Washington Suburban Sanitary Commission v. Southern Management Corp.

Citations: 58 Md. App. 136; 472 A.2d 505; 1984 Md. App. LEXIS 307Docket: No. 1069

Court: Court of Special Appeals of Maryland; March 13, 1984; Maryland; State Appellate Court

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The case involves a dispute over water billing practices between the Washington Suburban Sanitary Commission (WSSC) and Southern Management Corporation, Inc. WSSC, established in 1918, is responsible for water supply in Montgomery and Prince George's Counties and is authorized to charge service rates based on water meter readings. In 1965, legislation allowed WSSC to use estimated billing for up to six months, requiring actual meter readings every six months to adjust final bills. 

Southern managed several apartment complexes and received water bills based on historical averages rather than actual consumption, despite investing over $150,000 to reduce water usage. Southern contested the estimated bills, deeming them excessive, and was threatened with service termination unless the bills were paid. Consequently, Southern paid $187,190.79 under protest and filed a lawsuit in the Circuit Court for Prince George's County, claiming WSSC breached its statutory duty to adjust estimated bills according to actual usage. Southern's motion for summary judgment was supported by communications from WSSC officials indicating that actual meter readings were unavailable due to operational issues with the meters.

On January 7, 1983, a hearing took place before Judge Albert T. Blackwell, Jr., concerning Southern's motion for summary judgment, asserting a lack of genuine factual dispute due to WSSC's admission of failing to provide actual meter readings for water consumption. WSSC contended that its estimates were accurate and that a factual dispute existed regarding Southern's claimed water usage. Judge Blackwell interpreted statute 6-104(b)(3) as entitling Southern to actual meter readings. He denied Southern’s initial motion but allowed for expert testimony on water consumption.

Depositions of WSSC employees Thornburg and Austin revealed that WSSC estimated bills when meters were non-operational or broken, as was the case with the Summit Hill meter during a relining project. Thornburg noted that accurate consumption could not be determined without a functioning meter, and Austin acknowledged his inability to ascertain actual water usage at specific locations. In a subsequent hearing on May 13, 1983, WSSC admitted it could not provide actual metered billing for Southern due to the lack of operational meters.

Judge Blackwell emphasized that 6-104(b)(3) mandates billing based on actual metered usage and that estimated bills could lead to unfair charges. He ultimately granted summary judgment in favor of Southern, concluding that WSSC's inability to provide accurate metering led to no genuine factual dispute. WSSC appealed, arguing that Judge Blackwell misinterpreted the statute and that it was ambiguous regarding billing methods for inoperable meters. The appeal court rejected these arguments and affirmed the lower court's decision.

Section 6-104(b)(3) of the statute allows the Washington Suburban Sanitary Commission (WSSC) to bill for water and sewer usage on an estimated basis for up to six months, provided that meters are read every six months and final bills are adjusted to reflect actual consumption. The language of the statute is clear, negating the need for statutory construction to ascertain legislative intent. The use of "shall" indicates a mandatory requirement, which is determined by the legislature's purpose and subject matter. Historically, since 1918, the General Assembly has mandated that WSSC can only charge for actual water consumed, with adjustments required for estimated bills. This provision aims to ensure fair and accurate billing, making compliance with the statute obligatory for WSSC. The legislature has designed this framework to ensure the WSSC maintains its equipment properly and bills accurately for water consumed. Similar legal precedents from other jurisdictions reinforce this interpretation, highlighting cases where courts ruled against estimated billing when actual consumption could not be demonstrated, thus affirming the requirement for accurate meter readings.

Testing revealed that a water meter malfunctioned over fourteen years, resulting in an estimated bill of $124,438.88 for the railroad to cover the deficiency. The railroad refused to pay, prompting the city to notify them of a potential property sale to settle the debt. The railroad sought an injunction to stop the sale, arguing the billing methods were inaccurate. The court denied the injunction but granted certiorari. On appeal, the railroad contended the bill was based on unreliable tests. The New Jersey Superior (then Supreme) Court nullified the bill, finding the city failed to provide adequate evidence to justify the charge, particularly regarding when the meter's malfunction began. The court ruled that assumptions about the meter's condition were arbitrary, and any computed results were speculative and inaccurate without consistent flow data since installation in 1908. Additionally, under Maryland law, the Washington Suburban Sanitary Commission (WSSC) could not collect the estimated amount billed without showing actual consumption, which it admitted it could not do. Therefore, Southern was entitled to summary judgment, with the WSSC ordered to pay costs. For consumers with legitimate billing disputes, the recommended procedure is to pay under protest and seek recovery.