Waste Services of Decatur, LLC v. Decatur County, Tennessee

Filing 77

ORDER DIRECTING THE PARTIES TO FILE ADDITIONAL BRIEFING AND NOTICE TO THE PARTIES OF SUMMARY JUDGMENT SUA SPONTE. Signed by Chief Judge S. Thomas Anderson on 7/25/18. (mbm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
WASTE SERVICES OF DECATUR, LLC,

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Plaintiff/Counter-Defendant,
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v.
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No. 1:17-cv-01030-STA-egb
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DECATUR COUNTY, TENNESSEE,
)
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Defendant/Counter-Plaintiff,
)
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v.
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)
WASTE INDUSTRIES, LLC,
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Defendant.
)
______________________________________________________________________________
ORDER DIRECTING THE PARTIES TO FILE ADDITIONAL BRIEFING
AND NOTICE TO THE PARTIES OF SUMMARY JUDGMENT SUA SPONTE
______________________________________________________________________________
Before the Court is Defendant Decatur County, Tennessee’s Motion for Summary
Judgment (ECF No. 47) filed on February 8, 2018. Decatur County seeks judgment as a matter
of law on Plaintiff Waste Services of Decatur, LLC’s claims for breach of contract and
declaratory judgment. Decatur County argues that Waste Services filed its breach of contract
claim outside of the six-year statute limitations for contract actions provided by Tenn. Code Ann.
§ 28-3-109(a)(3). 1

The contractual provisions at issue are found at section 2.6(iv) and in

Schedule B to the agreement. Section 2.6(iv) reads as follows: “Leachate disposal/treatment will
remain at no cost to the [landfill] and [Waste Services] for the life of the site, in exchange for
free disposal to Parsons and Decaturville pursuant to Schedule B of this Agreement.” (Contract
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The parties have completed their briefing on the County’s Rule 56 Motion as well as
briefing on Waste Services’ separate motion to dismiss or stay certain claims raised in Decatur
County’s Counterclaim.
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§ 2.6, ECF No. 1-3).

The parties further agreed in Schedule B that “Decaturville and Parsons

will continue to receive free residential waste disposal . . . only so long as leachate treatment and
disposal is provided at no cost to [the landfill] and [Waste Services].” (Sch. B to Contract, ECF
No. 1-3).
Both sides interpret the contract in different ways and have sought relief based on their
differing interpretations of the leachate clause. See Waste Services’ Compl. ¶ 2 (“In exchange
for WSD’s agreement to operate the subject landfill, the County made certain promises,
including agreeing to provide for disposal and treatment of the liquid that leaches from the waste
materials in the landfill, called leachate, at no cost to WSD.”); Decatur Cnty.’s Countercl. ¶ 109,
ECF No. 65 (“Decatur County requests the Court declare that the County has no obligation under
the Contract to provide leachate disposal services, pay for leachate disposal services or act on
behalf of WSD/WI to obtain such services from City of Parsons or Decaturville.”). Decatur
County’s Motion for Summary Judgment assumes for the sake of argument that Waste Services’
construction of the contract is correct and that the County is liable for leachate costs and
expenses at the landfill. But the parties have not argued the proper construction of section
2.6(iv) and Schedule B in their summary judgment briefs.
Upon full consideration of the parties’ arguments, their evidentiary submissions, and the
relevant Tennessee authorities, the Court finds that additional briefing from the parties would aid
the Court in making its determination of the statute of limitations issue. To reach the issues of
whether Waste Services’ claim for breach of contract is untimely and when its claim accrued as a
matter of law, the Court must first construe the contract and decide what the contract required
Decatur County to do. The parties’ pleadings on the correct reading of the leachate clause
suggest to the Court that the clause may be ambiguous and subject to more than one

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interpretation.

Generally, courts resort to rules of construction “[w]here the terms of

the contract are ambiguous.” Maverick Grp. Mktg., Inc. v. Worx Envtl. Prods., Inc., 99 F. Supp.
3d 822, 836 n.45 (W.D. Tenn. 2015) (quoting Planters Gin. Co. v. Fed. Compress & Warehouse
Co., Inc., 78 S.W.3d 885, 890 (Tenn. 2002)).
Therefore, the Court orders the parties to file additional briefs on the proper construction
of section 2.6(iv) and Schedule B. The parties should address the following questions: (1) the
correct construction of section 2.6(iv) and Schedule B as a matter of Tennessee law; (2) whether
section 2.6(iv) and Schedule B are ambiguous as a matter of Tennessee law; (3) if the contract is
ambiguous, whether the Court can use appropriate rules of construction to arrive at the correct
meaning of the contract as a matter of Tennessee law; (4) which Tennessee rules of contract
construction, if any, are appropriate in this case; (5) to the extent the rules of construction
implicate any question of fact, whether there exists a genuine dispute as to those facts; and (6)
any other issues relevant to the proper construction of section 2.6(iv) and Schedule B.
Along with their briefing of the questions of law presented, the parties should also come
forward with any additional evidence to support their positions. The parties should present the
additional evidence in the form of a statement of undisputed facts in accordance with Local Rule
56.1(a) and attach any supporting evidentiary materials to their opening briefs. The parties’
opening briefs are due on or before August 22, 2018. Each side will then have an opportunity to
file a response to the other side’s opening brief and statement of undisputed facts. Each party’s
response to the other party’s statement of undisputed facts should conform to Local Rule 56.1(b).
Response briefs are due on or before September 19, 2018.
The Court’s order hereby constitutes notice to the parties that the Court may grant
summary judgment sua sponte on the proper construction of the contract. Under Rule 56(f),

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“[a]fter giving notice and a reasonable time to respond, the court may (1) grant summary
judgment for a nonmovant; (2) grant the motion on grounds not raised by a party; or (3) consider
summary judgment on its own after identifying for the parties material facts that may not be
genuinely in dispute.” Fed. R. Civ. P. 56(f). “A district court does not abuse its discretion in sua
sponte granting summary judgment so long as the losing party was on notice that it had to come
forward with all of its evidence and had a reasonable opportunity to respond to all the issues to
be considered by the court.” Bennett v. City of Eastpointe, 410 F.3d 810, 816 (6th Cir. 2005)
(internal quotation marks omitted); see also Celotex Corp., 477 U.S. at 326 (“[D]istrict courts are
widely acknowledged to possess the power to enter summary judgment sua sponte, so long as the
opposing party was on notice that it had to come forward with all of its evidence.”). The Court
gives each party notice that it should come forward with all of its evidence related to the proper
construction of the contract’s provisions on leachate.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
CHIEF UNITED STATES DISTRICT JUDGE
Date: July 25, 2018

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