State ex rel. Prosser v. Indiana Waste Systems, Inc.

• Decision Date: 23 November 1992
• Docket Number: No. 45A04-9102-CV-56,45A04-9102-CV-56
• Citation: 603 N.E.2d 181
• Parties: STATE of Indiana on the Relation of Kathy PROSSER, Commissioner, Indiana Department of Environmental Management (plaintiff below), and City of Gary (defendant below), Appellants, v. INDIANA WASTE SYSTEMS, INC. (intervenor below), Appellee. 1
• Court: Indiana Appellate Court

Page 181

603 N.E.2d 181

STATE of Indiana on the Relation of Kathy PROSSER,

Commissioner, Indiana Department of Environmental

Management (plaintiff below), and City

of Gary (defendant below), Appellants, v. INDIANA WASTE SYSTEMS, INC. (intervenor below), Appellee.

No. 45A04-9102-CV-56. ¹

Court of Appeals of Indiana,

Fourth District.

Nov. 23, 1992.

Timothy J. Junk, Indianapolis, John C. Hamilton, Doran, Blackmond, Ready, Hamilton & Williams, South Bend, for appellant-plaintiff Indiana Dept. of Environmental Management.

Lewis D. Beckwith, Alan L. McLaughlin, James W. Clark, Baker & Daniels, Indianapolis, Gilbert King, Jr., Gary, for appellant City of Gary.

Robert F. Parker, Joy L. Colwell, Beckman, Kelly and Smith, Hammond, for appellee-intervenor, Indiana Waste Systems, Inc.

Steven R. Crist, Singleton Levy & Crist, Munster, Kevin M. Murphy, Latham & Watkins, Chicago, Ill., William J. Brown, Emmens, Hurd, Kegler & Ritter, Columbus, Ohio, for amici curiae.

SHIELDS, Judge.

The Indiana Department of Environmental Management (IDEM) and the City of Gary (Gary) appeal the judgment which the trial court entered after it rejected an agreed judgment submitted by IDEM and Gary. Indiana Waste Systems, Inc. (IWS) cross appeals the trial court's refusal to grant IWS certain litigation expenses.

We affirm in part and reverse in part with instructions to approve the proposed agreed judgment.

ISSUES

The parties have raised various issues in their briefs, which we rephrase as:

1. Whether the trial court erred in finding Gary in contempt of court.

2. Whether the trial court erred in refusing to approve the agreed judgment.

3. Whether the trial court erred by granting IWS leave to intervene.

4. Whether the trial judge erred by refusing to recuse himself from the case.

5. Whether the trial court erred by refusing to award IWS certain litigation expenses as costs.

FACTS ²

The Appellants in this case, IDEM and Gary, were originally adversaries. IDEM was the plaintiff, Gary the defendant. After pursuing their respective roles as adversaries over the years that comprise the life of this case, IDEM and Gary eventually resolved their dispute and submitted an agreed judgment to the trial court. However, before the trial court acted upon the agreed judgment, a third party, IWS, filed a motion to intervene, which the trial court granted. After IWS joined the case, the trial court rejected the agreed judgment submitted by IDEM and Gary, and entered its own judgment relative to the issues. The facts most relevant to the appeal are set out below.

In 1977, the Indiana Stream Pollution Control Board, the administrative predecessor of IDEM, filed a complaint alleging that conditions at a solid waste disposal facility owned by Gary (the Dump) violated an agreed administrative order between itself and Gary. The Board sought preliminary and permanent injunctive relief. On January 29, 1980, the trial court issued a preliminary injunction. On appeal, this court affirmed the trial court's decision. See City of Gary v. Stream Pollution Control Bd. (1981), Ind.App., 422 N.E.2d 312. Subsequently, in a memorandum decision, this court reversed the trial court's denial of IDEM's request for a permanent injunction. On June 21, 1985, the trial court issued a permanent injunction which mandated that Gary close the Dump. On July 9, 1985, the trial court vacated the injunction on Gary's motion and ordered the parties to explore settlement. In the meantime, Gary was ordered to apply six inches of impermeable soil on a daily basis to the Dump.

On June 1, 1988, IDEM filed a contempt petition, claiming Gary had failed to comply with the trial court's order specifying a daily soil cover. On November 17, 1988, the trial court issued its judgment finding Gary in civil contempt, ordering Gary to cease disposal activity immediately and to cease operating the Dump in 180 days, and fining Gary $375,000. This order was stayed on November 21, 1988. On December 23, 1988, IDEM and Gary entered into an agreed modification (1988 Agreed Judgment) of the November order that allowed disposal activity at the Dump to continue until January 1, 1990, and established June 30, 1991, as the date by which Gary must complete closure of the Dump.

