Wolf Creek Landfill, LLC v. Twiggs County, Georgia , 337 Ga. App. 211 ( 2016 )

FIFTH DIVISION
PHIPPS, P. J.,
DILLARD and PETERSON, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
May 25, 2016
In the Court of Appeals of Georgia
A16A0534. WOLF CREEK LANDFILL, LLC v. TWIGGS
COUNTY.
PHIPPS, Presiding Judge.
Following the grant of its application for interlocutory review, Wolf Creek
Landfill, LLC (“Wolf Creek”) appeals from the denial of its motion to dismiss a
breach of contract action. Wolf Creek contends that the six-year statute of limitation
for breach of contract actions barred the action filed against it by Twiggs County,
Georgia (“the County”) and that the trial court erred in concluding that an anti-waiver
clause in the parties’ agreement allowed the County to proceed on its claims. Because
the anti-waiver clause applies to “provisions” of the contract and not to claims arising
from breach thereof, we reverse the denial of Wolf Creek’s motion to dismiss.
We review a trial court’s ruling on a motion to dismiss de novo.1 “Our role is
to determine whether the allegations of the complaint, when construed in the light
most favorable to the plaintiff, and with all doubts resolved in the plaintiff’s favor,
disclose with certainty that the plaintiff would not be entitled to relief under any state
of provable facts.”2
On or about July 8, 2005, the County, along with Wilkinson County, sold to
Wolf Creek a landfill that was located in the County. As a condition of closing, the
parties also entered into a Landfill Operating Agreement (the “Agreement”). The
County’s complaint, which was filed on March 6, 2015, arises out of Wolf Creek’s
alleged breach of the Agreement.
Wolf Creek answered the complaint and filed a motion to dismiss under OCGA
§§ 9-11-12 (b) (6) and 9-3-24 for failure to state a claim upon which relief could be
granted, arguing that the County’s claims were barred by the six-year statute of
limitation governing breach of contract. The County replied that the Agreement
extended the limitation period for the permitted life of the landfill.
1
Sanders v. Trinity Universal Ins. Co., 285 Ga. App. 705, 706 (647 SE2d 388)
(2007).
2
Id. (punctuation and footnote omitted).
2
The trial court denied Wolf Creek’s motion to dismiss, concluding that Section
18 of the Agreement allowed the County to proceed on its claims. Wolf Creek
appeals.
1. Wolf Creek argues that the applicable statute of limitation bars the County’s
breach of contract claims. The County responds that the parties agreed to waive the
benefit of the statute of limitation during the term of the Agreement and that any
ambiguity in the contract should be construed against Wolf Creek, as the drafter of
the agreement.
Section 11 of the Agreement (“Expansion Fee”) provided that Wolf Creek
would pay the County for each cubic yard of expansion of the landfill, upon receipt
of a non-appealable expansion permit from the Georgia Department of Natural
Resources (“DNR”). Section 9 of the Agreement provided that upon accepting
municipal solid waste in the landfill from sources other than Twiggs or Wikinson
County, Wolf Creek would pay the County a quarterly host fee based upon the
tonnage of waste received (but no less than $135,000 per year).
According to the complaint, Wolf Creek breached Section 11 of the Agreement
on January 28, 2007, when it failed to pay the expansion fee of $330,152.55 upon
receipt of a non-appealable permit from the Georgia DNR which almost doubled the
3
volume of the landfill. The County also alleged that Wolf Creek breached the
Agreement by underpaying quarterly host fees for the years 2006 (by $27,525) and
2007 (by $2,457).3
Under Georgia law, “[a]ll actions upon simple contracts in writing shall be
brought within six years after the same become due and payable.”4 This statute of
limitation begins to run at the time the alleged breach of contract occurs, not at a later
time when damages are alleged to result or are discovered.5
Because quarterly host fees were due within 30 days of the end of each
calendar quarter, any fees for 2006 and 2007 would have been due no later than
January 2008, more than six years before the County filed suit. As the complaint
alleged, the expansion fee was due in January 2007, 30 days after the expansion
3
The complaint also alleged that Wolf Creek underpaid 2010 quarterly host
fees (by $344). In its motion to dismiss the complaint below, Wolf Creek
acknowledged that the alleged breach in failing to pay 2010 host fees fell within the
limitation period and did not seek dismissal of this claim in its motion. We thus do
not address this claim.
4
OCGA § 9-3-24.
5
Hamburger v. PFM Capital Mgmt., 286 Ga. App. 382, 385 (1) (649 SE2d
779) (2007).
4
permit was issued. Thus, the six-year statute of limitations barred the County’s claims
unless the parties agreed otherwise.
