regulations when they upgraded their septic systems.

         [¶3] The actions were consolidated, and the parties filed various motions on the respective claims.[1] The district court granted Alpine's motion to dismiss all claims against the town. It also granted Nelson's motion for summary judgment on the claims against the engineering firm.

         [¶4] Appellants now present a number of issues on appeal. For the reasons set forth below, we reverse in part, affirm in part, and remand.

         ISSUES

         [¶5] Appellants present many issues, some of which overlap, but we discern the following questions to be distinct and dispositive:

1. Did the district court err in granting Alpine's motion to dismiss Appellants' claim for declaratory judgment when it determined they had no standing to seek a declaration that Alpine's loans for the new sewage[2] treatment facility exceeded the town's constitutional and statutory indebtedness limits?
2. Did the district court err in granting Alpine's motion to dismiss Appellants' claim for injunctive relief to stop Alpine from enforcing assessments and exactions for the new sewerage system on Appellants?
3. Did the district court err in granting Alpine's motion to dismiss Appellants' claim of inverse condemnation?
4. Did the district court err in granting Alpine's motion to dismiss Appellants' claims for abuse of process, civil extortion, and civil conspiracy because those claims are barred by the Wyoming Governmental Claims Act?
5. Did the district court err in granting Nelson's motion for summary judgment on Appellants' claim for abuse of process?
6. Did the district court err in granting Nelson's motion for summary judgment on Appellant's claim for civil conspiracy?

         FACTS

         [¶6] In 2005, Alpine commissioned Nelson Engineering to conduct a feasibility study to evaluate options to modify the town's existing sewer and water treatment plant, or in the alternative, to construct a new sewer treatment plant. After studying the situation, Nelson recommended that Alpine build a new sewer plant. Alpine adopted Nelson's recommendation and the "Alpine Wastewater Treatment Facilities Improvement Project" began.

         [¶7] Alpine passed resolutions authorizing application to the Wyoming State Loan and Investment Board for loans to be used as partial funding for the construction of the new sewage facility. The town then entered into loan agreements and executed promissory notes with the WSLIB. Alpine borrowed roughly $3, 843, 530 from the State of Wyoming at a 2.5% interest rate for a twenty-year term.

         [¶8] Appellants own and operate a recreational vehicle campground and tavern in Alpine. Their operations have not required hookups to Alpine's sewer system because their property has several septic tanks. The prospect of being required to hook up to the new sewage facility and therefore being obligated to pay associated sewer connection fees and usage rates led them to sue Alpine.

         [¶9] In their initial action, CV-2009-176, Appellants brought four claims. They sought a declaratory judgment that Alpine's indebtedness for the project was illegal because the loans exceeded the constitutional and statutory debt limitations imposed upon municipalities.[3] The second claim sought an injunction to prevent Alpine from compelling them to connect to the new waste facility and from forcing them to abandon their functional septic systems. The third claim requested a writ of mandamus and/or injunctive relief requiring Alpine to provide reasoning regarding its denial of a de-annexation petition Appellants had filed. In their fourth claim, Appellants asserted a taking of their property by inverse condemnation.

         [¶10] Sometime after the complaint in CV-2009-176 was filed, Alpine's attorney[4] sent an email to Appellants' attorney stating that if they continued with the lawsuit, the town would report them to the DEQ for alleged violations of the agency's rules and regulations for improvements to Appellants' septic system. Appellants continued with their case. A few weeks later, an engineer employed by Nelson, Leon Kjellgren, sent a letter alleging that their septic systems violated agency regulations to the DEQ. Mr. Kjellgren stated in his letter that he was acting on behalf of and representing Alpine.

         [¶11] Because of Mr. Kjellgren's letter, the DEQ issued an order requiring Appellants to obtain permits from that agency. Appellants argued, however, that Alpine had already inspected, approved, and issued permits for the improvements to their septic system. Appellants appealed the order to the Wyoming Environmental Quality Council, and while that appeal was pending, the parties reached an agreement that resulted in DEQ issuing a permit for the RV park system.

