Craft v. District of Columbia Water & Sewer Authority

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 16-AA-529 01/18/2018
WILLIE T. CRAFT, PETITIONER,
V.
DISTRICT OF COLUMBIA WATER AND SEWER AUTHORITY, RESPONDENT.
Petition for Review of an Order
of D.C. Water and Sewer Authority
(0108321-1)
(Submitted November 30, 2017 Decided January 18, 2018)
Willie T. Craft, pro se.
Randy McRae submitted a brief as attorney for petitioner at the time the brief
was filed.
Emil Hirsch and Steven A. Pozefsky filed the brief for respondent.
Before GLICKMAN and THOMPSON, Associate Judges, and FERREN, Senior
Judge.
FERREN, Senior Judge: Appellant Willie T. Craft seeks a refund of more
than $77,000 from the DC Water & Sewer Authority (“DC Water”) based on a
billing dispute for the period January 1974 to January 2014. The dispute concerns
01/18/2018
two adjacent lots in the 4300 block of Nannie Helen Burroughs Avenue, Northeast
2
(the “Craft lot” and “McDonald‟s”), which share a private service line from the
water main. Because any application for a refund must be made within two years
after an erroneous payment (as the hearing officer properly ruled), 1 we may
consider Craft‟s claim only for the period beginning January 21, 2013, based on his
Claim for Refund of Overpayments dated January 21, 2015. We affirm.
I. Facts and Proceedings
The developer of the property covering both lots 2 installed one private,
underground water service line, which originated on the Craft lot and serves not
only the businesses there (a dry cleaner, flower shop, and daycare center), but also
the neighboring McDonald‟s franchise. On January 21, 2015, Craft filed his claim
for refund totaling somewhere between approximately $77,000 and several
1
D.C. Code § 34-2401.10 (2001). At no time has Craft argued that this
statute of limitations does not apply, or that if it ordinarily would apply, there was
some equitable exception that could eliminate its application in this case.
2
The developer was Golden Arch Realty, the “predecessor in interest” of
McDonald‟s Real Estate Company, which owns the lot on which the McDonald‟s
franchise at issue sits. McDonald’s USA, LLC v. Craft, 263 F. Supp. 3d 56(D.D.C. 2017).
3
hundred thousand dollars, based on alleged double-billing for McDonald‟s water.3
Craft alleged, more specifically, that all the water for both properties “ran first
through [his] meter,” and was charged to him, then “diverted to the McDonald‟s
property, where it was metered again” and charged to McDonald‟s. Craft thus
sought a refund of the dollars charged to him for McDonald‟s water.
On February 27, 2015, in a letter from Laura Preston, the utility‟s Customer
Service Director, DC Water denied the claim on the ground that the problem was
attributable to construction of a “shared water service line” for both properties.
The denial letter stated that, with the exception of a malfunctioning water meter
(not at issue here), DC Water‟s responsibility for maintaining infrastructure ends at
the property line. 4 It explained DC Water‟s legal position as follows:
In accordance with the Laws of the District of Columbia
each property owner is responsible to construct, provide
and maintain the plumbing and related appurtenances
3
A previous claim alleging a faulty meter for water usage from July 2014 to
October 2014, was dismissed because Craft did not appear at the hearing.
4
21 DCMR § 110.2 (“The Department [DC Water] shall maintain all water
service pipes from the street main to the property line”); id. § 110.4 (property
owner responsible for all maintenance on private property); id. § 300.1 (meters are
owned by DC Water).
4
within the private property boundary for their own use.
To our knowledge this has not been done. At present Mr.
Craft is responsible financially for all water use recorded
on the meter assigned to his account. In order for there
to be two separate accounts, two separate lines from our
water main, one to each property, are required. The
responsibility to resolve this condition is solely on the
owners of the commercial properties, Mr. Craft and
McDonald‟s, and not DC Water‟s. [Emphasis added.]
Craft petitioned for an administrative hearing, which was held on March 1,
2016.5 The petition alleged that from January 1974 to January 2014, Craft (and,
before him, his father) paid DC Water for the water serving both lots — Craft‟s
and McDonald‟s — and that Craft is therefore entitled to a refund totaling: (1) the
$77,237.046 paid by McDonald‟s to DC Water, with “appropriate deductions for
the retroactive credit [of $8,920.84] to [Craft‟s] account” paid by DC Water; 7 (2)
5
We omit references to pre-hearing procedural skirmishes not relevant to
our decision.
