## Facts

- Ritchie Corp. owned real property used as a nonhazardous waste transfer station and conveyed title subject to an escrow agreement that preserved Ritchie’s reversionary interest.
- The escrow agreement granted the operator a contractual right of first refusal (ROFR) to purchase Ritchie’s reversionary interest if Ritchie received an acceptable third-party offer, on the “same financial terms and conditions.”
- The operator’s interest, including the ROFR, was assigned to Waste Connections of Kansas, Inc., which operated the transfer station.
- Ritchie later negotiated with Cornejo & Sons, Inc. to sell two assets: (1) the transfer station property (subject to Waste Connections’ ROFR) and (2) an adjoining landfill.
- The parties executed an asset purchase agreement with two alternative pricing structures:
  - A combined “package” purchase price of $4.95 million for both properties, allocating $2.0 million to the transfer station and $2.95 million to the landfill.
  - If Waste Connections exercised its ROFR, Cornejo would buy only the landfill for $3.5 million.
- Ritchie notified Waste Connections of an offer to purchase the transfer station for $2.0 million and treated that amount as the ROFR price.
- Waste Connections timely elected to exercise the ROFR but asserted the correct ROFR price was $1.45 million, calculated as the difference between the $4.95 million package price and the $3.5 million landfill-only price.
- Waste Connections tendered $2.0 million with a reservation of rights and filed suit seeking declaratory relief and asserting breach of contract and breach of the implied covenant of good faith and fair dealing.

## Issues

1. Whether the ROFR price term, applied to a multi-asset transaction with alternative pricing, unambiguously required Waste Connections to pay $2.0 million or $1.45 million.
2. Whether either party was entitled to summary judgment on contract interpretation and intent regarding the pricing/allocation structure.
3. Whether Ritchie’s structuring of the transaction and price allocation could constitute a breach of the implied covenant of good faith and fair dealing.
4. Whether attorney-fee relief tied to “prevailing party” status could be determined at the summary-judgment stage.

## Decision

- The Kansas Supreme Court reversed the Court of Appeals decision that had directed summary judgment for Waste Connections.
- The court also reversed the district court’s grant of summary judgment for Ritchie.
- The court remanded for further proceedings, holding that genuine issues of material fact precluded summary judgment for either party.
- The court held that attorney-fee determinations based on prevailing-party status were premature.

## Legal Principles

- Summary judgment is proper only when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law; evidence and reasonable inferences must be viewed in favor of the nonmovant.
- Related agreements forming a single transaction should be read together to give effect to the parties’ intent; where provisions reasonably support competing interpretations in application, factual development may be required.
- Kansas declaratory-judgment statutes are remedial and construed liberally to resolve uncertainty over parties’ rights and legal relations, but declaratory relief does not eliminate the need for fact-finding on disputed contractual meaning.
- The implied covenant of good faith and fair dealing applies to contracts; claims that a party structured a transaction to impair another’s contractual right (including a ROFR) may present fact questions not suitable for resolution on summary judgment.
- In multi-asset sales involving a ROFR on only one asset, price allocations and alternative pricing terms can create disputes that turn on intent, economic reality, and good faith rather than a purely textual reading.

## Conclusion

The Kansas Supreme Court held that the ROFR price dispute arising from a package sale with alternative pricing could not be resolved on summary judgment because material fact issues remained regarding contractual intent, the meaning of the offer terms as applied, and alleged lack of good faith; the case was remanded for further proceedings.


Waste Connections of Kan., Inc. v. Ritchie Corp., 296 Kan. 943, 298 P.3d 250 (Kan. 2013)