cp08-10-1993 Closed Meeting c0
CLOSED MEETING
HUTCHINSON CITY COUNCIL
TUESDAY, AUGUST 10, 1993
6:30 P.M.
Attorney Morgan Godfrey will be making a
presentation regarding the status of the
Junker litigation.
0
ARNOLD & MCDOWELL
ATTORNEYS AT LAw
5881 CEDAR LAKE ROAD
MINNEAPOLIS, MINNESOTA 55416-1492
(612) 545 -9000
MV TOLL FREE 800- 343 -4343
FAR (612) 345-1193
July 27, 1993
Gary D. Plotz
Hutchinson City Administrator
Hutchinson City Hall
37 Washington Avenue West
Hutchinson, MN 55350
Re: Junker Sanitary Service, Inc
Court File No. C9 -92 -24534
Marshall and Associates File
Our File No. 3188 -92212
Dear Gary:
OF COUN3XL
NILLLM W. CAMERON
RAYMOND C. LALLIER
SOI SOUTH FOURTH STREET
PRINCETON, MINNESOTA 53371
(612) 389-2214
PAX (612) 389-5306
101 PARE PLACE
HUTCHINSON. MINNESOTA 55350
(612) 581-1515
FAx (612) SBT!G�
v. City of Hutchinson
No. 105219.002
VZD
. As required by court order, Junker has filed its Amended Complaint
and a copy of the Amended Complaint is enclosed. I would ask that
you pass along a copy of this correspondence as well as the Amended
Complaint to the council in the next council packet for their
review and information.
I have had an extensive meeting with representatives of the League
Trust in an effort to convince them that the defense of this matter
should be assumed by the League Trust and that the city should be
relieved of that expense.
To date, I have not heard from the League Trust regarding the
results of our meeting and I will keep the City Council advised of
any developments.
Thank you. Best regards.
Very truly yours,
ARNOLD & McDOWELL
I'D 11
G. Barry Ande on
GBA /pb
0 Enclosure
'CERTIFIED AS A CIVIL TRIAL SPECIALIST BY THE MINNESOTA STATE BAH ASSOCIATION
"CERTIFIED AS A REAL PROPERTY LAW SPECIALIST BY THE MINNESOTA STATE BAR ASSOCIATION
DAVID B. ARNOLD
GARY D. UCDOWELL
STEVEN A. ANDERSON
•
O. BARRY ANDERSON'
STEVEN S. HOGE
LAURA K.PRETLAND
DAVID A. BEUEOOEMANN
PAUL D. DOVE"
JOSEPH M. PAIEMENT
JAMES UTLEY
RICHARD O. NtGEE
CATHRYN D. REHER
OINA M. BRANDT
ARNOLD & MCDOWELL
ATTORNEYS AT LAw
5881 CEDAR LAKE ROAD
MINNEAPOLIS, MINNESOTA 55416-1492
(612) 545 -9000
MV TOLL FREE 800- 343 -4343
FAR (612) 345-1193
July 27, 1993
Gary D. Plotz
Hutchinson City Administrator
Hutchinson City Hall
37 Washington Avenue West
Hutchinson, MN 55350
Re: Junker Sanitary Service, Inc
Court File No. C9 -92 -24534
Marshall and Associates File
Our File No. 3188 -92212
Dear Gary:
OF COUN3XL
NILLLM W. CAMERON
RAYMOND C. LALLIER
SOI SOUTH FOURTH STREET
PRINCETON, MINNESOTA 53371
(612) 389-2214
PAX (612) 389-5306
101 PARE PLACE
HUTCHINSON. MINNESOTA 55350
(612) 581-1515
FAx (612) SBT!G�
v. City of Hutchinson
No. 105219.002
VZD
. As required by court order, Junker has filed its Amended Complaint
and a copy of the Amended Complaint is enclosed. I would ask that
you pass along a copy of this correspondence as well as the Amended
Complaint to the council in the next council packet for their
review and information.
I have had an extensive meeting with representatives of the League
Trust in an effort to convince them that the defense of this matter
should be assumed by the League Trust and that the city should be
relieved of that expense.
To date, I have not heard from the League Trust regarding the
results of our meeting and I will keep the City Council advised of
any developments.
Thank you. Best regards.
Very truly yours,
ARNOLD & McDOWELL
I'D 11
G. Barry Ande on
GBA /pb
0 Enclosure
'CERTIFIED AS A CIVIL TRIAL SPECIALIST BY THE MINNESOTA STATE BAH ASSOCIATION
"CERTIFIED AS A REAL PROPERTY LAW SPECIALIST BY THE MINNESOTA STATE BAR ASSOCIATION
Marshall and Associates, P.A.
