By Dan Christensen, FloridaBulldog.org
Call it the case of the $20 million oops.
In a startling, self-critical and ultimately embarrassing order issued Tuesday, Broward Chief Judge Jack Tuter tossed out a recent $20 million jury verdict in favor of Palm Beach trash mogul Anthony Lomangino and his Southern Waste Systems (now known as LGL Systems) and declared instead that Waste Management doesn’t have to pay him anything.
“The court erred when it determined Southern/LGL was entitled to a jury trial on ‘factual’ disputes relating to an agreed upon holdback which was part of a buy-sell APA [Asset Purchase Agreement],” says Tuter’s 13-page order.
The dispute was a spinoff of an even bigger money case that influential Davie businessman Ron Bergeron and his Bergeron Environmental and Recycling LLC took to trial and lost last year against both Lomangino and Waste Management.
Bergeron had sued claiming Lomangino and Waste Management conspired to ruin the joint venture recycling and disposal business he was in with Lomangino, Sun Bergeron. The asset purchase agreement was the vehicle used by Waste Management to buy Southern’s assets in January 2016 for $525 million.
But not all the money was actually paid. By mutual agreement, Waste Management held back $20 million to indemnify it in case Bergeron sued. It was put into an interest-bearing account, where it sits today.
“To close the deal Southern/LGL agreed to indemnify WMIF [Waste Management Inc. of Florida] in the event Bergeron sued. Southern/LGL now attempts to renege on the deal,” Chief Judge Tuter wrote.
Waste Management had insisted on the holdback because, as Tuter observed, it “was understandably concerned Bergeron would sue them.”
Why? Sun Bergeron obtained contracts with 17 Broward municipalities that Ron Bergeron managed to pry away from Waste Management – breaking its long, virtually exclusive grip on waste disposal in Broward.
The initial success of Sun Bergeron dramatically drove down the cost of disposal services starting in 2013. But when time was approaching for the cities to renew in 2018 under a provision that would allow them to do so at the same prices upon mutual agreement for another five years, a Lomangino associate at Sun Bergeron told the cities that renewals would only be available at much higher prices.
Weeks before the sale was completed, however, state anti-trust regulators under then Attorney General Pam Bondi issued a secret letter to lawyers for Waste Management stating they had agreed to OK the purchase after being assured the cities would be able to renew their contracts in 2018 on the same terms and conditions. Oddly, the letter was never shared with the cities. Florida Bulldog obtained a copy in May 2018 after a clerk’s error.
The upshot: disposal prices jumped and much trash that was formerly recycled is now dumped in Waste Management’s Monarch Hill Landfill in Coconut Creek astride Florida’s Turnpike.
After years of back and forth, Bergeron’s claims finally went to trial over four weeks in April 2022. A month later, in a ruling that stunned some in the county’s legal community, Tuter found that there was no evidence that Waste Management or Lomangino had conspired against Bergeron.
“It is adjudged that plaintiff, Bergeron Environmental and Recycling LLC, take nothing by this action,” Tuter wrote. Bergeron has appealed.
In the meantime, Lomangino sued Waste Management, asserting that it committed a “material breach” of the purchase agreement by not agreeing to release the $20 million holdback when he requested it in 2017 and 2018. Lomangino was paying the high-priced attorneys that defended both himself and Waste Management and he wanted to tap the $20 million to do it.
After a three-day trial in May, the jury agreed with Lomangino. But now Tuter has overruled it, saying the contract “clearly and indisputably had the right to ensure that it would be paid from the Holdback any amounts owed to it ‘at any time’ as a result of the Bergeron lawsuit, indisputably still on-going and not final.” [Judge’s emphasis]
“In other words, the clear and unambiguous language of this provision afforded WMIF the right to have the entirety of the Holdback remain in escrow [where it was and is still, accruing interest for LGL], pending the conclusion of the Bergeron lawsuit and a determination of WMIF’s actual ‘exposure,’ if any in that lawsuit.”
Waste Management protested after the jury came back, arguing for Tuter to issue a directed verdict in the case.
In response, Tuter now admits he goofed when he agreed to seat a jury in the first place. He says he did it “out of an abundance of caution” and “despite the Court agreeing with WMIF that many or all of the issues LGL complained about were either resolved on summary judgment did not involve jury issues…As such, the remaining issues in this case were legal decisions for the Court and not a jury.”
The chief judge cited nearly a dozen reasons why Southern/LGL “failed to establish the elements of a ‘material breach’ and damages.
“Moreover, LGL’s temporary lack of use or enjoyment of the Holdback money and its purported ability to obtain a higher interest rate than the rate at which the money was already accruing interest in the agreed joint escrow account…does not, as a matter of law, constitute damages on LGL’s claim,” Tuter wrote.
“It was imprudent for the Court to permit Southern/LGL to retry matters which the Court had previously determined.”