The Agreement provides in relevant part:
8. Term. The term of this Agreement (the “Term”) shall commence on
the Effective Date [July 5, 2005] and shall continue in full force and
effect for the permitted life of the Acquired Landfill and all future
expansions thereof.
...
18. Waiver. Failure to enforce any provision hereof shall not constitute
a waiver by either party and any such provision shall remain in full force
and effect and may be asserted by either party at any time during the
period of this Agreement.
The record does not reveal the permitted life of the landfill. The “Expansion
Fee” section, however, provides that if the capacity of the landfill is increased “by not
less than five million cubic yards, then the term of this Agreement shall thereby be
extended for an additional twenty (20) year term.” Because the complaint alleges that
the expansion increased the volume of the Acquired Landfill by 6.6 million cubic
yards, we can infer that the term is at least twenty years.
Georgia appellate courts have not addressed whether an anti-waiver provision,
such as the one in Section 18, indicates an intent to waive or extend the statutory
5
limitation period for breach of contract. While some states have statutory6 or judicial7
restrictions prohibiting or limiting contractual extensions of statutes of limitation,
Georgia does not.8 Although we typically are called upon to interpret a shortening
6
See Miss. Code Ann. § 15-1-5 (“The limitations prescribed in this chapter
shall not be changed in any way whatsoever by contract between parties, and any
change in such limitations made by any contracts stipulation whatsoever shall be
absolutely null and void, the object of this section being to make the period of
limitations for the various causes of action the same for all litigants.”); N.Y. Gen.
Oblig. Law § 17-103 (3) (“A promise to waive, to extend, or not to plead the statute
of limitation has no effect to extend the time limited by statute for commencement of
an action or proceeding for any greater time or in any other manner than that provided
in this section, or unless made as provided in this section.”). See also Amu v. Barnes,
283 Ga. 549, 553 (662 SE2d 113) (2008) (“Prescribing periods of limitation is a
legislative, not a judicial, function.”) (citation and punctuation omitted).
7
See Haggerty v. Williams, 855 A2d 264, 268-269 (Conn. App. 2004)
(collecting cases regarding enforceability of permanent waiver of statutes of
limitation at the inception of the original contract).
8
See Gen. Elec. Credit Corp. v. Home Indem. Co., 168 Ga. App. 344, 346 (309
SE2d 152) (1983) (“Georgia has no statute preventing parties from contracting to
limit the time within which an action on an insurance policy may be brought.”).
6
(rather than an extension) of the statute of limitation,9 we have stated that
“[c]ontractual periods of limitation are generally enforceable under Georgia law.”10
In this regard, the County primarily relies on a case from 1898, in which our
Supreme Court stated: “As the law may prescribe such a limitation in which actions
shall be brought by the party to be affected, it is also within the power of the
contracting parties to agree among themselves upon a period of time which would
amount to a statute of limitations, either greater or less than the period fixed by the
law.”11 We need not decide whether Georgia law allows parties to contractually
extend or waive completely the statute of limitation, however, as the anti-waiver
provision in this case did neither.
9
See, e.g., Rabey Elec. Co. v. Housing Auth. of Savannah, 190 Ga. App. 89, 90
(2) (378 SE2d 169) (1989) (“While the statute of limitation for actions on simple
contracts in writing is six years, . . . the Georgia courts have permitted parties to
contract as to a lesser time limit within which an action may be brought so long as the
period fixed be not so unreasonable as to raise a presumption of imposition or undue
advantage in some way.”) (punctuation and citations omitted).
10
N4D, LLC v. Passmore, 329 Ga. App. 565, 566 (1) (765 SE2d 717) (2014)
(punctuation and citation omitted).
11
Mass. Beneficial Life Assn. v. Robinson, 104 Ga. 256, 272 (30 S.E. 918)
(1898) (citations omitted and emphasis added).
7
“The cardinal rule of [contract] construction is to ascertain the intention of the
parties. If that intention is clear and it contravenes no rule of law and sufficient words
are used to arrive at the intention, it shall be enforced irrespective of all technical or
arbitrary rules of construction.”12 “A contract . . . must be read reasonably, in its
entirety, and in a way that does not lead to an absurd result.”13 In addition, we will not
infer waiver of an important right unless the waiver is clear and unmistakable.14
“Parties may stipulate for other legal principles to govern their contractual
relationship than those prescribed by law; however, these must be expressly stated in
the contract.”15
The anti-waiver clause in the Agreement applied when a party failed to enforce
one of its provisions. In such event, the party may still assert such provision, which
remains in full force and effect. “Under Georgia law, words in a contract generally
12
OCGA § 13-2-3.
