IN THE SUPREME COURT OF THE STATE OF KANSAS
No. 88,646
STATE OF KANSAS ex rel. CLYDE D. GRAEBER, SECRETARY OF THE DEPARTMENT OF HEALTH AND ENVIRONMENT,
Plaintiff/Appellee,
v.
MARION COUNTY LANDFILL, INC.,
Defendant/Appellee,
and
THE BOARD OF COUNTY COMMISSIONERS OF
THE COUNTY OF MARION, KANSAS,
Defendant/Appellant.
SYLLABUS BY THE COURT
1. It is a fundamental rule of statutory construction, to which all other rules are subordinate, that the intent of the legislature governs if that intent can be ascertained. The legislature is presumed to have expressed its intent through the language of the statutory scheme it enacted. When a statute is plain and unambiguous, the court must give effect to the intention of the legislature as expressed, rather than determine what the law should or should not be. Stated another way, when a statute is plain and unambiguous, the appellate courts will not speculate as to the legislative intent behind it and will not read such a statute so as to add something not readily found in the statute.
2. Pursuant to K.S.A. 65-3418(a), title to the solid waste that is not collected, processed, or disposed of in accordance with solid waste provisions of the statute and the regulations thereunder and that is produced from a discrete source, remains the property of the generator and the generator is liable for removal of the waste, restoration of the area in which the waste was disposed, and the provision for lawful disposal of the waste.
3. Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. On appeal, the appellate court applies the same rules, and where reasonable minds could differ as to the conclusions drawn from the evidence, summary judgment must be denied.
4. A public nuisance is an unreasonable interference with a right common to the general public, such as a condition dangerous to health, offensive to community moral standards, or unlawfully obstructing the public in the free use of public property. A public nuisance is one which annoys an entire community. The finding of a nuisance depends on numerous factors such as the type of neighborhood; the nature of the thing or wrong complained of; its proximity to those alleging injury or damage; its frequency, continuity, or duration; and the damage or annoyance resulting, and each case must necessarily depend on its particular facts and circumstances.
5. Given a county's numerous guaranties of financial assurance for the closure and postclosure operations of a landfill, including (1) a letter from a county commissioner representing the majority of the county commission, (2) a journal entry from a civil case ordering the county to guarantee the closure and postclosure operations, (3) a contract provision with the landfill operator obligating the county to guarantee the closure and postclosure operations, (4) and a written guaranty sent to the State, it is held that the district court correctly found the county liable as guarantor for the closure and postclosure operations of the landfill.
6. According to K.S.A. 60-219(a), a party shall be joined if complete relief cannot be accorded in its absence among those already parties. The appellate court reviews the district court's failure to join a party pursuant to K.S.A. 60-219(a) with an abuse of discretion standard of review.
Appeal from Marion district court, STEVEN L. HORNBAKER, judge. Opinion filed September 19, 2003. Affirmed in part, reversed in part, and remanded with directions.
J. Steven Pigg, of Fisher, Patterson, Sayler & Smith, L.L.P., of Topeka, argued the cause and was on the briefs for defendant/appellant.
Russell L. Mills, of Derby, argued the cause and was on the brief for defendant/appellee.
William L. Anderson, of Topeka, argued the cause and was on the brief for plaintiff/appellee.
The opinion of the court was delivered by
DAVIS, J.: The Kansas Department of Health and Environment (KDHE) filed suit against Marion County Landfill, Inc., (MCLI) to enforce its administrative order which required MCLI to cease its landfill operation in Marion County and to perform closure and postclosure operations. The KDHE joined the Board of County Commissioners of the County of Marion, Kansas, (County) under alternative theories that the County was liable for the closure and postclosure operations by statute and as guarantor for MCLI's performance. The KDHE settled with MCLI and moved for summary judgment against the County, which the district court granted. The County appealed. We affirm in part, reverse in part, and remand for further proceedings.
