SCWA files suit against VPWA

The Sequoyah County Water Association (SCWA) has filed suit against Vian Public Works Authority (VPWA), petitioning for a declamatory judgement regarding a water rate increase.

The petition was filed on February 5 in Sequoyah County District Court and states that the Plaintiff (SCWA) and the Defendant (VPWA) entered into a contract on Sept. 29, 2009, with the initial term of the contract being 50 years.

The petition states that on Oct. 3, 2024, the SCWA issued notice to VPWA of a water rate increase and on Nov. 30, 2024, VPWA issued a letter contending that no rate increase can be imposed unless and until VPWA agrees to the increase.

By petitioning for a declamatory judgement, this means that the SCWA’s attorneys are asking the court to issue a legal ruling clarifying the rights and obligations of the parties involved in the contract, essentially seeking the court’s interpretation of the contract terms without necessarily seeking damages or other immediate action, to prevent future disputes or uncertainties about the contract’s meaning. Any party to a contract may petition the court to clarify the rights and obligations in the event of a legal controversy.

According to the original contract, VPWA’s interpretation of the contract is that the SCWA can never, over the course of its 50-year term of the contract, increase the rate for water sold to the defendant is not supported by the language of the contract or the intent of the parties. The VPWA’s position/interpretation of the contract is also in direct conflict with Oklahoma law, which provides ‘The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity,’ Okla. Stat. tit. 15, § 154.

The Defendant’s position that the Plaintiff is obligated to sell and deliver water to the Defendant regardless of the cost to do so, and the Plaintiff can never increase the rate for water unless and until the Defendant agrees to a rate increase, is an absurd position/interpretation of the attached contract.

In paragraph 9 of the contract it states: ‘If neither party hereto delivers notice to the other within said 90-day period, the terms of this agreement and the rates set forth herein shall be extended for one year, and from year to year until such time as notice is delivered 90 days prior to June I in accordance with the intent set out in this paragraph.’

The clear intent of the parties was and is that rates to be charged by Plaintiff for water, can be increased in any year provided the notice of rate increase is provided to the Defendant at least 90 days prior to June 1. Here Plaintiff delivered its notice of rate increase more than 90 days prior to June 1, 2025.

Defendant’s contention/position that the rate increase imposed on Defendant by the Plaintiff includes increased capitalization of the Plaintiff’s system is in error and meritless.

Wherefore, Plaintiff prays that the Court interpret the contract and determine that Plaintiff may indeed issue notices of rate increases, and that Plaintiff is not required to increase rates only if the Defendant agrees to such a rate increase. Plaintiff further prays that this Court determine that if the Defendant fails to pay the rate imposed by Plaintiff, that Defendant will be in breach of the contract and Plaintiff is entitled to terminate the contract for material breach.

No court dates or hearings have been scheduled as of press time.