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Alexander Loop, LLC v. City of Eugene

Court of Appeals of Oregon

May 30, 2019

ALEXANDER LOOP, LLC, an Oregon limited liability company; Goodpasture Partners, LLC, an Oregon limited liability company;and BDC-Eugene, LLC, an Oregon limited liability company, Plaintiffs-Appellants Cross-Respondents,
v.
CITY OF EUGENE, Defendant-Respondent Cross-Appellant.

          Argued and Submitted November 30, 2018

          Lane County Circuit Court 16CV40821; Charles D. Carlson, Judge.

          Heidee Stoller argued the cause for appellants-cross-respondents. On the briefs were Cody M. Weston, Courtney R. Peck, and Perkins Coie LLP.

          Lauren Sommers argued the cause and fled the briefs for respondent-cross-appellant.

          Before Armstrong, Presiding Judge, and Tookey, Judge, and Shorr, Judge.

         Case Summary:

Plaintiffs, a group of property developers, brought claims for breach of contract and unjust enrichment against the City of Eugene. Those claims were based on allegations that the city had failed to fully reimburse plaintiffs, as set out in a letter agreement, for system development charge credits that plaintiffs had generated through qualified public improvements during the course of a private development project. The trial court granted the city's motion for summary judgment on both claims. Plaintiffs appeal. In addition, the city cross-appeals and assigns error to the denial of its earlier motion for summary judgment based on claim preclusion.

         Held:

         The trial court did not err. With respect to plaintiffs' claim for breach of contract, the city code does not permit the [297 Or.App. 776] city to reimburse plaintiffs in the manner demanded, and the letter agreement does not provide for that reimbursement or contain a promise by the city to deviate from the code. With respect to plaintiffs' claim for unjust enrichment, plaintiffs failed to establish that the circumstances of this case fall within one of the established legal categories of unjust enrichment as required by Larisa's Home Care, LLC v. Nichols-Shields, 362 Or. 115, 505 P.3d 912 (2017). Finally, the Court of Appeals declined to address the city's cross-appeal in light of its disposition.

         [297 Or.App. 777] SHORR, J.

         This case involves claims for breach of contract and unjust enrichment brought by a group of property developers against the City of Eugene. Plaintiffs had received permission from the city to develop a 23-acre property with residential and commercial units. As part of the development process, plaintiffs agreed to undertake certain improvements to the transportation infrastructure near the development. Plaintiffs' claims are based on allegations that the city failed to fully reimburse plaintiffs, as agreed in a letter, for approximately $1.3 million in "system development charges" (SDCs) based on SDC credits that plaintiffs would generate through those infrastructure improvements. The trial court granted the city's motion for summary judgment on plaintiffs' claims for breach of contract and unjust enrichment. For the reasons explained below, we affirm, concluding that (1) the letter agreement does not contain a promise by the city to pay plaintiffs $1.3 million but only an estimate of the SDC credits that plaintiffs would receive from the infrastructure improvements and (2) the city was not unjustly enriched under the circumstances of this case.[1]

         I. BACKGROUND

         This case turns on whether the city was obligated to reimburse plaintiffs for SDC credits generated during the course of the development project. We begin with an explanation of the applicable laws governing SDCs and SDC credits. We then summarize the material facts, consistently with our standard of review of a grant of summary judgment, in the light most favorable to plaintiffs as the nonmoving party. Evans v. City of Warrenton, 283 Or.App. 256, 258-59, 388 P.3d 1167 (2016).

         SDCs are fees that cities may charge developers to account for the increased demand on certain infrastructure systems caused by new development. ORS 223.299(4)(a). Cities typically assess SDCs for "capital improvements" associated with the new development. Capital improvements are [297 Or.App. 778] defined by statute as public assets or facilities used for the following city infrastructure systems:

"(A) Water supply, treatment and distribution;
"(B) Waste water collection, transmission, treatment and disposal;
"(C) Drainage and flood control;
"(D) Transportation; or
"(E) Parks and recreation." ...

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