6
Craft alleges that this number is based on water bills that McDonald‟s paid
between November 2003 and January 2015 (which Craft alleges, without
corroboration, totaled $77,237.04). Through a process of extrapolation, Craft
claims that “it is reasonable to assume that the water bills generated by the
restaurant over the previous 29 to 30 years would amount to several Hundred
Thousand Dollars.” No bills, however, were presented at the hearing or otherwise
included in the record on appeal.
7
As elaborated below, despite its legal position that Craft was responsible
“for all water use recorded on the meter assigned to his account,” DC Water, as a
(continued . . .)
5
“an amount equal to all water bills paid by [McDonalds] from October 1974 to
October 2002”; (3) “appropriate interest on the refund amounts above”; and (4)
other relief deemed “just and appropriate.”
At the hearing before a DC Water hearing officer, Craft testified he had
learned from his father that, when the Craft family purchased its lot “from
McDonalds”8 forty years earlier, his father thought that McDonald‟s had “fixed”
the water meter to serve only the Craft lot. However, “for forty years” (apparently
without investigation), his father kept “scratching his head” at the “high water
bills.” Thus, when appellant Craft took over responsibility for the family property,
he contacted DC Water in October 2012 with an unjust enrichment theory: that the
Crafts were receiving bills not only for the water they used but also for the water
consumed by McDonald‟s on the next lot — a situation that DC Water, in April
2013, confirmed as true. To document this contention in his Claim for Refund,
Craft quoted from an email of June 25, 2014, from Laura Preston, DC Water‟s
Customer Service Director, to a member of the D.C. Council staff:
________________
(. . . continued)
“courtesy,” credited Craft with overpayments representing water that flowed to
McDonald‟s property.
8
Craft was referring, presumably, to the McDonald‟s Real Estate Company.
See supra note 2.
6
The way the current construction works, all of the water
[which] goes through the meter for both properties goes
through Mr. Craft‟s meter first inside his property
boundary, and then some of it is diverted and goes to Mr.
Mateos‟ restaurant, where it is metered again. We send
two bills — one to [Craft] and one to [McDonald‟s].
After using this excerpt to explain the current situation, Craft summarized
the history of his water bills, as described in the email:
Effective January 1, 2014, DC Water instituted a “special
arrangement” for the benefit of [Craft] and [McDonald‟s]
in which DC Water calculates their bills under the
following new formula: “. . . we take all of the water that
shows up in [McDonald‟s] meter and subtract it from
[Craft‟s] bill so that Mr. Craft is only billed for the net
amount that he and his neighbors. . . use.”
As for the issue of double billing, [Craft] was given a
“retroactive credit” in the amount of $8,920.84. This
figure was based on the amount of water billed to
McDonald‟s from March 2013 until January 2014. 9
9
DC Water‟s credit arrangement for Craft, beginning in January 2014 with
credit retroactive to March 2013, was developed not long after Craft contacted DC
Water in October 2012 about alleged overbilling. DC Water discovered defective
conditions in Craft‟s “meter vault,” which Craft did not have repaired until on or
about November 6, 2013, when a new water meter was installed — again
(apparently) for the water consumed on both lots. In the meantime, in order to
estimate water usage limited to Craft until the meter was repaired, DC Water based
the bills “on the number and types of business in Mr. Craft‟s side of the property.”
Thereafter, beginning in January 2014 with the new meter in place, the bills
reflected “actual meter readings,” less the amount billed to McDonald‟s.
7
Craft understood this email to reflect DC Water‟s acknowledgement that,
over time, he had been paying the water bill for both lots, in addition to
McDonald‟s payment for its own lot, resulting in double-billing for McDonald‟s
water. However, Craft does not dispute the “special” credit arrangement reflected
in Ms. Preston‟s email. Rather, he argues that the refunds to date have been too
meager. He therefore asks for a larger refund based on a new calculation: (1) total
all the water bills to McDonald‟s to be found in DC Water‟s records; (2) use
“yearly averages” to calculate McDonald‟s bills for earlier years, allowing for
“fluctuations in water prices”; and (3) total those two amounts, adding “appropriate
interest.”10
A review of the record reveals that, for a substantial period, DC water
essentially followed Craft‟s methodology in deducting McDonald‟s water usage
from Craft‟s bill. To facilitate a long-term solution between Craft and
McDonald‟s, DC Water provided Craft with a number of “courtesy” billing
accommodations. The hearing officer found that, beginning March 27, 2013 —
two months after the claim period permitted by the statute of limitations began 11 —
10
See text surrounding supra notes 6 & 7.
11
See supra note 1 and related text.
