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SUPREME COURT OF ALABAMA
OCTOBER TERM, 2010-2011
Water Works Board of the Town of Bear Creek
Town of Bear Creek
Appeal from Marion Circuit Court
The Water Works Board of the Town of Bear Creek ("the
Board") appeals from a summary judgment for the Town of Bear
Creek ("the Town") declaring the Board to be dissolved and its
assets vested in the Town.
incorporated on June 28, 1954, pursuant to Act No. 175, Ala.
Acts 1951, codified at Ala. Code 1975, § 11-50-310 et seq.
The objects of the Board were to "acquire, construct, operate,
improve and extend a water works plant ... and
system ... in the Town of Bear Creek."
Later, in 1970, the Upper Bear Creek Water, Sewer and
Fire Protection District ("the District") was incorporated,
pursuant to Ala. Code 1975, § 11-89-1 et seq.
The purpose of
the incorporation was to provide, among other things, water to
areas within the counties of Franklin, Marion, and Winston.
Still later, in 1975, the Board issued a Water Revenue
Bond, Series 1975,
the amount of $160,000, payable in
annual installments through 2015.
On March 20, 1981, the
Board issued an additional Water Revenue Bond, Series 1981, in
the amount of $141,000, payable in annual installments through
The Board paid all its outstanding bonded indebtedness
on the Series 1975 and the Series 1981 bonds in full on, or
about, November 26, 2004.
Subsequently, the Board issued no
Meanwhile, in 2002, the District entered into "waterpurchase
namely, the Board, the Water Works and Sewer Board of the Town
of Phil Campbell, and the Water Works and Sewer Board of the
City of Haleyville (hereinafter collectively referred to as
Concomitantly with the agreements, the
District issued its Water Revenue Bonds, Series 2002, in a
principal amount exceeding $7,000,000.
The water-purchase agreement between the Board and the
District provided, in pertinent part:
"The District and the [Board] are entering into
this Agreement ... in order to make provision for
the payment of debt service on the Series 2002 Bonds
and to make other revisions to the terms under which
the District sells water to the [Board].
District has represented to the [Board] that the
District will, contemporaneously with the execution
and delivery of this Agreement, enter into wholesale
water contracts with the other Purchasers providing
for the sale of water to such customers at rates
identical to those established in this Agreement.
"NOW THEREFORE, in consideration of the premises
and the mutual covenants herein contained, it is
hereby agreed as follows:
"Section 1. Supply of Water. The District agrees
to sell and supply to the [Board], and the [Board]
agrees to take and purchase from the District, such
quantity of water as the [Board] may require for
resale through the [Board's] System to customers of
the [Board], provided that the District shall not be
obligated to supply water to the [Board] in a
greater quantity than 1,252,200 gallons per month
(the 'Maximum Water Quantity').
The [Board] will
not purchase water from any other source unless its
requirements for water exceed the Maximum Water
Quantity, and at the time the [Board] shall be
purchasing from the District the Maximum Water
Quantity and the District shall have refused, after
six months' written notice, the [Board's] written
request for additional water above the Maximum Water
On November 19, 2009, the Town filed a complaint for a
declaratory judgment, seeking a determination that "title to
the Board [had] vested in the Town on or about November 26,
2004," pursuant to Ala. Code 1975, § 11-50-316(b), that is,
upon the retirement of the Board's Series 1975 and Series 1981
Section 11-50-316(b) provides, in pertinent part:
"When the principal of and the interest on all bonds
of such corporation payable from the revenues of any
system owned by such corporation shall have been
paid in full, then title to such system from the
revenue of which the bonds are payable shall
thereupon immediately vest in the municipality which
authorized the incorporation of such corporation,
and such system shall become the property of such
municipality, except as otherwise provided in
Section 11-50-320. When title to all property owned
by any corporation organized or the certificate of
incorporation of which is amended under this article
shall have vested in the appropriate municipality
which shall be entitled thereto under this section
..., then such corporation shall thereupon stand
dissolved; provided, that, if at any time any such
corporation does not have any bonds outstanding
(regardless of whether it has ever issued any
resolution, which shall be duly entered on its
minutes, declaring that such corporation shall be
dissolved; and, upon the filing for record of a
certified copy of such resolution in the office of
the judge of probate of the county wherein the
certificate of incorporation of such corporation was
filed, such corporation shall stand dissolved,
whereupon title to any property and assets then
owned by such corporation shall, except as otherwise
municipality which authorized the incorporation of
On August 11, 2010, the trial court entered a judgment
containing the following conclusions of law:
That pursuant to [§ 11-50-316(b)], all assets
of the [Board], including distribution lines,
water tanks, rights of way, equipment, bank
accounts, water revenues, and every kind of
asset, real or personal, became the property of
the [Town,] and the [Board] stood dissolved
with no further authority on November 26, 2004,
when the bond indebtedness was retired.
That since that time, the [Board] has not
existed as a corporation or any legal entity
and the [Board] and its employees only acted as
employees of the [Town] in conducting the
operations of the ... water system."
The trial court held that the Town had "the authority to take
immediate control of all the assets of the water system."
From that judgment, the Board has appealed.
