Court Opinion

ID: 2774432
Source: CourtListenerOpinion
Date Created: 2015-01-29 16:05:14.866025+00
Date Added: 2024-06-11T11:27:54.332651
License: Public Domain

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SJC-11608

    BAY COLONY RAILROAD CORPORATION vs.    TOWN OF YARMOUTH &
                            another.1

        Norfolk.     October 7, 2014. - January 29, 2015.

 Present:   Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, &
                            Hines, JJ.

Railroad. Solid Waste Management. Municipal Corporations,
     Contracts. Contract, Municipality, Performance and breach,
     Implied covenant of good faith and fair dealing. Federal
     Preemption. Statute, Federal preemption.

     Civil action commenced in the Superior Court Department on
January 14, 2008.

     Motions for summary judgment were heard by John P. Connor,
Jr., J.; the remaining issues were tried before him; and a
motion for judgment notwithstanding the verdict was considered
by him.

     The Supreme Judicial Court on its own initiative
transferred the case from the Appeals Court.

     Joseph L. Tehan, Jr. (Jackie Cowin with him) for the
defendant.

    1
       SEMASS Partnership. The claims brought by Bay Colony
Railroad Corporation (Bay Colony) against SEMASS Partnership
were dismissed, and are not at issue in this appeal.
                                                                   2

     Joel G. Beckman (Dana A. Zakarian with him) for the
plaintiff.

    GANTS, C.J.   On June 30, 1989, the town of Yarmouth (town)

entered into a transportation contract (contract) with the Bay

Colony Railroad Corporation (Bay Colony) whereby Bay Colony was

to transport solid waste from the town's waste transfer station

to a waste-to-energy facility in Rochester (facility) operated

by the SEMASS Partnership (SEMASS).   At that time, Bay Colony

operated several rail lines in southeastern Massachusetts,

including rail lines between the town and Rochester, pursuant to

a lease agreement with the Commonwealth.   However, in the fall

of 2007, the Commonwealth notified Bay Colony that, effective

December 31, 2007, it would terminate Bay Colony's lease of the

Cape Cod rail lines, which meant that Bay Colony would no longer

be able to transport the town's waste to the facility by rail.

Section 9 of the contract provided that, in the event the

Commonwealth terminated Bay Colony's lease of the rail line, the

town agreed to permit Bay Colony either to assign the contract

to the railroad company that was awarded the lease of the rail

line or to continue to transport the waste "pursuant to the

terms of the [contract] either under an arrangement with a

successor operator or by other modes of transportation."     Bay

Colony notified the town by letter that, in accordance with the

provisions of section 9, it intended to continue to transport
                                                                    3

waste under the contract "by other modes of transportation,"

specifically, by truck rather than rail.   The town, however,

replied by letter that it intended to assign the contract to the

railroad operating company that was awarded the relevant rail

lease.2   In or about April 2008, the town began transporting its

waste from the transfer station to the facility with that

railroad company.

     Bay Colony filed suit, contending, among other claims, that

the town had committed a breach of the contract by terminating

Bay Colony as the waste transporter.   A Superior Court judge

granted Bay Colony's motion for summary judgment on its

declaratory judgment claim, and declared that the contract

granted Bay Colony "the right to assign its interest or fulfill

the agreement by alternate means of transportation."3   After

trial, a Superior Court jury found that the town had committed a

breach of the contract, and awarded damages of $800,000.

     On appeal, the town claims, first, that G. L. c. 160,

§ 70A, prohibited Bay Colony from transporting the town's waste

by truck after it lost its rail lease, and the judge erred as a

     2
       The town of Yarmouth (town) actually did not assign the
contract but instead entered into a new contract to transport
waste to the facility with the railroad company that was awarded
the rail lease that Bay Colony had lost.
     3
       The judge denied the town's and Bay Colony's motions for
summary judgment on the breach of contract claim, concluding
that genuine issues of material fact remained to be resolved at
trial.
                                                                     4

matter of law in concluding that § 70A was preempted by the

Federal Aviation Administration Authorization Act (act); second,

that the permit issued to the town by the Department of

Environmental Protection (DEP) for the operation of the town's

waste transfer station prohibited the long-term trucking of

waste, and the town had no obligation under the contract to seek

a modification of the permit to allow its waste to be

transported by truck; and third, that the town's contract with

Bay Colony had terminated prior to the alleged breach.4    We

transferred the appeal on our own motion.    We reject each of the

town's three claims and affirm the judgment.

     Discussion.    1.   Federal preemption of G. L. c. 160, § 70A.