8
“DC Water stopped billing Craft based upon the water meter reading” for both lots.
Instead, it “start[ed] estimating [Craft‟s] water usage” and “bill[ing] McDonald‟s
separately for its water usage,”12 an arrangement that (as noted in the Laura Preston
email) yielded Craft an additional credit of $8,920.84 through January 29, 2014.
Thereafter, “DC Water provided an accounting adjustment [that] subtracted any
water billed to McDonald‟s from Mr. Craft‟s account as a courtesy.” The hearing
officer therefore agreed with DC Water‟s “characterization of how Mr. Craft‟s
water bills have been handled by DC Water from the point that he raised his
suspicion of double-billing.” She concluded that “[t]he facts and evidence do not
support Mr. Craft‟s allegation of double-billing.” In other words, DC Water had
cured the situation beginning March 27, 2013.
The idea underlying the courtesy adjustment was “to facilitate the property
owners coming up with an agreement for separating the water line between their
respective properties or devising an accounting arrangement between them.”
Although the record reflects an effort by Craft and McDonald‟s to negotiate such
an agreement whereby McDonald‟s would pay Craft “for the use of the water
12
See supra note 9 and related text.
9
line,” it does not appear that this has occurred. 13 As a result, in its February 27,
2015, letter responding to Craft‟s claim, DC Water stated that it planned to “cease
to do the courtesy accounting adjustment in May 2015” and urged Craft to work
toward resolving the matter “quickly.” According to a subsequent letter to Craft
dated January 27, 2016 (an unrebutted exhibit at the hearing), DC Water indicated
that in May 2015, it had extended the accounting adjustment through December
2015 and that it would do so, for the final time, at the end of “approximately 30
days,” around the end of January 2016.
In sum, for the two-year period for which the statute of limitations had not
run14 (January 21, 2013, to January 21, 2015), the hearing officer found that Craft
had received a courtesy adjustment from DC water for all but the first two months,
January 21 through March 27, 2013. Significantly, the hearing officer also found
that Craft had “provided no testimony or evidence to support an assertion that DC
Water‟s accommodation to him and to McDonald‟s resulted in undercharge or
overpayment [for] either property owner” after the end of March 2013. Craft has
13
There are recent indications that negotiations have not been successful, as
Craft has been enjoined from turning off the water to McDonald‟s lot. See supra
note 2. Moreover, Craft‟s counterclaims were dismissed for failure to state a
claim; see McDonald’s USA, LLC v. Craft, 238 F. Supp. 3d 1, 1-2 (D.D.C. 2017).
14
See supra note 1.
10
not challenged, let alone refuted, any of the facts and findings elaborated in this
first part of our decision.
II. Hearing Officer Decision
The record supports the foregoing findings of the hearing officer, and from
the discussion above, it is clear that the contested issues must be limited to Craft‟s
charges for water during the limitation period of January 21, 2013, through January
21, 2015. Craft raises three issues: (1) the hearing officer erred in failing to admit
in evidence the affidavit of Carlos Mateos, the “franchise owner” of McDonald‟s;
(2) the hearing officer‟s “ruling that Craft failed to carry his burden of proof . . . is
unfounded”; and (3) the hearing officer‟s ruling was “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with the law.”
A.
After acknowledging that the customer challenging a water bill has the
burden of persuasion, Craft argues in his brief that the hearing officer‟s refusal to
admit in evidence the affidavit of Carlos Mateos was an abuse of discretion
because that affidavit would have “assist[ed] in establishing the usage and billing
of water for McDonald‟s during the times herein discussed.” The hearing officer
11
observed, however, that the affidavit was unsigned, that Mateos was not present at
the hearing, and that the lack of verification was of “potential prejudice to DC
Water.”
In response, counsel for Craft represented that he “had a signed affidavit by
Mr. Mateos, but he was unable to locate the document” — a representation that did
not persuade the hearing officer. Even without regard to whether the affidavit was
inadmissible hearsay, we are satisfied that the hearing officer did not abuse her
discretion when refusing to admit a defective affidavit in evidence.
After the hearing, however, Craft sought reconsideration, this time
proffering the affidavit signed, dated, and notarized. The hearing officer was
unmoved. Acknowledging that some affidavits, although hearsay, can be
admissible in administrative proceedings, 15 she denied reconsideration because
Craft had “ample opportunity” during the hearing to introduce an “acceptable
affidavit by Mr. Mateos”; Craft failed to “request leave to submit an executed
15
See Compton v. District of Columbia Bd. of Psychology, 858 A.2d 470,
476 & n.8 (D.C. 2004) (“unless it is irrelevant, immaterial, or unduly repetitious,
hearsay is admissible in administrative proceedings” (citing D.C. Code § 2-509 (b)
(2001)).
