Bill Kettlewell Excavating, Inc. v. St. Clair County Health Dept.
| Decision Date | 05 March 1991 |
| Docket Number | Docket Nos. 113350,118031 |
| Citation | 468 N.W.2d 326,187 Mich.App. 633 |
| Parties | BILL KETTLEWELL EXCAVATING, INC., d/b/a Fort Gratiot Sanitary Landfill, Plaintiff-Counter-Defendant-Appellant, v. ST. CLAIR COUNTY HEALTH DEPARTMENT, Defendant-Counter-Plaintiff-Appellee, and Michigan Department of Natural Resources, Intervening Defendant-Counter-Plaintiff-Appellee. BILL KETTLEWELL EXCAVATING, INC., d/b/a Fort Gratiot Sanitary Landfill, Plaintiff-Counter-Defendant-Appellee, v. ST. CLAIR COUNTY HEALTH DEPARTMENT, Defendant-Counter-Plaintiff-Appellant, and Jon B. Parsons, Defendant-Counter-Plaintiff-Appellant, and Michigan Department of Natural Resources, Intervening Defendant-Counter-Plaintiff. 187 Mich.App. 633, 468 N.W.2d 326, 22 Envtl. L. Rep. 20,288 |
| Court | Court of Appeal of Michigan — District of US |
[187 MICHAPP 634] Honigman, Miller, Schwartz & Cohn by Robert [187 MICHAPP 635] A. Fineman and Daniel P. Perk, Detroit, and Luce Henderson, Bankson, Heyboer, Lane, Burleigh & Currier by David R. Heyboer, Port Huron, for Bill Kettlewell Excavating, Inc.
Robert H. Cleland, St. Clair County Corp. Counsel, Port Huron, and Beier, Howlett by Lawrence R. Ternan and Margaret Battle Kiernan, Bloomfield Hills, for the St. Clair County Health Dept. and Jon Parsons.
Frank J. Kelley, Atty. Gen., Gay Secor Hardy, Sol. Gen., and Thomas J. Emery and Leo H. Friedman, Asst. Attys. Gen., for the Dept. of Natural Resources.
Before McDONALD, P.J., and HOOD and REILLY, JJ.
These consolidated appeals arose from plaintiff's operation of the Fort Gratiot Sanitary Landfill in St. Clair County. In Docket No. 113350, plaintiff appeals by leave granted from a circuit court order requiring it either to apply for a new operating license or to obtain approval from the Department of Natural Resources for the transfer of the existing license issued to plaintiff prior to the sale of its stock. In Docket No. 118031, defendants St. Clair County Health Department and Jon B. Parsons, its director, appeal as of right from the court's order dismissing their counterclaims initiated because of plaintiff's importation and disposal of out-of-state waste.
On September 1, 1987, the DNR granted an operating license to the Fort Gratiot Sanitary Landfill in Port Huron. Fort Gratiot is the assumed name for Bill Kettlewell Excavating, Inc., a Michigan [187 MICHAPP 636] corporation. William T. Kettlewell, the sole stockholder of his excavating company, was the "responsible person to contact" named on the operating license when issued.
In July 1988, Kettlewell Excavating's stock was sold to Stanwix Corporation, another Michigan corporation. Thereafter, William Kettlewell notified the DNR that he no longer was a shareholder in Bill Kettlewell Excavating, Inc., and that he no longer was involved in the operation of Fort Gratiot. Jon Parsons, director of the St. Clair County Health Department, notified representatives of Environmental Management Alternatives & Consulting, Inc., a principal shareholder of Stanwix Corp., that a new license naming another "responsible person to contact" was required for the continued operation of the Fort Gratiot Sanitary Landfill. In conjunction with this demand, Parsons issued a cease and desist order pursuant to Sec. 17(2) of the Solid Waste Management Act (SWMA), M.C.L. Sec. 299.401 et seq.; M.S.A. Sec. 13.29(1) et seq.
Kettlewell Excavating commenced an action in circuit court against the St. Clair County Health Department, seeking to enjoin enforcement of the cease and desist order; a preliminary injunction was granted.
The St. Clair County Health Department and Jon Parsons counterclaimed, seeking (1) to require Kettlewell Excavating to obtain a new operating license for the landfill because of the sale of stock, and (2) to prevent Fort Gratiot from importing and disposing of out-of-state waste. The DNR intervened and also filed counterclaims against Kettlewell Excavating that requested the same relief. In addition, both the St. Clair County Health Department and the DNR requested a preliminary injunction on both claims in their countercomplaints.
