Greenway Envtl. Servs. v. Green (In re Riverbend Envt'l. Servs.)
| Decision Date | 17 March 2022 |
| Docket Number | ADV. PROC. 20-00050-KMS,19-03828-KMS |
| Court | U.S. Bankruptcy Court — Southern District of Mississippi |
| Parties | IN RE: RIVERBEND ENVIRONMENTAL SERVICES LLC, DEBTOR v. ORLANDO D. GREEN et al., DEFENDANT GREENWAY ENVIRONMENTAL SERVICES LLC, PLAINTIFF |
IN RE: RIVERBEND ENVIRONMENTAL SERVICES LLC, DEBTOR
GREENWAY ENVIRONMENTAL SERVICES LLC, PLAINTIFF
v.
ORLANDO D. GREEN et al., DEFENDANT
No. 19-03828-KMS
ADV. PROC. No. 20-00050-KMS
United States Bankruptcy Court, S.D. Mississippi
March 17, 2022
CHAPTER 11
OPINION AND ORDER GRANTING GREENWAY'S MOTION FOR PARTIAL SUMMARY JUDGMENT
KATHARINE M. SAMSON, UNITED STATES BANKRUPTCY JUDGE
This matter is before the Court on cross-motions for partial summary judgment by Plaintiff Greenway Environmental Services LLC, ECF No. 60, and certain Defendants ("Family Defendants"), ECF No. 57. This proceeding is core under 28 U.S.C. § 157(b)(2)(O).
Debtor Riverbend Environmental Services LLC owned and operated a landfill in Jefferson County, Mississippi. Greenway now owns and operates the landfill, having bought substantially all Riverbend's assets in a sale under 11 U.S.C. § 363. The sale excluded approximately 110 acres of land co-owned by Riverbend and the Family Defendants ("Co-Owned Property"). Greenway wants to also buy the Co-Owned Property and toward that end filed the Amended Complaint, ECF No. 46, seeking relief under § 363 and a declaratory judgment concerning the enforceability of
certain provisions in two leases executed more than twenty-eight years ago (together, "Leases"; individually, "Dinelli Lease" and "Green Lease"). The respective lessors were one of the Family Defendants, Katie Ruth Denelli aka Katie Ruth Dinelli, and a now-deceased forebear, Marrion L. Green. The lessee was a corporation whose ownership interest in the Co-Owned Property preceded Riverbend's.
The cross-motions pertain only to the Amended Complaint's Count 5, which seeks a declaratory judgment on the provisions at issue ("Covenants") in both Leases.[1] See ECF No. 46 at 19-20. Greenway moved for summary judgment as to both Leases, arguing that the Covenants are unenforceable. The Family Defendants moved for summary judgment as to only the Green Lease, arguing that its Covenant is enforceable and consequently that the Family Defendants own not only their 1/3 undivided interest in the Co-Owned Property but also are entitled to Riverbend's 2/3 undivided interest.
As to both Leases, there is no dispute as to any material fact, and the Covenants are unenforceable against Riverbend as a matter of law. Consequently, summary judgment is granted to Greenway.[2]
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a) (made applicable by Fed.R.Bankr.P. 7056). "A fact is 'material' if its resolution in favor
of one party might affect the outcome of the lawsuit under governing law. An issue is 'genuine' if the evidence is sufficient for a reasonable [fact-finder] to return a verdict for the non-moving party." Ginsberg 1985 Real Estate P'ship v. Cadle Co., 39 F.3d 528, 531 (5th Cir. 1994) (citations omitted). A party asserting that a fact either is genuinely disputed or cannot be genuinely disputed must support the assertion by citations "to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c)(1)(A).
The moving party bears the initial responsibility of informing the court of the basis for its motion and the parts of the record that indicate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "Once the moving party presents the . . . court with a properly supported summary judgment motion, the burden shifts to the nonmoving party to show that summary judgment is inappropriate." Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). "The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). But the nonmovant must meet its burden with more than "metaphysical doubt," "conclusory allegations," "unsubstantiated assertions," or a mere "scintilla" of evidence. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
On cross-motions for summary judgment, each movant must establish the absence of a genuine issue of material fact and the movant's entitlement to judgment as a matter of law. Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 538-39 (5th Cir. 2004). "If there is no genuine issue and one of the parties is entitled to prevail as a matter of law, the court may render summary judgment." Id. at 539. "[C]ross-motions may be probative of the non-existence of a
factual dispute when . . . they demonstrate a basic agreement concerning what legal theories and material facts are dispositive." Petro Harvester Operating Co. v. Keith, 954 F.3d 686, 700 (5th Cir. 2020) (quoting Bricklayers Local 15 v. Stuart Plastering Co., 512 F.2d 1017, 1023 (5th Cir. 1975)).