Facts
Tom Grosse operated a landfill in Marion County, Kansas, located in the southwest quarter, section 14, township 20 south, range 3 east under KDHE permit 158 dated March 17, 1976. The original permit covered the entire quarter section, although Tom Grosse owned only the west 80 acres, the site of the actual landfill. His nephew, Jack Grosse, owned the east 80 acres of the quarter section. At the time the KDHE permit was granted, it was not necessary that the permit holder own the property upon which the landfill was to operate. The KDHE permit for operation of the landfill was personal and expired with the death of the holder.
Tom Grosse died June 11, 1993. His surviving spouse, Mary Lou Hoberecht, and his four children, William Grosse, Candice Green, Stephen Grosse, and William Grosse continued to operate the landfill without a permit. Together they formed a corporation, MCLI, on October 20, 1993. MCLI distributed 80 shares of its stock to Tom Grosse's heirs in exchange for the west 80-acre tract and four pieces of equipment essential to the operation of the landfill. Mary Lou received 40 shares and each of the children received 10 shares. On June 1, 1996, Mary Lou gave each of the children 10 shares, leaving the four children as the only shareholders, each with 20 shares. Following the death of Tom Grosse, MCLI applied for a temporary permit to operate the landfill and was eventually granted a temporary permit from the KDHE on June 11, 1996. MCLI operated the landfill from 1993 until it closed on October 9, 1996.
MCLI transferred the west 80 acres, with the exception of the 30 acres containing the landfill cells, to M.S.W., Inc., (MSW) a corporation operated by MCLI's attorney. Jack Grosse transferred the east 80 acres to the heirs of Tom Grosse, who subsequently transferred them to MSW.
Before Tom Grosse's death, the KDHE urged Marion County to support closure of the landfill. On February 10, 1992, Charles DeForest, chairperson of the County Commission, moved that the County "guarantee the closure of two or three acres as the operator, Tommy Grosse, has given a commitment to bring the closure up to date." The minutes further note that the "[County] will guarantee the closure of any additional acreage necessary." County Commission minutes reflect that Linn "recommended a Letter of Resolution or guarantee from [the County] to commit funds to close the last acre or two; suggested that $7,500 would be sufficient." On February 13, 1992, DeForest sent a letter to the KDHE regarding the guaranty stating that "[t]he enclosed copies of the minutes of that meeting are intended to convey our guarantee that the landfill will meet [KDHE's] current closure and post closure fund regulations and allow for the landfill permit renewal."
Following Tom Grosse's death in 1993, Charles Linn of the KDHE reported to the County that improvements needed to be made at the landfill and that the County needed to watch the landfill closer. Linn advised "that a commitment was needed from the County for closure funds," and "that the post closure and operation maintenance fund was Grosse's responsibility." That same year, William Grosse and Stephen Grosse, doing business as MCLI, filed a lawsuit against the County. The record does not indicate the nature of this action. However, the record does contain a journal entry, filed August 31, 1994, and approved by counsel for the parties, which provided:
"THEREUPON counsel for the Petitioners and the Respondent announce to the Court that they have agreed to dismiss this case without prejudice and that the parties have entered into a settlement of their differences such that the [County] shall be responsible for providing financial assurance for the closure of the Marion County Landfill and pay for post closure costs."
On February 7, 1994, the County was briefed by the KDHE on the regulations surrounding the operation of the landfill. The KDHE advised the County that after April 9, 1994, additional regulations will be imposed which the County should consider before continuing with its present site. The KDHE
"recommend[s] closing now if you find any problems that will cause problems later as corrective action is very costly and not feasible for small counties. The Operation Plan is 60% to 70% of operating costs. If landfill runs past April 9, 1994, you must be prepared to accept the financial costs for bonds to meet the financial costs or need to put money aside now."
The record does not contain specific information regarding the impact of the above regulations, but it is clear that the County was aware the continued operation of the landfill beyond April 9, 1994, would involve a substantial increase in cost.
Approximately 8 months later, on December 12, 1994, the County entered into an agreement with MCLI in order to extend the operation of the landfill until October 8, 1996. In order to satisfy the KDHE and assure the continued operation of the landfill, the County guaranteed closure and postclosure costs. MCLI agreed to accept the primary responsibility for the closure and postclosure costs. Among many other contractual provisions discussed below, the contract provided that any transfer of the landfill property would be subject to the County's rights under the contract. The evidence establishes that the KDHE would not have authorized the continued operation of the landfill without the County's guaranty.