Enacted in 1925, G. L. c. 160, § 70A, allows "railroad

corporation[s] . . . [to] own, maintain and operate motor

vehicles not running upon rails or tracks . . . for the

transportation of . . . freight."    G. L. c. 160, § 70A, inserted

by St. 1925, c. 125, § 1, as amended through St. 1932, c. 236.

But the statute forbids a railroad corporation from operating

trucks for the transportation of freight within the Commonwealth

in areas that the railroad corporation does not "serve[]" by

rail.    Id. ("Motor vehicles operated by a railroad corporation

directly or through subsidiaries for the transportation of

     4
       The town does not challenge on appeal the declaratory
judgment.
                                                                    5

freight within the commonwealth shall be operated only in areas

now served by such corporation").    The town contends that Bay

Colony could not lawfully perform the contract by truck once it

lost its rail line lease because it would then be operating

motor vehicles for the transportation of freight in areas where

it no longer provides rail service, in violation of § 70A.

    In 1994, however, Congress passed the act "upon finding

that [S]tate governance of intrastate transportation of property

had become 'unreasonably burden[some]' to 'free trade,

interstate commerce, and American consumers.'"    Dan's City Used

Cars, Inc. v. Pelkey, 133 S. Ct. 1769, 1775 (2013), quoting

Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 440

(2002).   See Pub. L. No. 103-305, Title VI, § 601(a), 108 Stat.

1605 (1994).   The act completed the Federal deregulation of the

trucking industry that had started with the enactment of the

Federal Motor Carrier Act of 1980 "by expressly preempting

[S]tate trucking regulation."    Dan's City Used Cars, Inc.,

supra.    The express preemption provision of the act provides,

"[A] State . . . may not enact or enforce a law . . . related to

a price, route, or service of any motor carrier . . . with

respect to the transportation of property."    Pub. L. No. 103-

305, Title VI, § 601(c)(1), 108 Stat. 1606, codified as 49
                                                                    6

U.S.C. § 14501(c)(1) (2012).5   The judge concluded that this

provision preempts the State limitation on railroad-operated

motor vehicles in § 70A.

     "The critical question in any preemption analysis is always

whether Congress intended that [F]ederal [law] supersede [S]tate

law."    ACE Property & Cas. Ins. Co. v. Commissioner of Revenue,

437 Mass. 241, 246 (2002), quoting Archambault v. Archambault,

407 Mass. 559, 565 (1990).    See Altria Group, Inc. v. Good, 555
U.S. 70, 76 (2008), quoting Medtronic, Inc. v. Lohr, 518 U.S.
470, 485 (1996) ("'[t]he purpose of Congress is the ultimate

touchstone' in every pre-emption case").    Here, Congress

expressly stated that State law is preempted, but that "does not

immediately end the inquiry because the question of the

substance and scope of Congress' displacement of [S]tate law

still remains."   Altria Group, Inc., supra.    See Medtronic,

Inc., supra at 484, quoting Cipollone v. Liggett Group, Inc.,

505 U.S. 504, 517 (1992) ("we must nonetheless 'identify the

domain expressly pre-empted'").

     The preemptive scope of the act's preemption clause is

"purposefully expansive."    Massachusetts Delivery Ass'n v.

Coakley, 769 F.3d 11, 18 (1st Cir. 2014).      The act preempts

     5
       The preemption provision includes a variety of exceptions
not relevant here. See 49 U.S.C. § 14501(c)(2), (3) (exceptions
for State regulation relating to public safety; intrastate
transportation of household goods; certain towing companies; and
"standard transportation practices").
                                                                   7

State laws "'having a connection with, or reference to,' carrier

'rates, routes, or services,'" even if the "law's effect on

rates, routes, or services 'is only indirect,'" and irrespective

of "whether [the] law is 'consistent' or 'inconsistent' with

[F]ederal regulation" (emphasis in original).   Rowe v. New

Hampshire Motor Transp. Ass'n, 552 U.S. 364, 370 (2008), quoting

Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384, 386-

387 (1992).   See Massachusetts Delivery Ass'n, supra at 17-18.

Congress' purpose was to avoid "a State's direct substitution of

its own governmental commands for 'competitive market forces' in

determining (to a significant degree) the services that motor

carriers will provide."   Rowe, supra at 372, quoting Morales,

supra at 378.

    The provision of § 70A at issue here -- which provides that

railroad-operated motor vehicles "shall be operated only in

areas now served by" the railroad -- is directly "related to a

. . . route . . . of any motor carrier," 49 U.S.C.

§ 14501(c)(1), in that it prohibits some motor carriers from

servicing routes where they do not provide rail service.     The

provision also is "related to a . . . service of any motor

carrier," id., in that the route prohibition restricts the

trucking services that railroads can offer in the Commonwealth.

