City of Jeffersonville v. Environmental Management Corp.

954 N.E.2d 1000, 2011 Ind. App. LEXIS 1726, 2011 WL 4104927
CourtIndiana Court of Appeals
DecidedSeptember 15, 2011
Docket10A01-1005-PL-217
StatusPublished
Cited by39 cases

This text of 954 N.E.2d 1000 (City of Jeffersonville v. Environmental Management Corp.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Jeffersonville v. Environmental Management Corp., 954 N.E.2d 1000, 2011 Ind. App. LEXIS 1726, 2011 WL 4104927 (Ind. Ct. App. 2011).

Opinion

RILEY, Judge.

STATEMENT OF THE CASE

Appellants-Defendants, the City of Jef-fersonville (Jeffersonville), and the City of Jeffersonville Sanitary Sewer Board (Sewer Board) (collectively, the City), appeal the trial court’s judgment in favor of Ap-pellee-Plaintiff, Environmental Management Corporation (EMC), with respect to EMC’s claims that (1) the City breached its contract with EMC, (2) violated Indiana’s Open Door Law, and (3) acted in contempt of an agreed entry and order.

We affirm in part, reverse in part, and remand.

ISSUES

The City raises six issues on appeal, which we restate as follows:

(1)Whether the trial court erred in finding that the City breached its contract with EMC;
(2) Whether the trial court abused its discretion in excluding documentary evidence;
(3) Whether the trial court erred in finding that the City violated Indiana’s Open Door Law;
(4) Whether the trial court abused its discretion in finding Jeffersonville in contempt of an agreed entry and order;
(5) Whether the trial court abused its discretion in awarding attorney’s fees to EMC for services that were unrelated to the City’s Open Door violations or contempt of court proceedings; and
(6) Whether the trial court erred in ordering the City to reimburse EMC for its costs, including litigation expenses.

On cross-appeal, EMC raises one issue, which we restate as follows: Whether the trial court erred in deducting certain expenses from EMC’s lost profits damage claim.

FACTS AND PROCEDURAL HISTORY

Jeffersonville owns a sanitary sewer collection and treatment system that is operated under the control of the Sewer Board. On May 1, 2004, Jeffersonville entered into a contract with ' EMC (the Contract) through the Sewer Board concerning Jef-fersonville’s sewer system. Among other provisions, EMC agreed to “operate and maintain the [wastewater treatment plant (Plant) ] so that the effluent discharge [would] meet[] or exceedf] the effluent requirements established by the U.S. Environmental Protection Agency [ (EPA) ] and [the Indiana Department of Environmental Management (IDEM) ],” to “operate and maintain the [c]ollection [sjystem in such a manner as to extend its useful life, to provide maximum capacities ... and to prevent public health hazards.” *1004 (Appellant’s Amended App. vol. 1, pp. 33-4). The Contract also required EMC to:

i) [i]dentify sources of problems within the sewer system through inspection, monitoring and investigation, assisting the City’s Engineer and staff with inspection of all new sewer taps and assisting builders in locating existing sewer mains and taps;
ii) [c]lean and maintain sanitary sewers, combined sewers, and [Combined Sewer Overflows (CSOs) ] on a regularly scheduled preventative maintenance basis to ensure that wastewaters are transported to the wastewater treatment facilities in compliance with the [National Pollution Discharge Elimination System (NPDES) ] permit.
iii) [i]nspeet, clean, maintain and repair lift stations on a regularly scheduled preventative maintenance basis as set forth in Appendix F to ensure waste waters are transported to the wastewater treatment facilities in compliance with the NPDES permit.
iv) [p]revent sewage from bypassing to waters of the State and protect the [collection [s]ystem from flooding due to high water, in accordance with the Water Pollution Control Acts Amendments, Public Law 92-500, and the Clean Water Acts Amendment.
v) [e]liminate odors and potential sources of odors to the extent possible and practical based on the generally accepted standards of good practice in municipal wastewater management and operations.
vi) [implement a preventative maintenance program to reduce nuisance stoppages, employing effective electronic information system hardware and software.

(Appellant’s Amended App. vol. 1, pp. 35-6).

Paragraph 5(b) of the Contract gave both parties the right to terminate the Contract prematurely in the event of a material breach or unsatisfactory performance of a material obligation. However, Paragraph 5(b) required the terminating party to first provide written notice of the material breach or unsatisfactory performance to the breaching party, upon which time that party had 90 days to cure its performance. If the breaching party did not cure within 90 days, the terminating party could then terminate the Contract.

Effective December 1, 2006, IDEM issued a NPDES permit to Jeffersonville and EMC, authorizing the Plant to discharge effluent into the Ohio River, Cane Run, and an unnamed drainage ditch in accordance with certain effluent limitations, monitoring requirements, and conditions. The permit was effective until November 30, 2011 and required EMC to submit monthly reports to IDEM.

Also in 2006, the United States Department of Justice (DOJ), the EPA, and IDEM commenced a legal enforcement action against Jeffersonville and EMC, alleging that they had violated the terms of their NPDES permit and the Clean Water Act. The parties began negotiations for a consent decree based on the violations, but did not immediately resolve the issue. In the meantime, Thomas Galligan (Mayor Galligan) was elected Mayor of Jefferson-ville in November of 2008. After his election, but prior to commencement of his term on January 1, 2008, Mayor Galligan held two meetings with representatives of EMC concerning the manner in which EMC was operating and maintaining Jef-fersonville’s sewer system. In these meetings, he expressed concern that some of the sewer system pumps did not work, that sanitary sewer overflow was spilling into people’s yards every time it rained, that EMC did not have an adequate staff, *1005 and that the plant was discharging effluent into the waters of the United States, contrary to EMC’s pending consent decree.

On April 15, 2008, the Sewer Board held a regular meeting that was open to the public. The Sewer Board consisted of three members — Mayor Galligan, Jeffrey Caldwell, and William Saegesser (Saeges-ser). EMC representatives and EMC’s legal counsel also attended the meeting, and at the meeting Mayor Galligan discussed his concerns regarding EMC’s operation of the Plant. He told EMC that he had encountered exposed electrical wires coming out of an electrical unit at the sewer system’s Old Stoner Station, that maintenance levels needed to be improved, that sump pumps needed to be improved, and that manpower was an issue. According to both Mayor Galligan and Saegesser, the Sewer Board instructed its attorney, R. Scott Lewis (Attorney Lewis), to send a written notice letter to EMC informing EMC of its deficient operation and maintenance of the sewer treatment system. Attorney Lewis was also instructed to send a second letter to EMC terminating the Contract if EMC had not corrected the issues within 90 days. This exchange, however, was not recorded in the meeting’s minutes.

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Cite This Page — Counsel Stack

Bluebook (online)
954 N.E.2d 1000, 2011 Ind. App. LEXIS 1726, 2011 WL 4104927, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-jeffersonville-v-environmental-management-corp-indctapp-2011.