United States District Court, E.D. Louisiana
PROGRESSIVE WASTE SOLUTIONS OF LA, INC.
ST. BERNARD PARISH GOVERNMENT
ORDER & REASONS
the Court is Defendant's motion to strike. R. Doc. 32.
Plaintiff has filed a response in opposition. R. Doc. 33.
After reviewing the parties' briefs and the applicable
law, the Court now issues this Order & Reasons.
case arises out of a contract dispute. Plaintiff Progressive
Waste Solutions of LA, Inc. (“PWS”) is a Delaware
corporation that specializes in solid waste removal. 16-8669,
R. Doc. 1 at 1-2. In early 2006, St. Bernard Parish
Government (“St. Bernard”) issued a Request for
Proposals for Municipal Solid Waste Removal, Curb Side Pick
Up. 16-8669, R. Doc. 1 at 2. SDT Waste & Debris Services,
LLC, (“SDT”) submitted a proposal, and on July
27, 2006, contractually agreed to provide solid waste removal
services to St. Bernard. 16-8669, R. Doc. 1 at 2. On February
7, 2007, SDT entered into a Time Contract with St. Bernard
regarding both curb side pick-up services and dumpster
pick-up services. The Time Contract was set to commence on
January 28, 2008, and terminate on January 27, 2014. 16-8669,
R. Doc. 1 at 3. The Time Contract also provided SDT the
option to extend the agreement through July 26, 2016.
16-8669, R. Doc. 1 at 3.
of 2011, SDT was purchased by IESI LA Corporation, which
included the transfer and assignment of the July 27, 2006
Agreement and the February 7, 2007 Time Contract.
the purported term of the Time Contract extending to at least
January 27, 2014, St. Bernard told IESI that St. Bernard
intended to terminate the contractual relationship. On
December 5, 2011, St. Bernard sought bids for curb side
pick-up services and dumpster pick up services. 16-8669, R.
Doc. 1 at 3-4. On December 8, 2011, IESI filed a Petition for
Temporary Restraining Order, Preliminary and Permanent
Injunction, and Declaratory Judgment in the Thirty-Fourth
Judicial District Court for the Parish of St. Bernard.
16-8669, R. Doc. 1 at 4. The state court issued the
preliminary injunction on December 14, 2011, and enjoined St.
Bernard from requesting proposals for bids for solid waste
collection. 16-8669, R. Doc. 1 at 4. One week later, the
state court enjoined St. Bernard from entering into any new
contract for the services currently being performed by IESI.
16-8669, R. Doc. 1 at 4.
changed its name to Progressive Waste Solutions of LA, Inc.
(“PWS”) on January 12, 2012. In May of 2013, St.
Bernard once again issued Requests for Proposals inviting
vendors to submit proposals for the waste collection services
provided by PWS. 16-8669, R. Doc. 1 at 4. In response, PWS
filed a Motion for Contempt and a Second Supplemental and
Amending Petition for Temporary Restraining Order,
Preliminary and Permanent Injunction and Declaratory Judgment
in state court on May 20, 2013. 16-8669, R. Doc. 1 at 4-5.
The parties resolved their differences before the state court
could rule. St. Bernard agreed to extend the Time Contract
through December 31, 2020. PWS in turn reduced its rates from
$20.00 per household per month to $15.50 per household. R.
Doc. 1 at 5. Two months later, PWS and St. Bernard entered
into a new Time Contract that extended PWS's provision of
solid waste services until December 31, 2020.
19, 2016, St. Bernard wrote to PWS stating that they intended
to unilaterally terminate the solid waste services contract
on July 6, 2016. St. Bernard provided two reasons for the
termination: (1) the St. Bernard Home Rule Charter prohibits
contracts for services not covered by public bid law
exceeding three years; and (2) PWS breached the contract by
missing residential pickups. 16-8669, R. Doc. 1 at 1-7. PWS
filed suit in response, requesting injunctive relief and a
declaratory judgment. 16-8669, R. Doc. 1 at 7-9. PWS also
sought damages for breach of contract, detrimental reliance,
and deprivation of rights under color of law. 16-8669, R.
Doc. 1 at 9-13.
response, St. Bernard filed five counter claims against PWS.
16-8669, R. Doc. 35. In the first of these counterclaims, St.
