By Dan Christensen, FloridaBulldog.org
Six acrimonious years of litigation that climaxed last month in a four-week trial, ended late Friday when a Broward judge ruled there was no evidence that Waste Management and its co-defendants conspired to ruin the recycling business of Davie businessman Ron Bergeron.
Chief Judge Jack Tuter’s sweeping ruling, rejecting Bergeron’s legal arguments at every turn, is a crushing defeat for the wealthy, politically connected land baron who currently serves on the governing board of the South Florida Water Management District.
“It is adjudged that Plaintiff, Bergeron Environmental and Recycling LLC take nothing by this action,” Tuter wrote in his 22-page order. The judge then ordered Bergeron to pay what could amount to millions of dollars in attorney fees and costs for those he sued – defendants Waste Management, LGL Reycling LLC (formerly known as Sun Recycling LLC, and LGL officers Anthony Lomangino, Charles Gusmano, Charles Lomangino and John Casagrande.
The defendants’ lawyers included Holland & Knight, Mracheck, Fitzgerald, Rose, Konopka, Thomas & Weiss, Clyde & Co. and Bruce Rogow. Bergeron’s law firm was Berger Singerman.
The roots of the case trace to 2011 when Bergeron and Anthony Lomangino got together to form Sun/Bergeron, a 50-50 joint venture (JV) for the purpose of bidding on municipal contracts to dispose of solid waste and recyclables.
Sun, part of Southern Waste Systems (SWS) had the infrastructure, trucks and disposal facilities. Bergeron had “the city and county contacts and an honorable reputation in Broward County,” Tuter wrote.
A DEAL GONE AWRY
For decades, Waste Management had a lock on Broward’s garbage services. But by 2013, after much lobbying, Sun/Bergeron had pried away 17 municipal contracts. They were to last five years, absent an extension. Under Sun/Bergeron the costs of disposal services went down dramatically.
But half-way through, Bergeron found out that Lomangino was shopping his assets to the highest bidder. Bergeron has contended Lomangino hid his talks with Waste Management. Tuter, however, said the evidence presented showed that Sun had advised Bergeron Environmental they were in negotiations “to sell most, but not all of their assets, probably to Waste Management.”
A provision in the joint venture agreement required both partners – Lomangino and Bergeron – consent on major issues and that consent “shall not be unreasonably withheld.”
Bergeron Environmental’s testimony about what they knew was “inconsistent with the evidence,” Tuter wrote. “Not only did SUN leave a substantial paper trail advising BERI (Bergeron Environmental) of a potential asset sale, they made it clear in memos, emails and in face-to-face conversations.”
The $525 million sale, via what’s known as an asset purchase agreement, was done in January 2016. It gave Waste Management, owner of the mountainous Monarch Hill landfill in Pompano Beach, control of the recycling waste stream. Much trash that was formerly recycled is now dumped at Monarch Hill.
Still, the deal was odd for a reason left unaddressed by the judge: one month before, state anti-trust regulators under then Attorney General Pam Bondi issued a secret letter to lawyers for Waste Management had agreed to OK the trash giant’s purchase of SWS after being assured the cities would be able to renew their contracts in 2018 on the same terms and conditions. The cities were never informed of that condition or others mentioned in the letter.
Florida Bulldog obtained a copy of the letter in May 2018 after a clerk’s error.
Tuter’s order goes on to note that a significant part of the testimony in the case had to do with a July 2015 letter from Bergeron Environmental to Sun “setting out 13 conditions” required for Bergeron to consent to the deal.
“Despite protestations to the contrary by BERI, the Court finds all of the demands were financial in nature. BERI’s financial demands totaled 6.3 million dollars and were met with a 4.3 million dollar offer” by Sun.
According to the judge, that $2 million dollar difference is what led to the lawsuit.
“As altruistic as the JV began, i.e to bring competition to the marketplace for disposal services in Broward County, in the end had the JV partners agreed to financial terms this litigation would never (have) ensued,” Tuter wrote.
Tuter took pains to say for the record that he considered all the individual plaintiffs and defendants, as well as Waste Management Chief Operating Officer John Morris, to be “credible and believable” witnesses. Of Ron Bergeron, Tuter said, he’s “an honorable and truthful person who the Court found to be a believable and credible witness.” Bergeron’s son and partner, Lonnie, “likewise gave honest testimony but his memory on some issues” was inconsistent.
“In a simplistic way, BERI argued to the Court the evidence would be that Sun and Waste were engaged in a vast, long planned conspiracy to steal the JV customer contracts. The Court should be clear on this issue – there was no competent substantial evidence to support such a theory,” Tuter wrote. “The court rejects such a contention as these allegations were founded in conjecture, supposition and failure of proof.”
“For years, BERI saw everything Waste did in this transaction as having some nefarious intent. The Court finds from the evidence Waste has been much maligned throughout this litigation and during the trial. Waste was doing what all for profit businesses do – attempting to negotiate the purchase of assets to increase shareholder value.
“It was Sun who approached Waste. Waste did not seek out Sun,” Tuter wrote.
Tuter noted that certain “schedules” in the asset purchase agreement were
“swapped, changed and not handled as proficiently as a transaction of this magnitude deserved.” That apparently resulted in confusion about the terms of the deal and whether the joint venture’s municipal contracts were included. The defendants have contended they were not part of the asset sale to Waste Management.
Tuter said he resolved conflicting testimony on the matter by believing the testimony of a LGL’s lawyer, Amy Burbot, that the “initial inclusion” of the JV customer contracts in the deal “was done so in error with no malicious intent to deceive anyone – including government (anti-trust) regulators from the United States Department of Justice or the Florida Attorney General.”
Once the financial negotiations with Bergeron broke down, Tuter wrote, it was clear Waste and Sun were going to close the deal without his consent and “both sides began letter writing campaigns, none of which were healthy or beneficial to the JV.”
After the deal was done, Sun named John Casagrande to serve as its representative to the JV. What Bergeron didn’t know then was that Casagrande had also signed a lucrative consulting agreement with Waste Management. Tuter called the relationship “deceptive,” but noted it lasted only 67 days “and resulted in no harm or damage” to Bergeron.
“The evidence showed the JV contracts in question were at best a break-even financial proposition. What really happened here was that after BERI was unsuccessful in negotiating a healthy financial settlement, they began a series of steps to alert State and Federal regulators as to what they perceived the APA (asset purchase agreement) between Sun and Waste, if closed, would mean, i.e. a monopoly in favor of Waste for refuse collection services in Broward County,” Tuter wrote.
“At the end of the day the idealistic JV agreement formed to find ways to compete in the marketplace devolved into distrust, animosity, and name calling all resulting in millions of dollars in litigation legal fees and costs.
“Make no mistake the Bergeron family should be commended for their philanthropic contributions to Broward County. This Court is compelled to make decisions based on the greater weight of the evidence,” which Tuter noted is defined in the law as the “more persuasive and convincing force and effect of the entire evidence in this case.”
In 2020, the latest year for which numbers are available, Broward’s overall adjusted recycling rate was 42 percent. Florida’s Legislature in 2008 set a recycling goal of 75 percent by 2020.
Monarch Hill continues to swell.