12
version of the affidavit post-hearing,” before the record closed; and in any event,
“DC Water lacked opportunity to examine the statements, allegations and version
of events addressed in the document.” Again, we perceive no abuse of discretion.
The affidavit has seven short paragraphs averring that: (1) Matteos owns the
McDonald‟s franchise; (2) his restaurant borders the Craft lot; (3) the two
properties “share a common water line”; (4) his schedule does not permit his
appearance at the hearing; (5) based on Craft‟s concerns about “the amount of his
water bills and the operation of the water meters servicing the properties,” a
meeting was held at the McDonald‟s restaurant in May 2014, with eight persons
present: Craft and his advisor, Mateos and his representative, an aide to D.C.
Council member Alexander, and three DC Water representatives; and (6) he cannot
recall the names of the three DC Water representatives, although he proffered their
descriptions. Matteos then added a seventh paragraph: that (a) “as far back as they
could research, McDonald‟s had an active meter and was paying for the water
coming into the McDonald‟s property”; that (b) “DC Water could not distinguish”
the amounts of water used by the individual businesses on Craft‟s property; that (c)
until Craft “brought it to their attention,” DC Water was “billing Mr. Craft for the
water consumed” by McDonald‟s, and “also billing [Mateos] for the same water
use”; and that (d) upon learning of the situation from Craft, DC Water “began
13
looking at [McDonald‟s] meter reading and deducting the amount of [that] meter
reading from the total of Mr. Craft‟s water bill.”
The first six paragraphs of the affidavit add nothing of substance to Craft‟s
claim. Moreover, subsections (7)(a) and (7)(b) are easily dismissed, the first for
vagueness, the second for irrelevance. Subsections (7)(c) and (7)(d), however, are
more substantive. Taken together, these subsections essentially — though
cryptically — reflect the “special arrangement” and $8,920.84 credit reflected in
the Laura Preston email. Accordingly, because of this apparent consistency
between Craft‟s demand and DC Water‟s response — a response applicable to
virtually the entire limitation period for Craft‟s claim — the hearing officer‟s
decision to exclude the affidavit has not prejudiced Craft. Its evidentiary weight
would have been de minimis.
B.
Although the Mateos affidavit, in its last subsections, did not contradict DC
Water‟s evidence, Craft did not concede its entire case. Thus, we turn to Craft‟s
second contention: that the hearing officer erred in ruling that Craft had not
carried his burden of proof to justify a refund.
14
First, we have noted that the claim must be limited to the two-year period of
January 21, 2013, to January 21, 2015, not the forty years Craft proffered for a
refund.
Second, upon asking for a hearing to challenge DC Water‟s refusal to honor
his claim, Craft assumed responsibility to carry the burden of persuasion — “the
ultimate „burden of proof‟ by a „preponderance of the evidence.‟”16
Acknowledging explicitly that Craft had presented a prima facie case supporting
his claim, 17 the hearing officer found that DC Water had rebutted Craft‟s claim, to
the point that Craft then had the burden of producing evidence sufficient to refute
DC Water‟s evidence, in keeping with Craft‟s ultimate burden of persuasion, as
claimant.18 Craft failed to carry that burden. The record supports the hearing
officer‟s finding (noted earlier) that Craft has “provided no testimony or evidence
16
Gatewood v. D.C. Water & Sewer Authority, 82 A.3d 41, 51 (D.C. 2013).
17
See id. at 52 (D.C. 2013) (“To carry [the] burden of persuasion at the
hearing, . . . the customer must present a prima facie case showing that the
customer was not responsible for the contested water use. If the customer does so,
the burden of production shifts to the . . . utility . . . to respond with credible
evidence in rebuttal. If the utility does make a sufficient showing, the customer
must trump the utility‟s response with evidence sufficient to carry the burden of
persuasion, which remains always with the customer”).
18
See id.15
to support an assertion that DC Water‟s accommodation to him and to McDonald‟s
resulted in undercharge or overpayment [for] either property owner.” More
specifically, in addition to lack of persuasive rebuttal testimony, Craft produced no
water bills or other documentary evidence at the hearing (other than the defective
Mateos affidavit) to support his claim. Nor did he refute, in any way, the evidence
of credits granted by DC Water for Craft‟s overpayments, including the ongoing
accounting adjustment summarized in part I. above — a regime consistent with
subsections (7)(c) and (7)(d) of the Matteos affidavit that Craft proffered.