Attorneys at Law
ACorw s:
Joseph B. Mars/au
Morgan �dgey
Anita 1. lehJ'
Richard M. Schnllz **
*Also admined in California
"Also admitted in Wisconsin
July 21, 1993
Mr. Barry Anderson
Hutchinson City Attorney
101 Park Place
Hutchinson, MN 55350
Hden on,
Heim Pabn
Loren Hoocc�/��g
Deborah A. McCoBow
Debra l Tamer
2` ,627282
rb p
``9�S1 Yl Sl Zll���
RE: Junker Sanitary Service, Inc. v. City of Hutchinson
Court File No. C9 -92 -24534
Our File No. 105219.002
Dear Mr. Anderson:
Pursuant to your request I have enclosed a copy of the Amended
Complaint for your review. 0
We are in the process of filing for a continuance in order to
conduct additional discovery. It appears trial will not be until
at least December 14, 1993, at the earliest.
I will notify you when a date has been set. Morgan will be in
touch with you soon.
Very truly yours,
MARSHALL AND ASSOCIATES, P.A.
Deborah McCollow
Paralegal
DM /pkh
Enclosure
105219.002 \L -008
i
(612) 784 -0890 9501 Lexington Avenue North PAY (612) 784 -4393
Circle Pines, Minnesota 55014
0
0
STATE OF MINNESOTA
COUNTY OF MCLEOD
Junker Sanitary Services, Inc.,
10. Other Civil
Municipal Law
Constitutional Law
DISTRICT COURT
FIRST JUDICIAL DISTRICT
Court File No.: C9 -92 -24534
Plaintiff,
VS.
AMENDED COMPLAINT
City of Hutchinson, a municipal
corporation,
Defendant.
Plaintiff, Junker Sanitary Services, Inc. ("Junker"), for its complaint against defendant
City of Hutchinson ('City" or "Hutchinson "), states and alleges as follows:
PARTIES AND VENUE
1. Junker is a Minnesota corporation with its principal place of business in
Stillwater, Minnesota. Junker is in the business of providing residential and commercial
garbage and refuse pickup service to a variety of communities, businesses and individuals.
From 1980 to 1992, Junker provided exclusive commercial and residential garbage and refuse
pickup service to Hutchinson pursuant to a contract between the parties.
657771
EXHIBIT A
2. Hutchinson is an incorporated municipality under Minnesota law which is
required to comply with public contracting statutes and bidding rules.
3. Venue is proper in this court pursuant to Minn. Stat. § 542.09 as the defendant
resides in this district and the cause of action or some part thereof arose in this district.
SUMMARY
4. This is an action to prohibit Hutchinson from unilaterally and improperly
refusing to deal with Junket, its commercial and residential garbage and refuse carrier for
the past 12 years, and for damages. Hutchinson made it clear, through its actions and words
that it would not continue its relationship and that, upon the expiration of Junker's contract,
it would contract with others for service. Hutchinson, in fact, contracted with others. The
expiration of the contract, however, did not entitle Hutchinson to walk away from its
obligations. Rather, pursuant to Minnesota law, Hutchinson should have continued to deal
with Junker on the basis of and according to the terms of the contract until the City had
successfully "organized collection" under Minn. Stat. § 115A.94, including the time limits and
negotiation requirements in that statute. Hutchinson attempted to bypass those obligations
by relying on a facially invalid special law that was passed in the closing moments of the
1992 legislative session. Junker has suffered damages as a direct and proximate result of
that violation.
This action also seeks damages caused Junker as a direct and proximate result
of Hutchinson's breach of its contract with Junker, all as is described with more particularity
below.
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0 FACTUAL BACKGROUND
THE EXISTING CONTRACT WITH TUNKER
5. The City is empowered by statute to enact ordinances and is obligated by law
to comply with the terms of the ordinances it enacts. Pursuant to that authority, Hutchinson,
in or prior to 1980, enacted Ordinance Section 225.05 which provided, in part, that "All
garbage and refuse accumulated in the municipality shall be collected, conveyed, and
disposed of through the legal authorized agent, the City collection contractor ... .
(emphasis added.)
6. Based on this ordinance Hutchinson was obligated to hire one (and only one)
contractor to be the legal authorized agent to provide both commercial and residential
garbage and refuse service within the city limits.
• 7. Junker was the legal authorized agent and had been providing commercial and
residential garbage and refuse service within the city limits for the past 12 years in
accordance with the terms of the city ordinance and the July 1, 1980 Exclusive Service
Agreement.
8. Junker's contract expired according to its terms on June 30, 1992. At that
time, however, there was not in place another contract or other lawful arrangement to
replace Junket to provide residential and /or commercial garbage and refuse services. No
contract was in place for, among other reasons, the City's dilatory behavior. Junker
approached Hutchinson many months before the contract was to expire in an effort to
negotiate a new arrangement. The City refused to negotiate and made it clear through its
words and actions that it did not want to deal with Junker. The City's attitude was not
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Kl
based on any good or lawful reason but rather was based on its reaction to a preexisting
lawsuit between the parties.