Because these restrictions limit a railroad's ability to compete

freely with other motor carriers, preemption of their
                                                                    8

enforcement would be consistent with Congress' purpose to let

"competitive market forces" determine what services motor

carriers provide.   Rowe, 552 U.S. at 372, quoting Morales, 504
U.S. at 378.

    The act, however, only preempts a State from enacting or

enforcing laws "related to a price, route, or service of any

motor carrier . . . with respect to the transportation of

property."   49 U.S.C. § 14501(c)(1) (emphasis added).   "Congress

did not define the word 'property.'   Nor is the meaning of

'property' perfectly clear from the context of the statute."

AGG Enters. v. Washington County, 281 F.3d 1324, 1329 (9th

Cir.), cert. denied, 537 U.S. 822 (2002).   The town offers two

reasons why the solid waste transported to the facility is not

"property" within the scope of § 14501(c)(1), and therefore why

§ 70A is not preempted with respect to the transportation of

waste.

    First, the town contends that it is plain from the

legislative history of the act that Congress did not intend to

preempt State regulation of the transportation of waste.      The

town specifically relies on the following passage from the

report of the conference committee that drafted the bill that

became the act:

    "The conferees further clarify that the motor carrier
    preemption provision does not preempt State regulation of
    garbage and refuse collectors. The managers have been
                                                                   9

    informed by the Department of Transportation that under
    [Interstate Commerce Commission (ICC)] case law, garbage
    and refuse are not considered 'property'. Thus, garbage
    collectors are not considered 'motor carriers of property'
    and are thus unaffected by this provision."

H.R. Conf. Rep. No. 103-677, 103d Cong., 2d Sess. 85 (1994).

Second, the town argues that the word "property" in

§ 14501(c)(1) should be read narrowly to avoid preempting the

"historically [S]tate-regulated field of waste disposal."

    We acknowledge that the regulation of local waste

collection is a traditional exercise of the States' police

powers.   See Wheeler v. Boston, 233 Mass. 275, 281 (1919) ("it

is within the well recognized limits of the police power" for

city to regulate who may collect garbage and refuse from public

streets).   And we presume that Congress did not intend to

preempt the regulation of local waste collection.     See ACE

Property & Cas. Ins. Co., 437 Mass. at 247, quoting Jones v.

Rath Packing Co., 430 U.S. 519, 525 (1977) ("[W]e start with the

assumption that the historic police powers of the States were

not to be superseded by the Federal Act unless that was the

clear and manifest purpose of Congress"); AGG Enters., 281 F.3d

at 1330 ("Congress'[s] intent not to preempt the area of solid

waste collection [by means of the act] is unambiguous" [emphasis

in original]).

    But the railroad-operated motor vehicle restriction in

§ 70A does not regulate local waste collection; it regulates the
                                                                   10

operation of motor vehicles by railroad companies "for the

transportation of freight," which is within the scope of the

State regulation that Congress did intend to preempt through the

act.    The prohibition in § 70A against a railroad corporation

operating trucks in areas not served by rail by that corporation

applies regardless of what is transported by those trucks; it is

not limited to trucks transporting waste.    Because § 70A would

prevent Bay Colony from transporting the town's waste solely

because it is a railroad without a rail line in the relevant

area (rather than because the freight being transported is

waste), § 70A does not implicate the public health interest

warranting local regulation of waste collection.   In short, the

act preempts enforcement of the railroad-owned motor vehicle

restriction in § 70A against Bay Colony, because the restriction

is an economic regulation relating to railroads and motor

carrier services rather than a public health regulation relating

to the transport of waste.

       Moreover, even if we were to accept the town's premise that

§ 70A could be preempted by the act only where "property" is

transported, it would still not spare § 70A from preemption in

the circumstances of this case.    Relying on ICC case law, the

conference committee interpreted § 14501(c)(1) of the act to

exclude "State regulation of garbage and refuse collectors" from
                                                                   11

