Commissioners of Public Works of the City of Laurens, South Carolina, also known as the Laurens Commission of Public Works, Respondent,
City of Fountain Inn, South Carolina, Petitioner Appellate Case No. 2018-001309
June 12, 2019
From Laurens County J. Cordell Maddox, Jr., Circuit Court
OF CERTIORARI TO THE COURT OF APPEALS
P. Spruill and Boyd B. Nicholson Jr., both of Haynsworth
Sinkler Boyd, PA, and David W. Holmes, of Holmes Law Firm,
all of Greenville, for Petitioner.
L. Widener, of Burr & Forman, LLP, of Columbia, and
Bernie W. Ellis, of Burr & Forman, LLP, of Greenville,
case concerns a municipality's statutory ability to
provide utility services beyond its corporate limits. Section
5-7-60 of the South Carolina Code (2004) authorizes a
municipality to provide specified services, such as
utilities, outside of its corporate limits "by
contract" except within a so-called "designated
service area for all such services of another municipality or
political subdivision." The dispositive issue here
centers on the meaning of the following provision in section
5-7-60: "For the purposes of this section designated
service area shall mean an area in which the particular
service is being provided or is budgeted or funds have been
applied for as certified by the governing body thereof."
For reasons explained below, we hold the requirement for
certification "by the governing body thereof"
applies in all of the enumerated circumstances for the
establishment of a designated service area.
years ago, an industrial park was built in an unincorporated
area in Laurens County between the City of Laurens (Laurens)
and the City of Fountain Inn (Fountain Inn). Both
municipalities provided natural gas service beyond their
respective borders, and each sought to serve the industrial
customers in the new industrial park. However,
Laurens-through its subsidiary, the Laurens Commission of
Public Works (LCPW)-claimed Fountain Inn could not compete
for the industrial customers' business because LCPW had
established a designated service area and therefore was the
sole authorized natural gas provider to the industrial park.
Fountain Inn believed the industrial park was not part of a
designated service area, and thus LCPW did not have an
exclusive right to provide natural gas to customers in the
support of its claim, LCPW asserted it had satisfied the
requirements of section 5-7-60 by providing natural gas in
the general vicinity for twenty years pursuant to a 1992
boundary line that was informally agreed to by Laurens and
Fountain Inn. Agreeing with LCPW that it had properly created
a designated service area, the circuit court enjoined
Fountain Inn from providing natural gas service to the
industrial park, and the court of appeals affirmed.
Comm'rs of Pub. Works of the City of Laurens v. City
of Fountain Inn, 423 S.C. 461, 815 S.E.2d 21 (Ct. App.
2018). Because there is no reasonable interpretation of
section 5-7-60 that would permit LCPW to claim a designated
service area over the industrial park, we reverse.
facts here are not in dispute. In 1992, officials from both
municipalities met to discuss establishing a boundary line in
the unincorporated area between the two cities for the
purpose of providing natural gas outside their respective
corporate limits. Following the meeting, LCPW's general
manager sent a letter to Fountain Inn's natural gas
system manager and enclosed a map (the 1992 Map)
memorializing the proposed boundary line. Fountain Inn's
system manager replied to the letter, expressing his
agreement as to the accuracy of the proposed boundary line
and stating the 1992 Map was "in agreement with the
Fountain Inn City Council." LCPW's general manager
then sent a second letter stating he was "in the process
of preparing a resolution for adoption by both of our
governing bodies." The boundary line was never formally
ratified by either municipality's city council or LCPW.
Since 1992, the parties generally treated the 1992 Map as a
gentlemen's agreement, although disputes did arise, which
the parties usually settled without resort to litigation.
the parties did not come to an informal resolution when the
current dispute involving Owings Industrial Park arose. LCPW
argues that the industrial park was constructed entirely on
its side of the 1992 Map's boundary line. ZF
Transmissions (ZF) was the first company to build in the
industrial park and, unaware of the informal boundary line,
solicited competing bids for its natural gas service from
LCPW and Fountain Inn.
the 1992 Map prohibited Fountain Inn from competing for
ZF's business (or the business of any other future
customer in the industrial park), LCPW filed a complaint, (1)
asserting claims for breach of contract and promissory
estoppel based on the 1992 Map; (2) seeking a declaratory
judgment that it had established a designated service area
pursuant to section 5-7-60; and (3) requesting an injunction
prohibiting Fountain Inn from providing natural gas service
in the designated service area, i.e., in any area past the
boundary line established by the 1992 Map. LCPW later
withdrew its breach of contract and promissory estoppel
claims, relying only on the claim that it had satisfied the
statutory requirements of a designated service area.
the bench trial, several witnesses testified LCPW generally
provided natural gas service to customers all throughout the
territory established by the boundary line on the 1992 Map.
However, the area in and around Owings Industrial Park was
unserved until the industrial park was completed because
there were no customers there. Ultimately, the circuit court
(1) found, pursuant to section 5-7-60, that LCPW had
established a designated service area defined by the boundary
line marked on the 1992 Map; ...