Browning-Ferris Industries, Inc. v. Casella Waste Management of Massachusetts, Inc.
79 Mass. App. Ct. 300
| Mass. App. Ct. | 2011Background
- BFI and Casella shared disposal rights at the Ogden waste-to-energy facility under the Disposal Rights Agreement (DRA).
- Section 4(d) allowed Casella to increase but not decrease the daily maximum; notices required ten days prior and an estimate for the following month, with explicit caps.
- From 2000–2004 Casella repeatedly increased volumes under § 4(d) through informal notices, avoiding written notice/estimates.
- In 2004 Casella curtailed deliveries and challenged § 4(d) as allowing no decrease, while BFI argued the increases were irreversible.
- The trial court found ambiguity, supplied an equitable term to permit downward adjustments, and the court’s judgment was appealed by both sides; the appellate court affirmed.
- The final judgment kept the DRA in force, with the inserted term allowing Casella to decrease volumes in increments while preserving baseline commitments and maintaining competition obligations under the consent judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there an ambiguity in § 4(d) regarding reversibility of increases? | BFI: § 4(d) makes increases permanent; no reversal implied. | Casella: § 4(d) permits temporary, reversible increases; ambiguity exists. | Yes, ambiguity exists and requires extrinsic evidence. |
| Should extrinsic evidence govern interpretation of the alleged ambiguity? | BFI: extrinsic evidence supports permanence of increases. | Casella: extrinsic evidence shows intent for flexibility. | Extrinsic evidence admissible and considered. |
| Is the equitable omission term appropriate to resolve the agreement gap? | BFI: court-constructed term improperly rewrites contract. | Casella: need for term to reflect mutual objectives and avoid inefficiency. | Yes; term inserted to align with business objectives and fairness. |
| Should rescission be granted due to mutual mistake? | BFI: no mutual mistake; rescission inappropriate. | Casella: mutual mistake warrants rescission. | No rescission; equitable rescission denied. |
| Who bears §17 attorney’s fees given mixed outcomes? | Both sides partially prevailed; no prevailing party. | No prevailing party for fee shift. |
Key Cases Cited
- Bank v. Thermo Elemental, Inc., 451 Mass. 638 (Mass. 2008) (ambiguity and extrinsic evidence in contract interpretation)
- Berkowitz v. President & Fellows of Harvard College, 58 Mass. App. Ct. 262 (Mass. App. Ct. 2003) (ambiguity analysis in contract construction)
- Quinn v. Mar-Lees Seafood, LLC, 69 Mass. App. Ct. 688 (Mass. App. Ct. 2007) (ambiguity standard andj duress considerations)
- Seaco Ins. Co. v. Barbosa, 435 Mass. 772 (Mass. 2002) (contract ambiguity and extrinsic evidence permissible)
- Glick v. Greenleaf, 383 Mass. 290 (Mass. 1981) (consideration of general scheme and related documents)
- Fay, Spofford & Thorndike, Inc. v. Massachusetts Port Authy., 7 Mass. App. Ct. 336 (Mass. App. Ct. 1979) (equitable term supplementation when term omitted)
- Lafayette Place Assocs. v. Boston Redev. Authy., 427 Mass. 509 (Mass. 1998) (interpretation to fulfill parties’ intentions and create rational instrument)
- Starr v. Fordham, 420 Mass. 178 (Mass. 1995) (constitutional or policy considerations in contract interpretation)
- Finn v. McNeil, 23 Mass. App. Ct. 367 (Mass. App. Ct. 1987) (extrinsic evidence and implied terms)
- Winchester Gables, Inc. v. Host Marriott Corp., 70 Mass. App. Ct. 585 (Mass. App. Ct. 2007) (market-course of dealing and contract interpretation)