Beginning in October 1995 and extending through June 1996, in a series of letters sent by the County to MCLI, the County claimed that MCLI had breached its contractual obligations to the County by failing to secure a permit from the KDHE for continued operation of the landfill and by attempting to transfer the landfill property to Browning-Ferris Industries of Kansas (BFI). Throughout this time, MCLI denied any breach of the contract.
On May 31, 1996, the County commissioners signed another separate written guaranty for the closure and postclosure procedures as required by the KDHE in the event MCLI could not perform those procedures. On September 30, 1996, the KDHE, in a letter sent to MCLI and the County, approved the County's guaranty agreement. On October 7, 1996, the County again claimed that it was no longer bound by its guarantee for the closure and postclosure of the landfill because MCLI breached its obligations under its December 12, 1994, agreement with the County, which entitled the County under its May 31, 1996, guaranty to cancel its guarantee. The County also claimed that MCLI's failure to comply with the preclosure requirements effectively relieved the County of its guaranty.
Herbert Bartel, County Zoning Administrator, explained in his deposition that the May 31, 1996, guaranty was made because the County needed a place to put its waste. Linda Peterson, commissioner and signatory of the guaranty, agreed in her deposition that the KDHE's permission to operate the landfill until October 9, 1996, was valuable consideration for the County's guaranty.
On June 11, 1996, the KDHE issued its order permitting MCLI to operate the landfill until October 9, 1996. The enforcement of this order forms the basis of the present lawsuit. The order required MCLI to perform clean-up and closure procedures. The KDHE ordered MCLI to submit a closure and postclosure plan that complied with statutes and regulations within 30 days of the order. Further, the KDHE ordered MCLI, its agents, or its assigns to implement the plan as approved by the KDHE. The KDHE ordered MCLI to file a restrictive covenant in a form approved by the KDHE.
MCLI filed the restrictive covenant on July 3, 1996. The covenant restricted the use of the west 80 acres to use as a landfill. The covenant required all future land uses to be "conducted in a manner which will protect and preserve the integrity of the environment and all waste containment and monitoring systems designed, installed, and operated during operation of the disposal areas or during the postclosure period," and required the KDHE's approval for all improvements to the property. The covenant granted the KDHE an easement to enter the property to perform work and monitoring of the closure plan. The covenant specified that any conveyance of the property must disclose all requirements of the long term care of the property. The covenant also specified that the terms would run with the land and bind any future party acquiring rights to the property.
On October 9, 1996, the landfill closed. William Grosse testified in his deposition that 99% of the waste in the landfill at that point had come from Marion County citizens. Stephen Grosse testified in his deposition that an engineering firm estimated the cost of closure to be $631,000. The district court found that the closure and postclosure costs exceeded $650,000. Stephen Grosse testified that he understood that, shortly after the closure of the landfill, the projected closure and postclosure costs exceeded $500,000.
After MCLI entered into the 1994 agreement wherein it accepted primary responsibility for closure and postclosure costs, and during the years of 1995 and 1996 with closure of the landfill eminent, MCLI made the following cash distributions to its shareholders amounting to $14,000 in 1995 and $70,000 in 1996:
| Date |
Amount |
| 1995 |
$14,000 |
| March 15, 1996 |
$16,000 |
| May 10, 1996 |
$5,600 |
| July 15, 1996 |
$2,800 |
| September 15, 1996 |
$5,600 |
| October 12, 1996 |
$40,000 |
In July 1997, the KDHE warned MCLI that it had failed to comply with closure requirements. The KDHE warning letter noted evidence of erosion, the need for seeding and mulching, insufficient grading, the failure to label water monitoring wells, and insufficient final cover. The KDHE warned that if the "site does not receive adequate final cover soon, the potential for ground water contamination is much more likely to occur."
During March 1998, MCLI transferred the west 80 acres, minus a core 30-acre tract containing the landfill cells, to MSW. William Grosse explained the transfer in his deposition testimony:
"Q. Why did you decide as an officer of MCLI to enter a contract with MSW to sell part of the 160 acres?