9. Junker was ready, willing, and able to continue to perform both residential and
commercial garbage and refuse hauling services.
STATUTORY ORGANIZED COLLECTION
10. Hutchinson determined to implement a system of exclusive garbage and refuse
services with a single provider. The existing arrangement between Junker and Hutchinson
constitutes "organized collection" within the meaning of the Minnesota Waste Management
Act, Minn. Stat. § 115A.94, subd. 1, which defines "organized collection" as "a system for
collecting solid waste in which a specified collector, or a member of an organization of
collectors, is authorized to collect from a defined geographic service area or areas some or
all of the solid waste that is released by generators for colIection." 0
11. Junker's contract, Hutchinson's prior ordinance and Minn. Stat. § 115A.94 all
apply to both residential and commercial garbage and refuse services.
12. Due to the unequal bargaining power that a city may exert over a garbage
hauler, the Minnesota legislature has determined that municipalities must engage in a
prescnbed negotiation process before organizing collection or, in this case, reorganizing
collection at the expiration of the existing contract, whether with Junker or another vendor.
Such a requirement is intended to protect the existing hauler's economic rights against
arbitrary interference by government officials and assures a level playing field.
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• 13. To accomplish its purpose, the statute obligates the City to engage in a 180 -day
process to secure a new contract for solid waste disposal services whether with Junker or
another vendor. Minn. Stat. § 115A.94.
14. Since the City's existing organized collection applies equally to residential and
commercial garbage and refuse services, Minn. Stat. § 115A.94 requires that any subsequent
organized collection comply with the statute equally as to both residential and commercial
garbage and refuse services.
15. The process of organizing collection allows the City to contract with a vendor
to "collect ... some or all of the solid waste that is released by generators for collection."
Minn. Stat. § 115A.94, subd. 1. The term "generator" is statutorily defined to mean "any
person who generates waste." Minn. Stat. § 115A.03, subd. 12. "Person" includes "any ...
public or private corporation, any partnership, firm, association, or other organization ..."
Minn. Stat. § 115A.03, subd. 23 and § 116.06, subd. 8. The statute goes on to prohibit a city
from contracting with, changing a contract with, or otherwise modify its arrangement except
by complying with the 180 day negotiation and bidding process specified by statute. Minn.
Stat. § 1155.94, subd. 4.
THE CITY'S ATTEMPTS TO CIRCUMVENT THE ORGANIZED
COLLECTION STATUTE
16. The City failed to commence that process in time to have a new contract in
place by June 30, 1992. Junker was ready, willing and able to provide services during the
interim period at the same level and cost of service as provided under the Exclusive Services
Agreement.
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17. The City determined, for no good reason, that it no longer desired to deal with
Junker and, in the process, has caused Junker's legal and equitable rights to be significantly
impaired, including trying to avoid the operation of the organized collection statute.
THE SPECIAL LEGISLATION
18. Absent some authority not provided in the general legislation, city ordinance
or the contract, the City's failure to commence the process of organizing collection in a
timely fashion obligated it to continue its relationship with Junker until the provisions of
Section 115A.94 have been complied with.
19. At the end of the 1992 legislative session, an amendment was attached to the
Waste Management Act which purports to allow a city fitting the description of Hutchinson
(without specifically naming Hutchinson) to contract with any vendor for the interim period
without regard to the statutory requirements. 1992 Minn. Laws, Ch. 593, Art. 1, § 45
(enacted April 27, 1992).
20. That amendment was sponsored by Senator Bernhagen, who represents the
Hutchinson District in the legislation. This statute provides:
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Sec. 45. [INTERIM ORGANIZED SOLID WASTE COLLECTION.]
(a) A city with a population, according to the 1990 federal census,
of more than 10,000 and less than 12,000 that, before the effective date of this
section, has begun the process of organizing solid waste collection under
Minnesota Statutes, section 115A.94, and that is a party to an exclusive
contract for collection of solid waste that will expire before the new organized
collection system will be effective, may:
(1) negotiate an extension of the existing exclusive
contract to the date the new organized collection system will be
effective;
0
(2) negotiate one or more separate waste collection
contracts for the period between the expiration of the existing
exclusive contract and the date the new organized collection
system will be effective; or
(3) otherwise negotiate, with or without competitive
bids, an interim waste collection system that may not be
extended beyond the date the new organized collection system
will be effective.
(b) This section does not affect the applicability of Minnesota
Statutes, section 115A.94, to the city's new organized collection system.
(the "Interim Services" statute.) Under the Interim Services statute, therefore, Hutchinson
can ignore Junker and the statutory waiting period and contract with other vendors for the
interim period. The Interim Services statute was passed with no committee discussion and
was slipped into the conference committee proposal at the very end of the process. Very
little discussion was had about that bill.
