RTS LANDFILL, INC. et al. V. APPALACHIAN WASTE SYSTEMS, LLC et al. 598 S.E.2d 798 (2004) CASE BRIEF

RTS LANDFILL, INC. et al. V. APPALACHIAN WASTE SYSTEMS, LLC et al.

598 S.E.2d 798 (2004)

NATURE OF THE CASE: RTS (P), sanitation company, Appalachian (D), a limited liability company (LLC) and two people who owned the LLC, seeking an order enforcing agreements the parties signed. A Georgia trial court held that a provision in one agreement which gave P the right to purchase D and a provision in another agreement which required D to use P's landfill were invalid. P appealed.

FACTS: P sold one of its operating divisions to D, a company wholly owned and formed by Gerald S. Proctor and Sheryl D. Proctor, who were then employed by D's parent company, to complete the acquisition. P got a preemptive right of first refusal. P and D also executed a separate Disposal Agreement. The Disposal Agreement, requires D to deliver 'all nonhazardous solid waste under its control and custody' to Pine Bluff Landfill, Inc., a site owned by P, through December 31, 2002. The Disposal Agreement, which 'automatically terminate[s] upon the sale of the interests or assets of' D, was renewed through the end of 2008. The 'Seller's Right of First Refusal and Repurchase Option,' provided D granted to P a right of first refusal and the option to purchase any or all of the assets and any or all of the membership interests in D, in the event that D receives and desires to accept any bona fide offer from a third party. P got the right to purchase the assets at a price equal to the Offer less $500,000. D was to provide written notice to P to identify the third party offeror and attach a copy of the offer. Upon receipt, P had thirty days thereafter to notify D of its intent to purchase the subject assets or interests pursuant to the same general terms of the third party Offer and at the price stated herein. The closing shall occur no later than thirty (30) days thereafter. D notified P on December 3, 2002, that it had received an offer from Advanced Disposal Services North Georgia, LLC ('Advanced'), to purchase a 20 percent membership interest in D for $2.5 million. P claimed that the notice did not contain sufficient information to permit D to evaluate the offer and determine whether to exercise its right of first refusal. P filed suit against D and the Proctors, seeking an injunction to block the sale and damages for breach of contract. D filed a motion for a temporary restraining order and for expedited discovery pursuant. D answered and counterclaimed seeking declaratory and injunctive relief. D sought an order that the first right of refusal was invalid. D filed a motion to dismiss the complaint, or, alternatively, for judgment on the pleadings, a TRO, and an interlocutory injunction prohibiting P from seeking to enforce the two provisions in dispute. The court issued a TRO, essentially maintaining the status quo for 30 days. The court also ordered P to post a $2 million bond, and P complied. P filed a motion to dismiss D's declaratory judgment counterclaims based on the Disposal Agreement, contending that there was no justiciable controversy with respect thereto. A hearing was held. The trial court announced its intention to issue a declaratory judgment and an interlocutory injunction to D. The court ruled that the right of first refusal was unconstitutionally overbroad. The court found that the $500,000 discount provided to P amounted to 62.5 percent of the price. P appealed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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