On appeal, the Board concedes that, "strictly speaking,"
it "has not issued any bonds since 2004," when it paid its
bonded indebtedness in full.
Board's brief, at 8 (emphasis
However, it contends that, under its water-purchase
agreement with the District, it is "obligated for [the] bonded
indebtedness of [the District]," which makes it "tantamount"
to a "bonded indebtedness" of the Board itself.
brief, at 5.
It insists that the trial court improperly
"dissolve[d] the Board in light of the Board's continuing
legal and contractual indebtedness that was incurred for the
benefit of the Town and the surrounding communities," Board's
brief, at 6 (emphasis added), and that its dissolution "could
only be based on an absurdly literal
construction of the
Board's reply brief, at 4 (emphasis
According to the Board, this construction fails to
recognize that "sophisticated financial arrangements," such as
the agreements between the District and the purchasers, which
allow "neighboring water boards ... [to] partner together,"
Board's brief, at 23.
between the Board and the District is not analogous -- or
tantamount -- to bonded indebtedness and that the judiciary is
required to apply § 11-50-316(b) in accord with its plain
Although the water-purchase agreement recited that its
purpose was to facilitate the District's payment of its own
bond issue, it merely required the Board to buy each month
"such quantity of water" as it needed "for resale through
It was in the nature of a standard
"requirements contract" in which "the buyer expressly agrees
to buy all of his requirements of a stated item from the
seller," John D. Calamari & Joseph M. Perillo, The Law of
issuance of a bond.
Indeed, requirements contracts have, in
the past, encountered judicial disfavor on the theory that
they were "illusory," that is, that "the buyer might refrain
from having requirements."
Id. at 240 (emphasis added).
water-purchase agreement between the Board and the District
was clearly not tantamount to bonded indebtedness.
"In determining the meaning of a statute, this
Court looks to the plain meaning of the words as
written by the legislature. As we have said:
"'"Words used in a statute must be given
commonly understood meaning, and where
plain language is used a court is bound to
interpret that language to mean exactly
what it says.
If the language of the
statute is unambiguous, then there is no
room for judicial construction and the
clearly expressed intent of the legislature
must be given effect."'
"Blue Cross & Blue Shield v. Nielsen, 714 So.2d 293,
296 (Ala. 1998) (quoting IMED Corp. v. Systems Eng'g
Assocs. Corp., 602 So. 2d 344, 346 (Ala. 1992)); see
also Tuscaloosa County Comm'n v. Deputy Sheriffs'
Ass'n, 589 So. 2d 687, 689 (Ala. 1991); Coastal
States Gas Transmission Co. v. Alabama Pub. Serv.
Comm'n, 524 So. 2d 357, 360 (Ala. 1988); Alabama
Farm Bureau Mut. Cas. Ins. Co. v. City of Hartselle,
460 So. 2d 1219, 1223 (Ala. 1984); Dumas Bros. Mfg.
Co. v. Southern Guar. Ins. Co., 431 So. 2d 534, 536
(Ala. 1983); Town of Loxley v. Rosinton Water,
Sewer, & Fire Protection Auth., Inc., 376 So. 2d
705, 708 (Ala. 1979). It is true that when looking
at a statute we might sometimes think that the
ramifications of the words are inefficient or
unusual. However, it is our job to say what the law
is, not to say what it should be. ... To apply a
different policy would turn this Court into a
legislative body, and doing that, of course, would
be utterly inconsistent with the doctrine of
separation of powers."
DeKalb County LP Gas Co. v. Suburban Gas, Inc., 729 So. 2d
270, 275-76 (Ala. 1998).
The meaning of § 11-50-316(b) is clear and unambiguous:
"When the principal of and the interest on all bonds of such
corporation payable from the revenues of any system owned by
such corporation shall have been paid in full, then title to
dissolved," or, failing the issuance of any bonds, it may be
In other words, where a public corporation
organized for the purpose of operating a water system has
issued bonds, that corporation is dissolved by operation of
law upon the retirement of the bonds.
It is the existence of
an issuing corporation's own bonded indebtedness, not the
amorphous obligations of those with whom the corporation has
other contractual relationships, that holds in abeyance the
dissolution trigger of the statute.
essentially concedes that the trial court's judgment is in
accord with the plain language of the statute, it invites us
to expand the scope of the statute by judicial construction.
This we may not do.
"[C]ourts may not 'amend statutes so as to make them
express what [the courts] conceive the legislature
would have done or should have done.' ... Neither is
it the role of the courts to 'usurp the role of the
legislature and correct defective legislation or
amend statutes under the guise of [judicial]
Siegelman v. Chase Manhattan Bank (USA), Nat'l Ass'n, 575 So.
2d 1041, 1046 (Ala. 1991) (quoting Town of Loxley v. Rosinton
Water, Sewer & Fire Prot. Auth., Inc., 376 So. 2d 705, 708
It may be, as the Board asserts, that the
result in this case fails to accommodate the "sophisticated
natural resources" requires.
If that is so, however, the
must come from the legislature, not from this Court by
way of judicial fiat.
In short, the trial court did not err in holding that the
Town had "the authority to take immediate control of all the
assets of the water system."
Its judgment is, therefore,
Cobb, C.J., and Bolin, Murdock, and Main, JJ., concur.