         [¶12] As a result of the episode with the DEQ, Appellants filed a second action, CV-2011-132, against Alpine and Nelson. In that complaint, Appellants asserted three claims: (1) abuse of process; (2) civil extortion; and (3) civil conspiracy. The initial case was stalled while Appellants worked everything out with DEQ, and so when Appellants filed their second action, the cases were consolidated.

         [¶13] The parties then filed various motions. Alpine moved to dismiss all the claims against it pursuant to W.R.C.P. 12(b)(6).[5] Nelson moved for summary judgment pursuant to W.R.C.P. 56 on all claims against them in CV-2011-132, in which Alpine joined. Appellants moved for partial summary judgment on the declaratory judgment claim against Alpine, asking the court to declare that the loans it had obtained for the project violated its constitutional and statutory debt limits. The district court provided the parties ample time to fully brief and supplement their arguments, and held a hearing on all motions. Following the hearing, the district court issued three decision letters on the respective motions.

         [¶14] The first was filed March 7, 2016 and titled "Decision Regarding Defendant Town of Alpine's Second Motion to Dismiss, " and it was later incorporated verbatim into the district court's "Order Granting In Part and Denying In Part The Town of Alpine's Second Motion to Dismiss." The court dismissed Appellants' claims in CV-2009-176 for failure to state a claim upon which relief can be granted. Specifically, it determined that they lacked standing to bring a declaratory judgment action challenging the indebtedness incurred for the sewer treatment project, and that therefore it did not have jurisdiction to act upon that claim. It also dismissed the second claim, which asked for injunctive relief, for failure to state a claim because the complaint did not demonstrate any irreparable harm. Regarding the third claim, the district court determined that as a matter of law the remedy of mandamus was not applicable because Alpine did not owe a clear duty to Appellants regarding their petition for de-annexation. The fourth claim, inverse condemnation, was dismissed because the complaint did not assert any facts that would entitle Appellants to such relief, and also because they did not comply with statutory requirements for inverse condemnation.

         [¶15] In the same decision letter/order, the district court also dealt with the claims against Alpine in CV-2011-132. It granted Alpine's motion to dismiss and dismissed the three claims asserted in that action. Specifically, it determined that the claims for abuse of process, civil extortion, and civil conspiracy were barred by the Wyoming Governmental Claims Act.

         [¶16] The second March 7, 2016 decision letter, which dealt with Nelson's motion for summary judgment, in which Alpine had joined, is titled "Decision Regarding Defendants' Motion for Summary Judgment (Re: Complaint in Civil No. CV-2001-132-DC), " and it was later incorporated verbatim into the "Order Granting Summary Judgment in Favor of Defendants in Civil Action No. CV-2011-132-DC." The district court concluded that there were no genuine issues of material fact concerning the claims of abuse of process, civil extortion, and civil conspiracy, and that therefore Nelson and Alpine both were entitled to judgment as a matter of law on that basis.

         [¶17] The third decision letter, also filed March 7, 2016, is titled "Decision Regarding Plaintiff's Motion For Partial Summary Judgment (Re: Complaint in Civil No. CV-2009-176-DC), " and it was later incorporated verbatim in "Order Denying Plaintiff's Motion For Partial Summary Judgment." Although the district court dismissed Appellants' claim for declaratory judgment for lack of standing, pursuant to Alpine's motion to dismiss, it also denied Appellants' motion for partial summary judgment on the same claim. It determined that Appellants failed to make the requisite prima facie showing that no genuine issues of material fact existed as to whether the system in question was a sewage or a water works system under the constitution and statutes. The previous ruling on standing would have been sufficient to dispose of the claims made in this motion - if Appellants had no standing, questions of fact became irrelevant.

         [¶18] The combination of the orders granting Alpine's and Nelson's respective motions effectively dismissed all of Appellants' claims. Appellants timely perfected this appeal.

         DISCUSSION

         [¶19] We will first address the district court's dismissal of Appellants' claims against Alpine for failing to state a claim upon which relief could be granted. We will then attend to the claims against Nelson, which the district court dismissed by summary judgment.

         Issues Relating to ...


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