Third, DC Water acknowledged that its “courtesy adjustments” did not cover
the first two months of the two years that survived the statute of limitations,
namely, January 21 through March 27, 2013. On the other hand, we do not know
what Craft‟s claim for this period would have been. He produced no water bills or
other evidence that would substantiate any claim to a refund for those first two
months. Thus, the hearing examiner did not err in declining to find DC Water
liable for those months (among others). 19
19
We have previously noted, see supra note 9, that during DC Water‟s
investigation of Craft‟s first contact with the utility in October 2012, DC Water
discovered that, because of the deteriorating “condition of the plumbing” in Craft‟s
meter vault, Craft apparently had been receiving “estimated meter readings,”
(continued . . .)
16
Finally, we reaffirm the validity of DC Water‟s legal premise underlying its
response to Craft‟s claim, quoted at length above (in the first paragraph of part I.)
from Laura Preston‟s February 27, 2015, letter to Craft: aside from issues of meter
malfunction (irrelevant here), DC Water‟s responsibility for water line
infrastructure on a property ends at the property line. 20 The difficulties caused by a
single water line extending through the Craft and McDonald‟s lots are therefore the
responsibility of the owners themselves to correct. We agree with the hearing
officer:
The water meter is on Craft property and, as owner, Mr.
Craft was/is responsible for payment of water and sewer
services and charges[,] and if McDonald‟s is piggy
backing its water usage through Mr. Craft‟s water meter,
the dispute for payment of the bill is between the
________________
(. . . continued)
covering both lots, based on typical business usage. In fact, according to Laura
Preston‟s email of June 25, 2014, Craft had received estimated readings “almost
every month since at least 2008 until January 2014” because “the vault and valves
connecting the meter that serves both properties [were] in disrepair, and Mr. Craft
delayed repairing . . . the equipment for at least two years.” From this explanation,
it appears that the problem was disintegration of connections to the water meter
(Craft‟s responsibility), not malfunction of the meter itself (DC Water‟s
responsibility). See supra note 4. In any event, Craft has not claimed meter
malfunction as a cause contributing to the double-billing he alleges in this case.
His only concern about the water meter was reflected in his claim based on water
usage between July and October, 2014, which the court dismissed because of
Craft‟s failure to appear at the hearing. See supra note 3.
20
See supra note 4.
17
property owners. DC Water provides the service[,] and
the property owners must decide how to share the cost or
divide the line on their respective properties.
It follows, as DC Water has explained, that the equitable allocation of water bills
that DC Water made for the parties over almost a two-year period was indeed a
“courtesy,” terminable at will, “and not a duty.”
C.
Craft‟s third and last claim of error says only that the hearing officer‟s ruling
failed because, in the words of our standard of review, it was “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with the law.” 21 We have
found no abuse of discretion in the hearing officer‟s rulings; implicitly, therefore,
we have seen nothing arbitrary or capricious in those rulings; and, finally, Craft has
not explained in other ways why he believes that the hearing officer acted outside
the law. This contention, therefore, also fails.
21
D.C. Code § 2-510 (a)(3) (2001).
18
III. Conclusion
This case is resolved by four determinations of the hearing officer. First,
she limited the scope of Craft‟s claim to a two-year period beginning January 21,
2013, as required by the applicable statute of limitations. Second, she concluded
that, beginning March 27, 2013, DC Water properly allocated water bills to Craft
and McDonald‟s, respectively, through necessary estimates, metering, and courtesy
cost adjustments to the date of the claim, January 21, 2015, and thereafter through
January 2016. Third, she found no water bills or other evidence of record that
would justify DC Water‟s liability for a refund to Craft covering the two-months at
the beginning of the limitation period, January 21, 2013, through March 27, 2013,
for water entering the Craft and McDonald‟s lots through the single water line
serving both. Finally, as to the future, the hearing officer concluded, as a matter of
law, that until separate meters or an arrangement between Craft and McDonald‟s
could be accomplished, Craft was responsible for paying the water bill for the
single line extending through both the Craft and McDonald‟s lots, 22 and thus that
DC Water‟s willingness — for two months shy of two years — to allocate the
billing between the two parties had been a “courtesy,” not a legal obligation,
22
See supra note 4 and accompanying text.
19
subject to cancellation by DC Water without liability. The facts and the law
support these determinations.
*****
For the reasons set forth above, the hearing officer‟s decision is affirmed.
So ordered.