Bernard alleges a breach of contract claim for overbilling
for the quantity of services performed from August 1, 2006
through December 31, 2012. 16-8669, R. Doc. 35 at 8-9. PWS
seeks indemnification from the SDT Defendants in relation to
the first counterclaim.
October 25, 2016, PWS filed this case against SDT, Inc. and
Sidney D. Torres, IV, (“SDT Defendants”) seeking
a declaratory judgment. No. 16-15830, R. Doc. 1. This case
was originally consolidated with No. 16-8669, Progressive
Waste Solutions of LA, Inc. v. St. Bernard Parish
Government. PWS alleges that at on June 1, 2011 Torres
owned 100% of SDT Waste & Debris Services, LLC
(“SDT Waste & Debris), when IESI LA Corp, now known
as PWS, entered a Purchase Agreement to acquire 100%
ownership of SDT. According to the terms of that Agreement,
SDT and Torres agreed to “indemnify, defend, protect
and hold harmless” IESI or its successors from any
losses, liabilities, or claims, including costs and expenses,
sustained by IESI or a successor corporation as a result of
any intentional misrepresentations or omissions by SDT or
Torres in the Purchase Agreement. R. Doc. 1 at 4. Plaintiffs
allege this included an obligation to defend IESI in any
proceeding that was instituted after June 1, 2011 if those
claims arose out of any period time before June 1, 2011. R.
Doc. 1 at 4.
to Plaintiffs, St. Bernard Parish has a current suit pending
in this Court against PWS as a result of SDT's
overbilling between August 1, 2006 and December 31, 2012.
Specifically, Plaintiffs allege that a dispute between SDT
and St. Bernard arose regarding disposal costs, and while the
SDT Defendants claim this dispute was resolved, St. Bernard
Parish considered litigating these issues, and each party
retained a forensic account in relation to these claims.
Plaintiffs aver they were not notified of this dispute in the
Purchase Agreement. R. Doc. 1 at 6. Further, Plaintiffs claim
St. Bernard and SDT had another dispute regarding the
appropriate number of units SDT should bill St. Bernard. R.
Doc. 1 at 7. Plaintiffs allege that St. Bernard reduced its
payments to SDT, while SDT continued to bill St. Bernard for
the same amounts. The parties never resolved this dispute,
and it was not disclosed to PWS at the time of the purchase.
R. Doc. 1 at 7.
aver that each of the above disputes led to the lawsuit
between PWS and St. Bernard, as St. Bernard seeks to recover
payments made as a result of services SDT did, or did not,
provide prior to June 1, 2011. R. Doc. 1 at 8. Further,
Plaintiffs allege that Torres' threats of a lawsuit
against Mr. Taffaro, St. Bernard Parish President, constitute
a threat to institute a claim, as contemplated in the
Purchase Agreement. R. Doc. 1 at 9. Because PWS was not
notified of these potential claims and suits at the time of
the sale, it now seeks a declaratory judgment it is entitled
to indemnification and defense costs for the portion of the
St. Bernard counterclaim that arises from the actions of the
SDT Defendants prior to June 1, 2011. R. Doc. 1 at 10. PWS
submitted a demand letter to SDT reflecting such, and SDT
responded that even if the claims fell within the terms of
the indemnification provision, that provision expired four
years after the sales date, and thus the indemnification
provision no longer applies. R. Doc. 1-6. However, SDT agreed
that if the St. Bernard claims are covered by Section 9.7 of
the Purchase Agreement, which sets out SDT's ongoing duty
to defend, than SDT would provide a defense-but not
indemnification-for the relevant counterclaim. SDT explained
it had retained counsel to coordinate this defense. R. Doc.
1-6 at 2.
argues that the temporal limitations do not apply to the
indemnification agreement, and seeks a declaratory judgment
from this Court as to its rights to defense and
indemnification under the terms of the agreement. R. Doc. 1
at 13. Plaintiffs also seek attorney fees. R. Doc. 1 at 14.
April 12, 2017, the Court held that Section 9.7 of the
Purchase Agreement does not include a duty to indemnify. R.
Doc. 119. The Court also held that if Defendants knew about
the potential claims at the time of the agreement “and
failed to disclose them to PWS, the four-year time limit
would not apply, and PWS would be entitled to indemnity under
Section 9.1.” R. Doc. 119 at 15. Therefore, the present
motion relates to the issue of whether Defendants knew about
the potentials ...