title
A resolution authorizing the Metropolitan Department of Law to submit an offer of judgment pursuant to Fed. R. Civ. P. 68 to compromise and settle the claims of Lonesome Ten Miles, LLC against the Metropolitan Government in the amount of $345,000, to be paid from the Metro Water Services budget, plus reasonable costs including Lonesome Ten Miles, LLC’s incurred attorneys’ fees, to be paid from the Judgments and Losses Fund.
body
WHEREAS, Lonesome Ten Miles, LLC filed a lawsuit in the United States District Court for the Middle District of Tennessee, which remains pending against the Metropolitan Government, alleging an unlawful exaction of private property arising out of a requirement to upgrade a public water line in 2024; and,
WHEREAS, after investigation, the Metropolitan Department of Law believes that the offer of judgment listed in Section 1 is fair and reasonable and in the best interest of the Metropolitan Government and recommends that any and all claims or causes of action brought or that could have been brought by Lonesome Ten Miles, LLC related to the events detailed above be compromised and settled for $345,000, to be paid from the Metro Water Services budget, plus reasonable costs, to be paid from the Judgments and Losses Fund.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1: The Metropolitan Department of Law is authorized to make offer of judgment pursuant to Fed. R. Civ. P. 68 to compromise and settle the claims of Lonesome Ten Miles, LLC against the Metropolitan Government in the amount of $345,000, to be paid from the Metro Water Services budget, plus reasonable costs including Lonesome Ten Miles, LLC’s incurred attorneys’ fees, to be paid from the Judgments and Losses Fund.
Section 2: This resolution shall take effect from and after its adoption, the welfare of the Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
In 2022, Lonesome Ten Miles, LLC, (“Lonesome”) undertook the renovation of a bar on Division Street which required Lonesome to file a water and sewer availability application with the Department of Water and Sewerage Services (“MWS”). MWS reviews these applications to determine how much domestic water flow-drinking water, dishwashing, restrooms, etc.-is needed for the applicant development. If an applicant requires more than 3,500 gallons per day (“gpd”), an additional fire flow analysis is required. MWS determined that the applicant would require 4,980 gpd, thus triggering a fire flow analysis. Lonesome did not indicate a need for fire flow in its application, so MWS used the default standard to determine fire flow supplied in the Metro Fire Code. The minimum fire flow required for the building Lonesome was renovating is 1,500 gpd.
MWS determined that the existing 6-inch water line was insufficient to deliver the additional fire flow and notified Lonesome, in August 2022, that additional offsite water improvements would be required. Lonesome did not begin the work promptly, its application lapsed, and a new application was filed in September 2023. MWS again notified Lonesome that it would need to make the offsite water improvements but added that they would need to specifically replace 350 feet of 6-inch water line with 8-inch piping along Division Street.
Lonesome did not question or contest the domestic water flow, fire flow, or offsite water improvement determinations by MWS with either MWS or the Fire Marshal. Lonesome upgraded the water line, finishing the project in December 2024 at a cost of $700,000. Subsequently, the Fire Marshal indicated that the project would only need a fire flow of 1,000 gpd to operate the sprinkler system and the 6-inch water line would have been sufficient.
The lack of adequate communication between MWS and Lonesome led to mistaken assumptions about the need for the upgraded water line. Lonesome has filed a takings claim alleging that MWS unconstitutionally required it to pay for the water line in order to receive a building permit. The parties participated in a mediation to negotiate a settlement, but it was unsuccessful.
The Department of Law is recommending that the Metropolitan Government make an Offer of Judgment in order to limit exposure at trial. The offer is for $345,000, plus the amount of documented accrued attorneys’ fees as of the date of the offer. If Lonesome accepts the offer of judgment, it will be treated as a settlement agreement. If Lonesome refuses the offer of judgment the parties will go to trial and if Lonesome is awarded less than the $345,000 at trial, attorneys’ fees will be capped as of the date of the offer of judgment.
Fiscal Note: The total settlement amount is $345,000 to be paid from the Metro Water Services Budget and accrued fees from the Judgments and Losses Fund.