13
Office Depot v. Dist. at Howell Mill, LLC, 309 Ga. App. 525, 530 (2) (710
SE2d 685) (2011) (citation omitted).
14
Accurate Printers v. Stark, 295 Ga. App. 172, 177 (1) (671 SE2d 228)
(2008).
15
Jenkins v. Morgan, 100 Ga. App. 561, 562 (1) (112 SE2d 23) (1959).
8
bear their usual and common meaning and the usual and common meaning of a word
may be supplied by common dictionaries.”16
A “provision” is defined as: “1. A clause in a statute, contract, or other legal
instrument. 2. A stipulation made beforehand.”17 An “action,” on the other hand, is
statutorily defined as “the judicial means of enforcing a right.”18 A “‘civil action’
means an action founded on private rights, arising either from contract or tort.”19
Construing the contract as a whole, we find only one reasonable interpretation
of the anti-waiver clause in the Agreement.20 The clause would allow a party to
require strict compliance with a contract provision going forward, despite its failure
16
King v. GenOn Energy Holdings, 323 Ga. App. 451, 455 (2) (747 SE2d 15)
(2013).
17
Black’s Law Dictionary, p. 1345 (9th ed. 2009).
18
OCGA § 9-2-1 (1).
19
OCGA § 9-2-1 (2).
20
See Nebo Ventures, LLC v. NovaPro Risk Solutions, L.P., 324 Ga. App. 836,
844 (4) (752 SE2d 18) (2013) (“[N]o ambiguity exists where, examining the contract
as a whole and affording the words used therein their plain and ordinary meaning, the
contract is capable of only one reasonable interpretation.”) (citation and punctuation
omitted); Office Depot, supra at 529-530 (2) (“[A] contract is not ambiguous, even
though difficult to construe, unless and until an application of the pertinent rules of
interpretation leaves it uncertain as to which of two or more possible meanings
represents the true intention of the parties.”) (punctuation and citations omitted).
9
to do so previously. Under the facts of this case, for example, the anti-waiver clause
would allow the County to demand strict compliance with Wolf Creek’s obligation
to pay future quarterly host fees, despite its failure to do so in the past.21
A statute of limitation, on the other hand,
has as its purpose the limiting of the time period in which an action may
be brought, thereby providing a date certain after which potential
defendants can no longer be held liable for claims brought on such
actions. It is a procedural rule limiting the time in which a party may
bring an action for a right which has already accrued.”22
While the anti-waiver clause applies to “provisions” in the Agreement, the statute of
limitation applies to the parties’ rights to bring a civil action to remedy an alleged
breach of those provisions.23
21
See, e.g., Glimcher Properties v. Bi-Lo, LLC, 271 Ga. App. 322, 324 (1) (609
SE2d 707) (2005) (“Here, the evidence shows that the lease contained a valid ‘No
Waiver’ provision, providing that [the tenant’s] failure to exercise any power given
to it under the lease or to insist upon strict compliance with the lease terms in a given
instance did not waive [the tenant’s] right to insist upon strict compliance with the
terms of the lease at a later time.”). But see Smith v. Gen. Finance Corp., 243 Ga.
500, 501 (255 SE2d 14) (1979) (anti-waiver provisions may themselves be waived).
22
Cedartown North Partnership v. Ga. Dept. of Transp., 296 Ga. App. 54, 57
(2) (673 SE2d 562) (2009) (emphasis added, citation and punctuation omitted).
23
Id.
10
The parties, who are presumed to have contracted with reference to the existing
laws and their effect on the subject matter,24 did not express an intent to extend the
six-year statute of limitation.25 We are not at liberty to rewrite a contract while
purporting to construe it.26 Accordingly, we find that the trial court erred in
interpreting the anti-waiver clause to extend the statute of limitation.
2. Because we find that the six-year statute of limitation barred the County’s
claims based on the alleged failure to pay the expansion fee and underpayment of
quarterly host fees for 2006 and 2007, we need not address Wolf Creek’s argument
that a contractual extension of a statute of limitation period would violate public
policy.
Judgment reversed. Dillard and Peterson, JJ., concur.
24
Satterfield v. Southern Regional Health System, 280 Ga. App. 584, 586 (1)
(634 SE2d 530) (2006).
25
Compare N4D, supra at 565 (construing contract provision entitled “Statute
of Limitations,” which provided that “‘No action, regardless of form, arising out of
the services under this Agreement, may be brought by either party more than one year
after the cause of action has accrued, except that an action for nonpayment may be
brought within one year of the date of the last payment.’”).
26
Mull v. Mickey’s Lumber & Supply Co., 218 Ga. App. 343, 346 (2) (461
SE2d 270) (1995).
11