"A. Well, we needed legal representation, and really we were kind of in the river without any oars and the boat's sinking, and we had to have some help and we were broke and I knew Russell Mills' family had a transfer station facility in Derby. In fact, we'd dealt with Russell in the past on other litigations and stuff. And so I asked him for his help, 'cause we needed legal help, as you very well can see, so that's how we got involved with them."
William also explained that the shareholders of MCLI were hired by MSW as consultants on landfill matters and would receive $1 per ton if MSW "get[s] the landfill reopened." Mary Lou, William, Stephen, Amy, and Candace, in their individual capacities, acquired the east 80 acres from Jack and Sharon Grosse on March 30, 1995. They transferred the east 80 acres to MSW, thus leaving MSW with 130 acres of the original quarter section and MCLI with the 30 acres containing the landfill cells which are the subject of the KDHE's closure order.
MSW attempted to obtain a permit to operate a landfill on the acreage it owned, which would be a continuation of the landfill previously operated by MCLI on its 30 acres. However, the Marion County Board of Zoning Appeals (Board) denied a conditional use permit for a landfill and denied MSW's attempts to receive certification for the operation of a landfill at that site. MSW appealed to the district court, which upheld the Board's decision. Upon appeal, the district court decision was affirmed by the Court of Appeals. See M.S.W. Inc. v. Marion County Bd. Of Zoning Appeals, 29 Kan. App. 2d 139, 24 P.3d 175 (2001).
On April 9, 1998, the KDHE filed the present action against MCLI seeking to enforce its June 6, 1996, order. Almost 2 years later, on February 8, 2000, the KDHE filed an amended petition against the County, alleging that the County was responsible for the closure and postclosure operations of the landfill. The KDHE alleged that the County was liable for closure and postclosure of the landfill for the following reasons: (1) Pursuant to K.S.A. 65-3418, the County was the generator of the waste which was deposited at an illegal site and, therefore, title to the waste remained with the County; (2) the County, through its contract, guaranteed on December 12, 1994, the closure and postclosure of the site; (3) the County guaranteed the closure and postclosure in a 1992 letter from a county commissioner upon which the KDHE relied; (4) the County is liable because of the statutory requirements put on counties to adopt and implement a solid waste management plan pursuant to K.S.A. 65-3405; and (5) the site is a public nuisance which the County was responsible for abating.
In its original petition, the KDHE sought injunctive relief to stop the transfer of land from MCLI to MSW until the closure and postclosure obligations were fulfilled. The court refused to grant this injunction, explaining that "[t]he Court cannot and will not issue an injunction prohibiting the transfer of land that was lawfully transferred before suit was filed." However, after the County was joined, the district court revisited the matter and explained that its previous ruling on the injunction was based on the assumption that the April 2, 1998, deed was a valid deed. Upon reconsideration, the district court, in a journal entry filed on February 22, 2000, ruled that the deed transferring the west 80-acre tract from MCLI to MSW was void as to the KDHE based upon a defective legal description:
"It has now been determined that this deed had a defective legal description. The contractual relationship between MCLI and [MSW] is still valid. However, as to plaintiff KDHE, the deed of April 2, 1998, is ineffective. The Court therefore sustains plaintiff's motion and vacates the order of partial summary judgment."
Stephen Grosse testified that on May 1, 2001, MCLI's remaining assets amounted to a "closure fund" containing $1,061. The County and the KDHE attempted to join MCLI shareholders and MSW. The KDHE, in a motion filed on September 4, 2001, asserted on behalf of itself and the County that MCLI's transfer of land to MSW was done to avoid the cost of closure and postclosure. The KDHE also asserted that the shareholders should be joined not only as shareholders of MCLI but as owners of the east 80 acres which was used for operation of the landfill and was an important part of the permitted landfill. The KDHE alleged that MSW would have been aware of MCLI's responsibilities of closure and postclosure. The district court refused to join MSW and the MCLI shareholders, and ruled that the statute of limitations had run as to MSW and that K.S.A. 17-7101(b) required a judgment against the corporation before its shareholders could be liable.