On January 2, 1990, Gary filed a motion to stay enforcement of the 1988 Agreed Judgment and the trial court temporarily stayed the January 1, 1990 deadline. On February 15, 1990, the trial court denied the motion to stay enforcement and ordered the parties to comply with the 1988 Agreed Judgment which specified that the operation of the Dump cease and closure commence. This February 15, 1990 order was stayed "insofar as the Order requires [Gary] to cease operating [the Dump] or commence or complete [its] closure," in an order dated February 23, 1990. The trial court continued the stay a second time on March 23, 1990, pending a hearing scheduled for May 11, 1990.

In May of 1990, Gary and IDEM worked toward settlement. At that time, Gary was negotiating with IWS ³ for IWS to operate the Dump. IWS is a company that owns property near the Dump which it desires to operate as a waste disposal facility.

Because IDEM and Gary were actively pursuing a resolution of the litigation, IDEM and Gary sought, and believed they obtained, a continuance of the hearing scheduled for May 11, 1990; hence neither party appeared at the hearing. In the parties' absence, the trial court issued an order directing the parties to obey the 1988 Agreed Judgment, pursue all remedies necessary to accomplish compliance with that judgment, and to appear on May 30, 1990, to report their compliance with the 1988 Agreed Judgment or, alternatively, to show cause why they should not be held in contempt.

At the May 30, 1990 proceeding, Gary reported that its negotiations with IWS were not complete and requested additional time. IDEM reported that it was waiting for Gary to obtain a commitment from a third party before engaging in further negotiations. The trial court instructed Gary to submit a draft of the agreement it had been negotiating with IWS and directed the parties to reconvene the next day, May 31, 1990.

The next day, Gary informed the trial court that it was unable to reach an agreement with IWS and requested another extension to seek another third party. The On June 4, 1990, Gary announced that it had reached an agreement with Mid-American Waste Systems of Indiana (Mid-American) and presented IDEM and the trial court with a memorandum of understanding between Gary and Mid-American. At the end of the hearing, the trial court issued an order in which it found that an agreement did not exist, and that Gary was in contempt for "willfully violat[ing] and refus[ing] to obey [the trial] court's Judgment of December 23, 1988." Record I at 547. The trial court ordered Gary to pay $1,540,000 as a "fine and civil penalty for contempt at the rate of Ten Thousand Dollars ($10,000.00) per day for 154 days, being the elapsed time from January 2, 1990, when the [Dump] was to stop receiving solid waste to the present day." Id. The trial court specified a $10,000 per day "fine and civil penalty" to be imposed each additional day that the Dump accepted solid waste, ordered forfeiture of all revenues Gary collected in connection with operating the Dump after January 1, 1990, and, "to ensure compliance" with its order, ordered, with delayed enforcement, that the Mayor of Gary and the President of the Gary Common Council be "remanded to the custody of the Sheriff of Lake County, Indiana, for incarceration in the Lake County Jail for a period of thirty (30) days...." Id. at 547-48.

trial court continued the matter until June 4, 1990.

On June 5, 1990, the trial court held a status hearing to review Gary's compliance with the June 4, 1990 order. Gary and IDEM appeared and submitted an agreed judgment to which was attached an agreement between Gary and Mid-American. Under the Gary/Mid-American agreement, Mid-American was to operate the Dump, and perform remedial activities, and to be responsible for closure and post-closure activities at the Dump. The agreement between Gary and Mid-American required the Gary Common Council's approval. It further provided that "[f]ailure of the Common Council to approve the attached Agreement shall render this Agreed Judgment null and void." Record I at 759.

The trial court advised it would review the proposed agreed judgment.

The following day, IDEM and Gary submitted a joint motion to stay the trial court's order of June 4, 1990. The trial court granted the stay until July 2, 1990, stated it would take the agreed judgment under advisement pending final action by the Gary Common Council, and set a hearing for July 2, 1990.

On June 29, 1990, IWS filed a motion to intervene and a complaint, and the trial court continued the July 2 hearing and the stay until July 27, 1990. IWS filed its amended complaint in intervention on July 19, 1990. On July 27, 1990, the trial court granted IWS's motion to intervene, continued its stay of the June 4, 1990 sanctions order, and delayed the hearing on the agreed judgment.

Eventually, IWS and Gary filed motions seeking a summary ruling and IDEM filed a motion for judgment on the pleadings.

The trial court issued an "omnibus decree" on December 21, 1990. In this decree, the trial court instructed the parties to choose one of two alternative resolutions of the case. ⁴ The trial court requested the On January 10, 1991, City filed a motion requesting the trial judge to recuse himself because the judge was a prior client of an attorney who represented the company that sold IWS the land it sought to operate as a waste disposal facility.

parties to inform it of their respective preferences in writing by December 28, 1990.

On February 15, 1991, the court entered the judgment from which IDEM and Gary presently appeal. In that judgment, the trial court denied Gary's motion for recusal, denied IWS's motion for...