21. The Interim Services Statute applies to only Hutchinson and to no other city.
22. Pursuant to the authority purportedly granted by the legislature, Hutchinson
solicited bids for interim services pursuant to a Request for Proposal ( "RFP "). An interim
services contract was awarded to someone other than Junker ( "Interim Services Contract").
23. By order of this court dated July 10, 1992, the Interim Services Statute was
declared to be unconstitutional.
THE NEW ORDINANCE
24. Furthermore, the interim services RFP applies only to residential garbage and
refuse hauling services. Hutchinson has repudiated its obligation to allow Junker or any
other exclusive hauler to continue to provide commercial garbage and refuse services. The
City intends to allow "open hauling" of commercial garbage and refuse.
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25. In that regard, Hutchinson passed a new ordinance, No. 92 -57, which repeals
the prior ordinance, and purports to grant licensing rights to haulers of commercial and
residential garbage and refuse services separately as of July 1, 1992.
26. Junker received notice of the new ordinance on June 15, 1992. The notice
purports to require that a license application be submitted before 5:OOp.m. on June 17, 1992.
27. Pursuant to this court's order dated July 10, 1992, the Court determined that the
ordinance could not be implemented as of July 1, 1992. The RFP and the Interim Services
Contract are rendered void as a result of the foregoing.
28. Junker has a significant investment in equipment and facilities in Hutchinson,
much of which was rendered worthless or of significantly less value as a direct and proximate
result of the City's action.
COUNT 1 i
29. Junker incorporates, restates and realleges paragraphs 1 -28 of this Amended
Complaint as if fully set forth herein.
30. As a direct and proximate result of the foregoing, Junker has suffered damages
in an amount to be determined at trial.
COUNT 2
31. Junker incorporates, restates and realleges paragraphs 1 -30 of this Amended
Complaint as if fully set forth herein.
32. Hutchinson is legally obligated by statute to include in any proposal to organize
collection the right to provide exclusive commercial (as well as residential) garbage and
refuse services and must engage in the statutorily- mandated negotiation process. That
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process could not be completed until October 1, 1992. Hutchinson has repudiated that
obligation through enacting Ordinance No. 92 -57 which purports to grant licensing rights
separately to residential and commercial haulers as of July 1, 1992.
33. Ordinance No. 92 -57 conflicts with and is superseded by the organized
collection statute to the extent that Ordinance No. 92 -57 purports to negate the statutory
requirements.
34. As a direct and proximate result of the foregoing, Junker will suffer damages
in an amount to be established at trial.
COUNT 3
35. Junker incorporates, restates and realleges paragraphs 1 -30 of this Amended
Complaint as if fully set forth herein.
36. Hutchinson has breached the Exclusive Service Agreement in various ways,
including, without limitation, by permitting 3M to haul its own garbage and refuse.
37. This court, on or about February 7, 1992, issued its Findings of Fact,
Conclusions of Law, and Order for Judgment, determining, among other matters, that
Hutchinson had breached the exclusivity provisions of the Exclusive Service Agreement.
The court determined that Junker had sustained damages in the amount of $166,500 as a
direct and proximate result of this breach by means of the 3M- McKimm contract. These
damages were for the period of time through November 1, 1991.
38. For the period of time from November 1, 1991 through June 30, 1992,
Hutchinson continued to breach the exclusivity provisions of the Exclusive Service
Agreement by virtue of its permitting the 3M- McKimm contract to exist. Pursuant to the
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doctrine of res 'udf icata. Hutchinson is barred and estopped from relitigating its liability
pursuant to the exclusivity provision of the Exclusive Services Agreement.
39. As a direct and proximate result of this breach and other breaches of the
Exclusive Services Agreement, Junker has sustained damages in an amount to be
determined at trial.
WHEREFORE, plaintiff, Junker Sanitary Services, Inc., respectfully prays the Court
for entry of judgment against defendant as set forth in all counts above and that the court
grant plaintiff the following relief:
1. For judgment in favor of Junker in an amount to be determined at trial;
2. Awarding plaintiff all costs and disbursements of suit, including reasonable
attorney's fees; and
3. Awarding plaintiff such other and further relief as the Court deems just and 0
equitable.
DATED: April 16, 1993. BRIGGS AND MORGAN
657771
By �C.
John A- Vairns #14096
Margardf K. Savage #96003
2400 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
(612) 334 -8400
ATTORNEYS FOR PLAINTIFF
JUNKER SANITARY SERVICES, INC.
10
• ACKNOWLEDGMENT
0
The undersigned hereby acknowledges that costs, disbursements and reasonable
attorney and witness fees may be awarded pursuant to Minn. Stat. § 549.21, subd. 2, to the
party against whom the allegations in this pleading are asserted.
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