WM Mobile Bay Envtl. Ctr., Inc. v. City of Mobile Solid Waste Auth.

• Decision Date: 21 December 2014
• Docket Number: Civil Action No. 13-0434-KD-N
• Parties: WM MOBILE BAY ENVIRONMENTAL CENTER, INC., Plaintiff/Counter Defendant, v. THE CITY OF MOBILE SOLID WASTE AUTHORITY, Defendant/Counterclaimant.
• Court: U.S. District Court — Southern District of Alabama

WM MOBILE BAY ENVIRONMENTAL CENTER, INC., Plaintiff/Counter Defendant, v. THE CITY OF MOBILE SOLID WASTE AUTHORITY, Defendant/Counterclaimant.

Civil Action No. 13-0434-KD-N

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

December 21, 2014

ORDER

This action is before the Court on the Plaintiff WM Mobile Bay Environmental Center, Inc.'s motion for summary judgment, memorandum and exhibits (WM Mobile) (doc. 74, 80), defendant The City of Mobile Solid Waste Authority's (SWA) response in opposition and exhibits (doc. 96-98) and WM Mobile's reply and exhibits (doc. 99). Upon consideration and for the reasons set forth herein, the motion is denied in part and granted in part. This action is also before the Court on the Defendant The City of Mobile Solid Waste Authority's (SWA) motion for summary judgment as to Counts I through VII (docs. 75-79), WM Mobile's response and exhibits (doc. 95), and SWA's reply (doc. 101). Upon consideration and for the reasons set forth herein, the motion is denied in part and granted in part.

I. Background

In October 1993, SWA and Transamerican Waste Industries, Inc., a predecessor to WM Mobile, entered into a Solid Waste Management Contract for landfill operations and other solid waste management operations (the Contract). (Doc. 29-1) WM Mobile now alleges that SWA breached the terms of the Contract.

WM Mobile filed its second amended complaint alleging the following causes of action:

Count I - Breach of Contract Relating to Price Adjustments for Landfill Deposits;

Count II - Breach of Contract Relating to Price Adjustments for Transfer Station;

Count III - Breach of Contract Relating to Reimbursements for Capital Expenditures Due to Changes in Laws and Regulations;

Count IV - Breach of Contract Relating to Reimbursements for Increased Operating Costs Due to Changes in Laws and Regulations;

Count V - Breach of Contract Relating to Requests for Service Area Expansion;

Count VI - Breach of Warranty of Good Faith and Fair Dealing;

Count VII - Breach of Indemnification Obligation;

Count VIII - Declaratory Judgment Regarding Section 6.2 of the Contract;

Count IX - Reimbursement for Overpayment of Royalties;

Count X - Breach of Contract Relating to Exclusive Disposal Rights; and

Count XI - Declaratory Judgment Regarding Sections 1.4 and 6.6 of the Contract.

(Doc. 29)

WM Mobile seeks declaratory judgment to establish the current rates for waste disposal at the Landfill and hauling waste from the transfer station to the Landfill. WM Mobile also seeks declaratory judgment as to SWA's contract obligation to work with WM Mobile to expand the service area for the Landfill.

SWA filed an amended counterclaim for breach of contract against WM Mobile alleging that the royalties had been underpaid for 2012 and 2013. (Doc. 9) SWA also answered the second amended complaint and set forth its affirmative defenses. (Doc. 70)

II. Standard of Review

"The court shall grant summary judgment 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). Rule 56(c) governs procedures and provides as follows:

(1) Supporting Factual Positions. A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:

(A) citing 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; or

(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

(2) Objection That a Fact Is Not Supported by Admissible Evidence. A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.

(3) Materials Not Cited. The court need consider only the cited materials, but it may consider other materials in the record.

(4) Affidavits or Declarations. An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.

Fed. R. Civ. P. 56(c).

A party seeking summary judgment bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).

