Gladys Lee Durgin purchased a home at Pillsbury Lake in Webster in 1965. The agent for the lakeside subdivision community, Town and Country Homes, Inc., gave her a brochure that advertised the homes as having “piped year-round water.” Residents paid an annual fee for water supply. In 1968, the residents voted to establish a water district under the provisions of RSA 52:1 for the purposes of operating a water supply system, and they continued to pay an annual water fee as well as property taxes to support the district.
In 2003, water supplied to Durgin’s home fell below the state’s minimum peak flow requirement of 20 pounds per square inch (N.H. Admin. Rules, Env-Ws 301.02, 372.332(b)), and for several days no water was provided. Durgin installed an artesian well on her property and unilaterally discontinued her water system connection. She sought reimbursement from the water district for her costs, and filed suit in Franklin District Court claiming breach of an implied contract.
She claimed that she had an implied contract with the water district based on the conduct between them and the district’s obligation to provide adequate water supply. The trial court found that she had failed to present sufficient evidence to support the existence of a contract and approved the district’s motion to dismiss.
Durgin appealed to the Supreme Court, arguing the quid pro quo conduct between her and the water district, the payment of a fee in return for the supply of water, was evidence of an implied contract. The Supreme Court disagreed.
As the Court explained, “A valid, enforceable contract requires offer, acceptance, consideration and a meeting of the minds. For a meeting of the minds to occur, the parties must assent to the same contractual terms.” The Court recognized that although “the conduct of the parties, apart from oral and written words, may establish an enforceable, implied-in-fact contract … subjective expectations are insufficient to create an implied contract.”
The water district acknowledged it had an obligation under RSA 52:1 and N.H. Admin. Rules, Env-Ws 372.32 to provide water to Durgin’s residence, but the Court said, “The mere fact that Durgin paid taxes and an annual water fee in exchange for water for her residence, without more, does not exhibit any intent of the water district to enter into a private implied contract beyond or apart from its obligations to do so under law.” The Court said there was insufficient evidence to establish that the water district assumed the private agreements of the developer of the Pillsbury Lake Subdivision.
The Court noted that the water district is under a March 2004 Department of Environmental Services order to correct violations of various administrative regulations and that RSA 485:58 provides for possible administrative fines and civil and criminal penalties for failure to correct violations.