County of Benton v. H&W Environmental Services and Waste Managment Inc. of Tennessee

Citation: Not availableDocket: 02A01-9802-CH-00040

Court: Court of Appeals of Tennessee; December 1, 1998; Tennessee; State Appellate Court

Original Court Document: View Document

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Benton County appeals the Chancery Court's decision granting summary judgment to H. W Environmental Services, Inc. (H&W) and Waste Management, Inc. of Tennessee, while denying summary judgment to Benton County. The case involves the West Camden Sanitary Landfill, operated under a contract between H&W and Waste Management. A Host Fee Agreement, approved by the Benton County Commission in December 1992, allows Benton County to dispose of "county waste material" at the Landfill for twenty years, starting in August 1993. The agreement specifies that for the first ten years, disposal of up to 75 tons of waste per day is free, while in the subsequent ten years, a tipping fee of $12.00 per ton applies. Additionally, H&W agrees to pay Benton County $1 per ton for out-of-county waste accepted during the last ten years. The contract stipulates that these fees constitute all host fees and surcharges the County may levy against H&W, with provisions for automatic fee increases in response to state or federal surcharges. The court affirms the trial court’s decision, supporting the summary judgment in favor of the defendants.

The Agreement is deemed the complete understanding between the parties, subject to modification only through written consent. On February 21, 1995, Benton County enacted Resolution No. 02-21-23, imposing a surcharge on municipal solid waste received, which is to be periodically reviewed and adjusted to cover related expenditures. Revenue from this surcharge is designated solely for solid waste management, segregated from the general fund, and collected by the landfill operator before waste disposal, then remitted to the county clerk.

On April 18, 1995, H&W and Waste Management notified Benton County that they considered the resolution unlawful and intended not to comply with the surcharge requirement. Benton County subsequently filed a complaint for a declaratory judgment on the resolution's validity. H&W and Waste Management sought summary judgment, arguing the resolution violated the Host Fee Agreement and statutory authorization for surcharges. Benton County also moved for summary judgment, asserting that Tennessee Code Annotated section 68-211-835 authorized the surcharge and did not breach the Host Fee Agreement.

The trial court ruled the resolution did not meet statutory requirements for a surcharge, rendering it unenforceable, and granted summary judgment in favor of H&W and Waste Management, denying Benton County’s motion. Benton County appealed, raising issues concerning its authority under subsections (e), (f), and (g) of Tennessee Code Annotated section 68-211-835 and potential violations of the Host Fee Agreement. The appellate review is de novo, as the trial court's decision was based solely on legal questions. The Solid Waste Management Act of 1991 regulates fees and surcharges related to municipal solid waste.

Local governments are restricted in how they can use proceeds collected under certain regulations. The primary issue is whether the Resolution complies with section 68-211-835, necessitating adherence to statutory construction principles that prioritize legislative intent without misapplying the statute's provisions. When a statute's language is clear, it is assumed that the legislature intended its exact wording. 

Subsection (e) of section 68-211-835 allows a host county of a solid waste disposal facility that serves multiple counties in a region to impose a surcharge on municipal solid waste received at that facility. The revenue from this surcharge must be allocated for solid waste management or to offset costs incurred by municipalities within the host county as a result of the facility's operation. However, the language of subsection (e) is explicitly limited to multi-county solid waste regions. Benton County, being a single-county region without any neighboring counties in the same municipal solid waste region, does not qualify under this provision. Consequently, the surcharge authorized by the Resolution is not permissible under subsection (e).

Subsection (f) further allows counties, municipalities, or solid waste authorities to impose a surcharge on municipal waste received for solid waste collection or disposal purposes, but this provision's applicability must also be evaluated in context.

The surcharge authorized under subsection (f) is intended solely for solid waste collection or disposal. Benton County’s Resolution broadens this intent by allowing revenue from the surcharge to be used for solid waste management purposes or to offset impaired costs. This language mirrors subsection (e), which permits expenditures for solid waste management and offsetting costs related to hosting a disposal facility. However, subsection (e) does not authorize the surcharge, raising the question of whether the Resolution's broader language complies with subsection (f)’s specific limitations. The court concludes that while collection and disposal are part of solid waste management, the phrase "waste management purposes, or for purposes related to off-setting cost impaired" is broader than the terms used in subsection (f). The court emphasizes that legislative intent must be respected, with every term having purpose and meaning, and thus finds that the Resolution does not align with subsection (f)’s requirements. Consequently, subsection (f) does not authorize the Resolution as it stands, although Benton County could enact a new resolution that complies. Additionally, subsection (g) allows for the imposition of a solid waste disposal fee to be used for maintaining collection and disposal services, but does not permit surcharges on services provided by private entities. Both fees and surcharges serve to regulate activities or cover service costs, yet they have distinct meanings within the context of the statute.

The term 'surcharge' in the statute applies when the service is provided by a county or a private entity, while 'fee' refers to charges aimed at covering the county's direct costs for services rendered. Specifically, a tipping fee can only be imposed if the county owns the waste disposal facility, and a solid waste disposal fee is intended for the county to establish and maintain services, with the fee amount needing to reasonably relate to service costs. Subsection (g) does not permit a surcharge for services provided by a private entity, thus Benton County’s Resolution imposing such a surcharge is unauthorized under Tennessee Code Annotated section 69-211-835. The trial court correctly granted summary judgment in favor of H&W and Waste Management and denied Benton County’s motion based on this interpretation.

Additionally, the Tennessee Constitution prohibits retrospective laws that impair contract obligations. The Solid Waste Management Act of 1991 reinforces this by stating that solid waste authorities cannot impair existing contractual obligations. The Host Fee Agreement, entered prior to Benton County’s waste region plan approval, vested H&W’s rights, making the Resolution invalid if it contravenes those rights or Benton County's obligations. The Host Fee Agreement specified tipping fees and a one-dollar surcharge for out-of-county waste, establishing that these constituted all fees levied against H&W. However, the Resolution introduced an additional surcharge for municipal solid waste disposal, which H&W and Waste Management argue violates the Host Fee Agreement. Benton County contends that the surcharge is not directly levied against H&W but rather against the disposer of the waste, to be collected by Waste Management.

Summary judgment is appropriate only when there are no disputes over basic material facts; it is improper if different conclusions may arise from those facts. In cases of ambiguity, any doubt should favor the nonmovant. Written contracts are interpreted as law when clear, but a fact-finder must establish intent regarding ambiguous terms. The analysis of a surcharge by Waste Management indicates that a reasonable fact-finder might see it as affecting both the disposer and H&W, creating indirect costs impacting H&W’s business. The phrase "levied against [H&W] or the Landfill" is deemed ambiguous, necessitating a fact-finder to interpret intent. Therefore, summary judgment for either party on this basis was not justified, leading to the affirmation of the trial court's denial of summary judgment to Benton County. The disposition of the summary judgment motions is affirmed, and costs of the appeal are assigned to Benton County.