Before the district court filed its journal entry refusing injunctive relief and refusing to join MSW and the MCLI shareholders, the KDHE entered into negotiations with MCLI and MSW concerning closure of the landfill. While MSW had not been a party to this action, MSW joined the action and consented to jurisdiction in order to obligate itself to perform the terms of the agreement between the parties and the corresponding journal entry. However, MSW, by entering its appearance, subjected itself to the jurisdiction of the court for any and all actions regarding this case. See Aguilera v. Corkill, 201 Kan. 33, 38, 439 P.2d 93 (1968) ("A party is not permitted to invoke the jurisdiction and power of a court for the purpose of securing important rights from an adversary through its judgment, and then, after obtaining the benefits sought, to repudiate or question the validity of that jurisdiction on the ground the court was without jurisdiction.").
During the hearing on the KDHE's motion for summary judgment as to the County, MCLI's attorney admitted that MCLI was primarily responsible for closure and postclosure of the landfill and that if judgment was entered in favor of the KDHE against the County, MCLI must indemnify the County. On November 9, 2001, the district court granted KDHE summary judgment against the County based upon the following stated reasons:
"a. Marion County is statutorily responsible for cleanup of solid waste that it generated.
"b. That the dump site . . . now constitutes a 'public nuisance'
"c. Marion County is responsible for cleanup because of the numerous guarantees it made to provide for closure and post closure assurance."
Thereafter, in response to motions to alter its summary judgment, the court modified its summary judgment twice, on January 18, 2002, and again on February 26, 2002.
The court noted that MCLI is primarily responsible for the closure and postclosure costs but that the County would be able to hold MCLI accountable for indemnification in the event the County was required to pay for the costs of closure and postclosure. The court ordered the County to prepare a closure plan pursuant to K.A.R. 28-29-12. The court said its order was final and appealable but the court would retain jurisdiction to "enforce the Orders of KDHE as to closure and post closure cleanup and monitoring presently and for the next 30 years as required by statute."
The County moved to alter or amend the summary judgment, arguing that the October 16, 2001, settlement agreement between the KDHE and MCLI impaired its collateral. In response, MCLI admitted that MCLI "is still legally obligated to pay for the closure and post closure of the old Marion County landfill. It is only if MCLI cannot provide for the closure and post closure that the guarantees [of the County come] into play." MCLI also pointed out that the County, in fact, received a judgment against MCLI.
On January 18, 2002, the court held that the County "has waived its defense regarding impairment of collateral by its inaction" and granted the following amendment:
"The Court granted summary judgment to plaintiff against both defendants. The Court found that defendant Marion County guaranteed the landfill closing; that MCLI was primarily responsible for the cleanup and that Marion County be indemnified by MCLI in the event that MCLI did not comply with the cleanup orders."
. . . .
"Lastly, the Court assumed that MCLI lacked the financial ability to close the landfill. This assumption by the Court may be correct but the Court has no evidence upon which to make that finding. MCLI, being primarily responsible [for] the closing shall submit a closing plan as required in the original order of [the County]. The plan shall be submitted to the [KDHE] by March 20, 2002. If said plan is not submitted by that date, [KDHE] or [the County] shall prepare a motion, order and affidavit for MCLI to show cause why they should not be held in contempt for failure to abide by the Court's order. The order for [the County] to submit a closing plan is vacated pending further order."
The district court amended its summary judgment a second time on February 21, 2002, at the request of MSW by deleting language from its January 18, 2002, order saying that the settlement agreement required MCLI and MSW "to perform pursuant to [KDHE's] administrative order."
The Appeal
The County contends on appeal that the district court erred by: (1) concluding that the County was a generator of the solid waste under K.S.A. 65-3418, (2) holding the County liable because the site was a public nuisance, (3) holding that the County was responsible for the closure and postclosure operations of the site as guarantor, (4) holding that the settlement between the KDHE and MCLI and MSW did not release the County from its guaranties, (5) holding that the County's cause of action against MSW was barred by the statute of limitations, and (6) holding that K.S.A. 17-7101(b) barred the County's cause of action against the MCLI shareholders.
