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City of Bethel Heights v. Kendrick

Court of Appeals of Arkansas, Division II

February 8, 2017




          Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., by: Robert K. Rhoads and M. Scott Hall, for appellant.

          Watkins, Boyer, Gray & Curry, PLLC, by: Bill Watkins and Jennifer E. Gray, for appellees.

          N. MARK KLAPPENBACH, Judge

         The City of Bethel Heights appeals from the trial court's order granting summary judgment to appellees on its breach-of-contract claim. Bethel Heights argues that a contract existed between the parties and that appellees breached the contract. We affirm.

         Appellees, the Gregory A. Kendrick Revocable Living Trust and Shelly Kendrick, owned three tracts of land in Bethel Heights comprising approximately eighty-six acres. Bethel Heights is adjacent to Springdale. Appellees wanted their property to be annexed into Springdale and attempted to get the two cities to agree to this. In December 2014, appellees' attorney sent a letter to Bethel Heights providing a "formal statement and request for services pursuant to Act 779 of the 1999 legislative session, as revised and codified as A.C.A. 14-40-2001, et seq., " in the event that an agreement was not reached.[1] The service appellees sought from Bethel Heights was "municipal sewer service sufficient to provide not less than an eight (8) inch service main sufficient for industrial use to the property." The letter alleged that the "step sewer system" operated by Bethel Heights had no ability to provide the requested eight-inch service main.

In January 2015, Bethel Heights responded by letter, stating in part as follows:
I have been authorized to inform you that the City of Bethel Heights does hereby commit to provide services adequate to service the needs of your client. At the present time there is adjoining the property a forced main wastewater line that our engineers have determined will actually service more volume than the capacity of an eight inch (8") gravity flow service which your clients claim to need. The City will provide an eight inch connection to that line at the time needed by your client or will stub out such a connection within the 180 day time period within which substantial steps are required to be made by Act 779.
As the line is already located adjacent to the property and the line will handle the flow of an eight inch line, the service requested by your client is already available.
In your letter you referenced "industrial use" of the property. . . . The City respectfully requests that additional information be provided to the City in order that zoning and use issues may be considered and a determination made as to whether any proposed use of the property may even be acceptable under the zoning and development requirements of the City. Such a basic determination in the normal and customary course of development is vital to determining the services necessary not only with wastewater but also with water, electric, and gas and such information will surely be available in determining the required capacity and availability of those services.

         Appellees did not respond to Bethel Heights's request for additional information.

         In March 2015, Springdale passed an ordinance annexing appellees' property into the city, and in April 2015, Bethel Heights filed suit against Springdale and appellees. In its complaint, Bethel Heights sought a declaratory judgment declaring the ordinance void ab initio, sought to appeal the ordinance, and alleged breach of contract by appellees. Bethel Heights claimed that the two letters exchanged by the parties formed a contract and that appellees had breached the contract by failing to provide reasonably requested information to Bethel Heights and by having Springdale annex the property without notice to Bethel Heights. Bethel Heights requested that the court require specific performance of the contract or, alternatively, award damages for loss of tax revenue.

         Appellees and Springdale filed a joint motion to dismiss, and the trial court dismissed all of the claims except for the breach-of-contract claim against appellees. Appellees subsequently filed a motion for summary judgment asserting that the letters exchanged by the parties did not form a contract; that even if there was a contract, appellees did not breach the contract; and that it was impossible for them to perform any such contract now ...

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