UNDISPUTED MATERIAL FACTS
Facts considered undisputed are the facts supported by the record documents relied on by both Greenway and the Family Defendants, facts that may be judicially noticed, and facts that Greenway supported with competent summary judgment evidence that the Family Defendants did not address.[3]
1.Riverbend filed the underlying chapter 11 case on October 25, 2019. See ECF No. 1, In re Riverbend Envtl. Servs. LLC, Ch. 11 Case No. 19-03828-KMS (Bankr. S.D.Miss.).
2.Riverbend assigned its rights against the Family Defendants to Greenway. ECF No. 60-2.
3.The Family Defendants own a 1/3 undivided interest in the Co-Owned Property; Riverbend owns a 2/3 undivided interest. ECF No. 58 at 3; ECF No. 60 at 4-5.
4.On November 16, 1993, Marrion L. Green leased his 1/3 undivided interest in the Co-Owned Property-the interest the Family Defendants now own-to Southern Landfill Management Inc. Green Lease, ECF No. 71 at 1.
5. The Green Lease included this provision: "After the last payment, all obligations under this lease shall terminate except for the duty of [Southern Landfill] to provide closure and post closure care as provided by law . . . ." Id. at 6.
6.The Green Lease expired after fifteen years but could be renewed by Southern Landfill for up to ten years on payment of $5000. Id. at 1, 3.
7.The same day Green executed the Green Lease, he also by power of attorney executed the Dinelli Lease between his sister, Katie Ruth Denelli aka Katie Ruth Dinelli, as lessor and Southern Landfill as lessee. Dinelli Lease, ECF No. 60-4. The Dinelli Lease purported to lease Southern Landfill a 45.80-acre tract as shown on an exhibit to the Dinelli Lease that the record does not include.[4] Id. at 2.
8.As did the Green Lease, the Dinelli Lease included this provision: "After the last payment, all obligations under this lease shall terminate except for the duty of [Southern Landfill] to provide closure and postclosure care as provided by law . . . ." Id. at 6.
9.As did the Green Lease, the Dinelli Lease expired after fifteen years but included an option for Southern Landfill to renew for up to an additional ten years upon payment of $5000. Id. at 3.
10.Both Leases were filed in the county land records. ECF No. 60-4 at 13; ECF No. 71 at 16.
11.On May 7, 2009, Southern Landfill filed a chapter 11 bankruptcy case. See ECF No. 1, In re S. Landfill Mgmt. Inc., Ch. 11 Case No. 09-01620-EE (Bankr. S.D.Miss.) (dismissed Oct. 30, 2009).
12.Less than a month later, Green died. ECF No. 60 at 6. 13.The Family Defendants are individuals adjudged to be Green's heirs. See ECF No. 60-8 at 3.
14.On July 10, 2009, Southern Landfill's interest in the Co-Owned Property was transferred to Jefferson Landfill LLC nka Riverbend by a substituted trustee's deed after a foreclosure sale. Sub'd Tr.'s Deed, ECF No. 60-11.
15.Southern Landfill made no payments under the Green Lease, whether for the initial term or the renewal. Cl. 15-1 Pt. 3, Southern Landfill Ch. 11 Case No. 09-01620-EE (proof of claim by Green's estate with amended complaint against Southern Landfill, which Green's estate had planned to file-but did not-in Green's lawsuit against Southern Landfill in the Circuit Court of Jefferson County, Mississippi, Green v. S. Landfill Mgt. Inc., No. 98-0055).
16.Until 2020 when the Family Defendants filed a counterclaim in this adversary proceeding, neither they nor Green's estate nor Dinelli had pursued any legal action to enforce the Leases or the Covenants since 2009. ECF No. 60-9 at 4 (docket sheet for Green v. S. Landfill Mgt. Inc., showing last filing on August 31, 2009); Riverbend Cls. Reg., Ch. 11 Case No. 19-03828-KMS (showing no proof of claim by Dinelli, Green's estate, or Family Defendants).
CONCLUSIONS OF LAW
The Family Defendants assert that a provision in the Green Lease ("Green Covenant") requires Riverbend to convey to them its 2/3 interest in the Co-Owned Property. The Green Covenant provides:
After the landfill is closed or no later than 25 years, [Southern Landfill] will deed to [Green] any property from the purchased undivided interest [that is, Southern Landfill's 2/3 interest] that is not part of the actual landfill.
After closure, post closure, and monitoring periods are over, and the property is released by the MDEQ and/or the EPA, then [Southern Landfill] or its successors shall deed the remainder of the undivided portion to [Green], his heirs or assigns.
ECF No. 71 at 9. The Dinelli Lease includes a similar but more broadly worded provision ("Dinelli Covenant"): "[A]t the end of closure, postclosure, and monitoring and at such time that [Southern
Landfill] is released from any...
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