The mere existence of a factual dispute will not automatically necessitate denial; rather, only factual disputes that are material preclude entry of summary judgment. Lofton v. Secretary of Dep't of Children & Family Services, 358 F.3d 804, 809 (11th Cir. 2004). "An issue of fact is material if it is a legal element of the claim under the applicable substantive law which mightaffect the outcome of the case. It is genuine if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Reeves v. C.H. Robinson Worldwide, Inc., 594 F.3d 798, 807 (11th Cir. 2010) (en banc) (citation omitted).

If a non-moving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to summary judgment. Celotex, 477 U.S. at 323. In reviewing whether a non-moving party has met its burden, the Court must stop short of weighing the evidence and making credibility determinations of the truth of the matter. Instead, the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in its favor. Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998-99 (11th Cir. 1992) (internal citations and quotations omitted).

Moreover, the applicable Rule 56 standard is not affected by the filing of cross-motions for summary judgment. See, e.g., Am. Bankers Ins. Group v. United States, 408 F.3d 1328, 1331 (11th Cir.2005); Gerling Global Reins. Corp. of Am. v. Gallagher, 267 F.3d 1228, 1233 (11th Cir.2001). "Cross-motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed." United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir.1984) (citation omitted). The Court is mindful that " '[w]hen both parties move for summary judgment, the court must evaluate each motion on its own merits, resolving all reasonable inferences against the party whose motion is under consideration.' " Muzzy Products Corp. v. Sullivan Industries, Inc., 194 F.Supp.2d 1360, 1378 (N.D. Ga. 2002).

III. Facts¹

The parties do not dispute the existence and formation of the 1993 Contract between SWA and Transamerican, a predecessor to WM Mobile,² for the management and operation of the Landfill and Transfer Station. They do not dispute that WM Mobile is the assignee of all rights and responsibilities under the 1993 Contract. However, the parties dispute the meaning and effect of several of the contract provisions.

The parties also do not dispute that in 2003, SWA entered into a Lease Agreement with Waste Away Group, Inc. (Waste Away) another Waste Management affiliate whereby Waste Away leased the Landfill from SWA for a term ending October 2038. (Doc. 77-5) The Lease was part of a bond issue by SWA in which tax-exempt bonds were issued and the proceeds were used by Waste Away to obtain new disposal cells and liner systems, improve the leachate and methane gas collection systems, and acquire equipment for the landfill. (Doc. 77-5, Exhibit 5, Lease; Doc. 76, p. 4).

IV. Analysis

Whether the 2003 Lease controls the financial obligations instead of the 1993 Contract.

In response to WM Mobile's motion for summary judgment as to Counts I, II, III, and IV, and in its own motion, SWA argues that the 2003 Lease Agreement between Waste Away, WM Mobile's parent company, and SWA is dispositive of all the claims relating to the financialrelationship between the parties, because the Lease restructured the financial obligations and other terms of the 1993 Contract. (Doc. 76, p. 4; Doc. 96, p.1) In support, SWA argues that in 2003, SWA issued tax-exempt revenue bonds in the amount of $4,175,000 for the benefit of WM Mobile and were "issued for the purpose of financing the cost of improving and equipping certain existing solid waste disposal facilities located in Mobile County (the "Bond Financed Facilities") for the benefit of" Waste Away Group and to purchase a cell construction and liner system, install and operate a methane gas system, and purchase equipment. (Doc. 76, p. 4; Doc. 77-7, Tax Certificate and Agreement § 1.2(a); Doc. 96, p. 12, 20). The bonded "Project" was the landfill and the improvements to be constructed thereon and the Lease was entered into when the revenue bonds were issued. SWA argues that the following Lease provisions require WM Mobile to manage and operate the landfill and make improvements at its own expense:

Section 6.1 Possession and Use of Project.

(a) So long as no Lease Default exists, the Company shall be permitted to possess, use, manage, operate and enjoy the Project without hindrance on the part of the Authority, subject, however, to all the terms and conditions of this Lease Agreement.

Section 6.2 Maintenance and Other Operating Expenses.

The Company will, at its own expense, (i) cause the Project to be maintained and kept in good condition, repair and working order, (ii) cause to be made all necessary repairs, renewals, replacements, betterments and improvements to the

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