Lee County Electric Cooperative, Inc. v. City of Cape Coral

Citations: 159 So. 3d 126; 2014 Fla. App. LEXIS 8432; 2014 WL 2218972Docket: No. 2D10-3781

Court: District Court of Appeal of Florida; May 23, 2014; Florida; State Appellate Court

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The City of Cape Coral initiated a construction project to modify an intersection, requiring the relocation of electric lines owned by the Lee County Electric Cooperative (LCEC) from a public utility easement. Disagreement arose regarding who would bear the costs of this relocation, leading to a declaratory judgment action filed by the City. Both parties submitted cross-motions for summary judgment, which the circuit court ruled in favor of the City, citing the franchise agreement and section 337.403(1) of the Florida Statutes. 

The appellate review was conducted de novo, confirming the circuit court's ruling but with different reasoning. The public utility easement, established in the 1960s, allowed LCEC to install its lines prior to the incorporation of Cape Coral in 1970. A franchise agreement between the City and LCEC granted LCEC rights to operate utility services within the city in exchange for a percentage of its revenues. This agreement did not specify the responsibility for the costs of relocating equipment, and a relevant provision regarding excavation by LCEC was deemed inapplicable as LCEC did not excavate a street during the relocation.

LCEC argued that the circuit court's ruling was incorrect, particularly claiming a taking of its property rights related to the easement without just compensation, violating the Fifth Amendment and Florida Constitution. However, this case does not pertain to the physical destruction of property but rather to the alleged taking of rights associated with the easement.

The Supreme Court case New Orleans Gaslight Co. v. Drainage Commission of New Orleans (1905) addressed the conflict between a gas company's franchise rights and the city's police powers. The gas company, which had exclusive rights to provide gas service and lay pipes in public streets, contended that relocating its pipes due to a new drainage plan constituted a taking of property without compensation. The Court clarified that the franchise did not grant the company the right to a specific location for its pipes and emphasized that such privileges are subject to public regulation in the interest of health and safety. The Court ruled that the city's exercise of police power for public necessity did not amount to a taking of the gas company’s property. The ruling distinguished between public franchise agreements and private easements, noting that while franchises allow use of public property, private easements purchased from property owners could warrant compensation if disturbed. Subsequent cases reaffirmed these principles, emphasizing the distinction between public and private rights in similar contexts.

Public utilities must acquire real property, whether through purchase or eminent domain, before it can be taken by the state or local governmental entities. In this case, LCEC's utility lines were located within a public easement dedicated for utility purposes, which was managed by the local governing body—initially the Lee County board of county commissioners and subsequently the City of Cape Coral after its incorporation. LCEC argued that its prior use of the easement granted it a vested private property interest superior to the City's authority, but this was unsupported by legal authority. The public nature of the easement remained intact regardless of LCEC's use or the change in governing body. Consequently, LCEC’s operations were subject to the City's police power for public safety, and there was no indication that the City revoked LCEC's franchise rights. Thus, the claim of property being taken without compensation was rejected.

Under common law, utilities are responsible for the costs associated with relocating their facilities from public rights-of-way when requested by state or local authorities. This principle arises from the conditional nature of a utility's right to occupy public space, which can be altered for public convenience or safety. The legal framework emphasizes that contracts with the state are subject to regulations aimed at protecting public health and safety, and these common law principles apply unless a different agreement or statute dictates otherwise.

The franchise agreement in question did not specify who would bear the costs of relocating LCEC’s lines, but it included provisions ensuring minimal interference with public traffic and reasonable access to adjacent properties. This implied recognition of the City's obligation to prioritize public health and safety aligns with municipal police power to improve public streets. The agreement did not grant LCEC an unrestricted right to remain in a chosen easement nor did it stipulate that the City would cover relocation expenses if required. The common law principle that utilities must cover relocation costs for public purposes remains intact, as neither the agreement nor Florida statutes alter this rule. Specifically, § 337.403(1) mandates that utilities must relocate at their own expense if they unreasonably interfere with public roads, as confirmed by a 1997 Attorney General’s opinion, which stated that the statute applies to roads and adjacent rights-of-way owned by the governing body. Though this opinion is not binding, it clarifies that the definition of "road" encompasses various public travel ways. However, the applicability of this statute to the current situation remains uncertain, as the specific placement of utilities in public utility easements rather than public roads complicates the interpretation.

The statute in question pertains to utilities located "upon, under, over, or along" public roads. It is established that LCEC’s equipment was situated within a six-foot easement adjacent to a public road. The interpretation of the term "along" in the statute has not been previously addressed in case law, but the language of section 337.403 is clear in stating that LCEC's utility lines were located "along" the road and were obstructing the City's road expansion. Therefore, LCEC is mandated by the statute to bear the costs of relocating its lines to another public utility easement.

Even if section 337.403 were not applicable, LCEC would still be responsible for relocation costs under common law principles, which prioritize public rights and safety over utility franchise rights. Historical precedents from the Florida Supreme Court affirm that utilities must comply with public needs, as established in cases dating back to 1906 and referenced in later rulings.

The opinion also analyzes the case of Pinellas County v. General Telephone Co. of Florida, where the court ruled that a franchise agreement conferred property rights that could not be taken without compensation. However, ambiguities in that case regarding whether the utility sought compensation for the loss of its franchise or merely for the relocation costs limit its applicability to the current situation. The lack of detailed facts from that case prevents it from providing definitive guidance. Consequently, the circuit court's decision is upheld.

Kelly and Black, JJ., concurred on the legal interpretation of plat recording and easement acceptance. Section 177.10, when it was in effect, mandated that a plat could only be recorded with approval from local governing bodies but did not obligate them to maintain public parcels. This section was repealed in 1971 and replaced by section 177.081. A lack of formal acceptance from the local governing body could imply acceptance through public use, as established in Hughes v. Town of Mex. Beach. LCEC argued that a 1959 Attorney General's opinion limited the applicability of section 338.19 to utilities on public roads, but this opinion did not address the current case and misinterpreted the relevant statute. The 2012 amendment of section 337.403, which allows for potential government responsibility for relocation costs, supports the conclusion that LCEC is liable for such costs. Prior versions did not grant municipalities this authority. Additionally, in Qwest Corp. v. City of Chandler, the court dismissed a utility's claim that it should not bear moving costs for its infrastructure in public rights-of-way, labeling the reliance on General Telephone as misguided.