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Sullins v. Central Ark. Water

Supreme Court of Arkansas

January 29, 2015


Page 728


Campbell Law Firm, by: H. Gregory Campbell, for appellants.

Amanda Mankin-Mitchell and Chastity Scifres, Pulaski County Attorney's Office, for appellees.


Page 729


This case is an appeal of the Pulaski County Circuit Court's grant of summary judgment in favor of appellees Central Arkansas Water, Buddy Villines, and Pulaski County against appellants, Bryan Sullins, Kerri Sullins and Charles Williams. Before the circuit court, appellants brought an illegal-exaction claim against appellees, arguing that Pulaski County and Central Arkansas Water had entered into an improper agreement and that as a result, Central Arkansas Water is improperly paying public funds to Pulaski County. We hold that the agreement is a proper exercise of authority under the law and affirm the circuit court.

Appellants Bryan Sullins, Kerri Sullins, and Charles Williams filed suit against appellees Pulaski County, Central Arkansas Water, and Buddy Villines in his capacity as Pulaski County Judge, claiming that appellees had entered into an agreement which necessitated Central Arkansas Water to expend public funds illegally. The facts underlying the illegal-exaction claim are as follows. Central Arkansas Water owns and operates Lake Maumelle as a public water supply. Lake Maumelle is located in Pulaski County. In 2007, Central Arkansas Water adopted a Watershed Management Plan, which recommended certain management options for the protection of the Lake Maumelle watershed. One of the management options the plan suggested was the implementation through the county governments of land-use controls for the watershed. Pulaski County supported the idea of subdivision regulations that would implement development controls for the areas of the watershed within Pulaski County.

In February 2009, Central Arkansas Water authorized the collection of a " watershed fee" imposed on wholesale customers, including appellants. In April 2009, Pulaski County and Central Arkansas Water entered into the Watershed Protection Agreement at issue in this case. The Central Arkansas Water Board of Directors approved the agreement and the Pulaski County Quorum Court enacted Ordinance 09-OR-26, which authorized the county judge to execute the agreement. At the same meeting, the quorum court adopted a Subdivision Ordinance, including Chapter 8, which provides special provisions applicable to the Pulaski County portion of the Lake Maumelle Watershed.

In the complaint, appellants alleged that they and other similarly situated taxpayers had paid the watershed fee imposed by Central Arkansas Water and that it constituted an illegal exaction because the Watershed Protection Agreement between Central Arkansas Water and Pulaski County was illegal. Specifically, appellants argued that the Watershed Protection Agreement was improper because it was a contract for the " joint exercise of

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governmental powers, privileges and authority" pursuant to the Interlocal Cooperation Act, codified at Arkansas Code Annotated section 25-20-104 (Repl. 2014), and because it failed to comply with the applicable statutory terms. In response, appellees contended that the agreement was proper under the Interlocal Agreement Act, codified at Arkansas Code Annotated section 14-14-910 (Repl. 2013) because it was an agreement for administrative services. The parties filed cross-motions for summary judgment, and the circuit court ruled that the agreement was a proper contract for administrative services. Accordingly, the circuit court entered summary judgment in favor of appellees, and appellants filed this appeal.

Summary judgment is appropriate when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Gentry v. Robinson, 2009 Ark. 634, 361 S.W.3d 788. On appeal, this court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. Id. This court views the evidence in the light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Lipsey v. Giles, 2014 Ark. 309, 439 S.W.3d 13. The burden is not on the moving party to demonstrate that every fact is undisputed, but to show that reasonable minds could not differ as to the conclusion to be drawn from them. Early v. Crockett, 2014 Ark. 278, 436 S.W.3d 141. Summary judgment is also appropriate when the circuit court finds that the allegations, taken as true, fail to state a cause of action. Cottrell v. Cottrell, 332 Ark. 352, 965 S.W.2d 129 (1998). When parties file cross-motions for summary judgment, as in this case, we determine on review whether the appellee was entitled to judgment as a matter of law. Rylwell, LLC v. Men Holdings 2, LLC, 2014 Ark. 522, 452 S.W.3d 96.

Illegal-exaction lawsuits in Arkansas are authorized under article 16, section 13, of the Arkansas Constitution, which provides, " Any citizen of any county, city, or town may institute suit in behalf of himself and all others interested, to protect the inhabitants thereof against the enforcement of any illegal exactions whatever." An illegal exaction is defined as any exaction that either is not authorized by law or is contrary to law. Brewer v. Carter, 365 Ark. 531, 231 S.W.3d 707 (2006). Two types of illegal-exaction cases can arise under article 16, section 13: " public funds" cases, where the plaintiff contends that public funds generated from tax dollars are being misapplied or illegally spent, and " illegal-tax" cases, where the plaintiff asserts that the tax itself is illegal. McGhee v. Ark. State Bd. of Collection Agencies, 360 Ark. 363, 201 S.W.3d 375 (2005). This court has stated that citizens have standing to bring a " public funds" case because they have a vested interest in ensuring that the tax money they have contributed to a state or local government treasury is lawfully spent. Ghegan & Ghegan, Inc. v. Weiss, 338 Ark. 9, 991 S.W.2d 536 (1999). Accordingly, " a misapplication by a public official of funds arising from taxation constitutes an exaction from the taxpayers and empowers any citizen to maintain a suit to prevent such misapplication of funds." Farrell v. Oliver, ...

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