The County's Responsibility under K.S.A. 65-3418
The resolution of the County's responsibility under K.S.A. 65-3418 is a question of law and our standard of review is unlimited. See Hamilton v. State Farm Fire & Cas. Co., 263 Kan. 875, 879, 953 P.2d 1027 (1998). The rules of statutory interpretation are well established:
"It is a fundamental rule of statutory construction, to which all other rules are subordinate, that the intent of the legislature governs if that intent can be ascertained. [Citation omitted.] The legislature is presumed to have expressed its intent through the language of the statutory scheme it enacted. When a statute is plain and unambiguous, the court must give effect to the intention of the legislature as expressed, rather than determine what the law should or should not be. [Citation omitted.] Stated another way, when a statute is plain and unambiguous, the appellate courts will not speculate as to the legislative intent behind it and will not read such a statute so as to add something not readily found in the statute. [Citation omitted.]" In re Marriage of Killman, 264 Kan. 33, 42-43, 955 P.2d 1228 (1998).
The County argued that it was not liable for the closure and postclosure costs of the landfill as a generator under K.S.A. 65-3418(a), while the KDHE and MCLI argued that under K.S.A. 65-3418(a), the title to the waste belonged to the County, and the County was, therefore, primarily responsible for cleaning up the site.
K.S.A. 65-3418 provides in relevant part as follows:
"(a) Title to the solid waste collected, processed or disposed of in accordance with the provisions of this act and the rules and regulations adopted thereunder shall vest in the owner of the solid waste management activity, area or facility in which the solid waste is placed. Solid waste produced from a discrete source disposed of in ways other than in accordance with this act shall remain the property of the generator and the generator shall be liable for removal of the waste, restoration of the area in which the waste was disposed and to provide for lawful disposal of the waste. It shall not constitute a defense to the generator that the generator acted through an independent contractor in the transportation or disposal of the solid waste."
The first sentence of the statute covers the case of title passing when the landfill is in compliance with statutes and regulations. In such cases, title to the waste vests in the owner of the landfill. Where solid waste produced from a discrete source is disposed of in ways other than in accordance with the act, the solid waste remains the property of the generator and the generator shall be liable for removal of the waste, restoration of the area in which the waste was disposed of, and lawful disposal of the waste. The district court concluded that the County was the generator of the waste and further concluded in accordance with the second sentence of K.S.A. 65-3418(a) that the title remained with the generator, thereby making the County liable for the closure and postclosure of the landfill.
K.S.A. 65-3402(k) defines "generator" to be "any person who produces or brings into existence solid waste." "Person" is defined as an "individual, partnership, firm, trust, company, association, corporation, individual or individuals having controlling or majority interest in a corporation, institution, political subdivision, state agency or federal department or agency." K.S.A. 65-3402(e). The district court recognized that the waste in the landfill was generated by the citizens of Marion County but reasoned that it would be "impractical if not impossible" to individually sue each citizen of the County whose waste was deposited. Based upon the evidence that most of the waste emanated from Marion County residents and upon the County's overall responsibility for waste disposal within its county, the district court concluded that the County was the generator of the waste.
The district court's conclusion that Marion County was the generator of the waste is not supported by the language of the statute. K.S.A. 65-3418(a) provides in the second sentence that title shall "remain the property of the generator," which contemplates that title remains in the party that originally had title. However, the evidence establishes that the majority of waste deposited in the landfill came from the citizens of the County, not the County itself. The difficulty of suing each citizen cited by the district court does not alter the fact that the County never had title to the waste in question.
In addition, for the second sentence of K.S.A. 65-3418(a) to operate, the waste must emanate from a "discrete source," a term not defined in the act. Webster's Ninth New Collegiate Dictionary 362 (1991) defines "discrete" as "constituting a separate entity; individually distinct," "consisting of distinct or unconnected elements," or "taking on or having a finite or countably infinite number of values." Black's Law Dictionary 479 (7th ed. 1999) defines "discrete" as "individual; se