Kettlewell Excavating's motion for summary [187 MICHAPP 637] disposition of the counterclaims was entertained by the trial court along with counter-plaintiffs' requests for preliminary injunctions. The trial court granted a preliminary injunction to prevent further importation and disposal of out-of-state waste by Fort Gratiot. The court also ruled that the sale of Kettlewell Excavating's stock required the corporation either to obtain a new operating license or to obtain the DNR's approval for a transfer of the existing license.
During the pendency of the counterclaims, the Solid Waste Management Act was amended to require explicit authorization for the importation and disposal of out-of-state waste to be included in the approved solid waste management plans of the importing and exporting counties. See M.C.L. Sec. 299.413a; M.S.A. Sec. 13.29(13a) and M.C.L. Sec. 299.430(2); M.S.A. Sec. 13.29(30)(2). Kettlewell Excavating moved to dismiss the counterclaims as moot on the basis of the amendments, but indicated that it intended to challenge the constitutionality of those amendments in federal court. In addition, Kettlewell Excavating informed the trial court that it would discontinue its importation and disposal of foreign waste pending resolution of its constitutional challenge. The trial court then dismissed the counterclaims with prejudice, and denied counter-plaintiffs' motion for reconsideration.
In Docket No. 113350, Kettlewell Excavating appeals by leave granted the circuit court's order requiring it either to apply for a new operating license or to obtain approval from the DNR to transfer its existing license. Plaintiff raises two independent bases for reversal: (1) that a change in stock ownership of a licensed landfill facility [187 MICHAPP 638] does not mandate the acquisition of a new operating license, and (2) that defendants failed to comply with the statutory prerequisites under the SWMA and the Administrative Procedures Act M.C.L. Sec. 24.201 et seq.; M.S.A. Sec. 3.560(101) et seq., for the suspension or revocation of its operating license.
A
We agree with plaintiff that the trial court erred in ruling, as a matter of law, that the sale of Kettlewell Excavating's stock required it either to apply for a new license or to seek approval from the DNR for a transfer of its existing license. We reach this conclusion on the basis of our reading of the SWMA, the administrative rules promulgated thereunder, and general principles of corporate law.
Section 13 of the SWMA 1 addresses the necessity of the acquisition of an operating license for solid waste disposal areas, and provides in part:
(1) A person shall dispose of solid waste at a disposal area licensed under this act unless a person is permitted by state law or rules promulgated by the department to dispose of the solid waste at the site of generation.
(2) Except as otherwise provided in this section or in section 22a, a person otherwise allowed under this act to own or operate a solid waste disposal area shall not conduct, manage, maintain, or operate a disposal area within this state without a license from the director, contrary to an approved solid waste management plan, or contrary to a permit, license, or final order issued under this act. A person who intends to conduct, manage, maintain, or operate a disposal area shall make a prior license application to the director [187 MICHAPP 639] through a certified health department. [Emphasis added.]
The SWMA specifically defines the term "person" to include a corporation. M.C.L. Sec. 299.405(8); M.S.A. Sec. 13.29(5)(8). 2 Consequently, Bill Kettlewell Excavating, Inc., doing business as Fort Gratiot Sanitary Landfill, is prohibited from operating the disposal area without a license issued by the DNR. It is undisputed that Fort Gratiot made a prior application and was granted a license by the DNR for its intended operation of the disposal area. However, Sec. 13 does not specifically require an already licensed disposal area to obtain a new license when the stock of the corporation has been transferred. In fact, the entire act is silent on the effect of the sale of stock on the continued viability of a previously issued operating license. Unless such legislative intent can be discerned from the statutory language, we will not read such a requirement into the act.
Bill Kettlewell Excavating, Inc., was a viable and certified Michigan corporation when it was granted an operating license for Fort Gratiot in 1987. Defendants argue, however, that because William Kettlewell sold his entire interest in the corporation, Fort Gratiot was required to apply for a new license before the expiration of its existing license. 3 Fundamental principles of corporate law reveal, however, that this claim is without legal support.
A corporation is a legal entity distinct from its shareholders, even though all of the stock is held by a single individual. Bourne v. Muskegon Circuit Judge, 327 Mich. 175, 191, 41 N.W.2d 515 (1950). [187 MICHAPP 640] Therefore, while the sale of stock will change the composition of the equity owners of the corporation, the sale does not alter the distinct legal existence of that corporation. O.D. Silverstein, M.D., P.C. v. Services, Inc., 165 Mich.App. 355, 359, 418 N.W.2d 461 (1987). This remains true even if the purchaser of the stock is another corporation. 18 Am.Jur.2d, Corporations, Secs. 55, 57, pp. 860, 864. Consequently, we find that Bill Kettlewell Excavating, Inc., doing business as Fort Gratiot Sanitary Landfill, at all times retained its distinct legal existence apart from its prior and current shareholders. Fort Gratiot therefore, continued to be a duly licensed disposal area irrespective of the sale of its stock to Stanwix Corporation.
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