the scope of preemption.     H.R. Conf. Rep. No. 103-677 at 85.6

Bay Colony, however, did not contract with the town for the

collection of garbage; rather, its contract was for the

transportation of garbage from the transfer station to the

facility after it had been collected.     Garbage left out for

collection may not be "property," because it has been abandoned

by its previous owner.   But once the garbage has been collected,

it becomes the property of the company that collected it,

especially where that garbage may have economic value, whether

for the recyclables contained within or, as here, because of the

potential energy that may be extracted from that garbage at a

waste-to-energy facility.7    As explained by one member of the

     6
       Prior to being abolished in 1995, the Interstate Commerce
Commission (ICC) had authority to regulate common carriers under
the Interstate Commerce Act. The Congress that enacted the
Federal Aviation Administration Authorization Act of 1994 (act)
recognized that the term "transportation of property" "had its
exact legal meaning refined over the years through" ICC case
law, and was "using the term 'transportation of property' [in
the act] consistent with its meaning in the Interstate Commerce
Act and the related precedents." 140 Cong. Rec. 29,402 (1994)
(statement of Rep. Norman Y. Mineta).
     7
       See Graham v. Town & Country Disposal of W. Mo., 865 F.
Supp. 2d 952, 956-959 (W.D. Mo. 2011) (upholding U.S. Department
of Transportation's assumption of jurisdiction over trash
collection business engaged in interstate transportation based
on "broad meaning" ascribed to "property" under ICC case law and
reasonableness of interpreting "property" to include waste);
Interstate Commerce Comm'n v. Browning-Ferris Indus., 529 F.
Supp. 287, 289-293 (N.D. Ala. 1981) (noting that the ICC "has
continually vacillated" over whether radioactive waste is
"property" despite its lack of economic value, but declining to
                                                                  12

Congress that enacted the act, the meaning of "property" under

ICC case law is "not so broad as to cover garbage collection" at

curbside, but it is "broad enough to cover . . . recyclables

being transported as part of a commercial transaction."    140

Cong. Rec. 29,402 (1994) (statement of Rep. Norman Y. Mineta).

In other words, as the saying goes, "One man's trash is another

man's treasure."8

     We therefore conclude that Congress intended to include

within the preemptive scope of the act the State regulation of a

railroad corporation's transportation by truck of a town's waste

from the transfer station to a waste-to-energy facility.

Accordingly, we conclude that the enforcement against Bay Colony

of the provision of § 70A limiting the operation of railroad-

operated motor vehicles to areas served by the railroad is

preempted by the act.   Consequently, the town's affirmative

defense that it was barred by § 70A from allowing Bay Colony to

transport its waste to the facility by truck after it lost its

rail lease fails as a matter of law.

uphold ICC jurisdiction over transportation of nonradioactive
hazardous waste with no potential for reuse or recycling).
     8
       Under the terms of the town's waste acquisition agreement
with SEMASS, the town pays a fee to SEMASS for the waste that
SEMASS accepts, but SEMASS pays a rebate to the town if the
average price per kilowatt hour that SEMASS receives for the
electrical energy generated from the town's waste at the
facility exceeds a certain amount. The agreement contemplates
that the rebate paid to the town by SEMASS could be greater than
the fees paid by the town to SEMASS.
                                                                     13

     2.    Compliance with the town's DEP permit.   As required by

State regulation, the town held a permit to operate its waste

transfer station that had been issued to the town by the DEP in

1991.9    The permit stated that "[t]he operation of the facility

shall be in strict accordance with the approved plan," which we

take to mean the "Manual of Operating Procedures" (manual) that

the town had submitted as part of the town's permit application.

The permit also stated that "[n]o deviation or modification

thereto shall occur without [DEP] approval."     The manual

specified that tractor-trailers would be used to transport waste

to the facility when Bay Colony "cannot move trains on a short-

term emergency basis."    It also specified that "[i]n the event

that Bay Colony cannot move trains on a long-term (greater than

48-hour) basis, all incoming trucks will be directed to deliver

their refuse directly to the SEMASS facility."

     In its motion for summary judgment, and again in its

motions for directed verdict and for judgment notwithstanding

the verdict, the town claimed that its refusal to allow Bay

Colony to transport the waste by truck after it lost its rail

lease did not constitute a breach of contract because the long-

     9
       The permit issued to the town by the DEP in 1990 was
titled "Final Permit/Authorization to Construct." In 1994, the
DEP sent a letter to the town regarding the waste transfer
station which "authorize[d] the operation" of the transfer
station, and further stated that "[s]aid operation shall be in
strict accordance with the terms of the permit."
                                                                   14

term trucking of waste was not in compliance with its DEP

operating permit and therefore would be in violation of law.

The judge agreed that the DEP permit did not permit Bay Colony

to truck the town's waste to the facility on a long-term basis,

but he determined that a factual dispute existed for the jury to

decide as to whether the permit reasonably could be amended

through an application to DEP for a permit modification.

    At trial, the judge correctly instructed the jury that

"there is an implied covenant of good faith and fair dealing in

every contract," and that the implied covenant "means that

neither party may do anything that will have the effect of

destroying or injuring the right of the other party to receive

the fruits of that contract."   See T.W. Nickerson, Inc. v. Fleet

Nat. Bank, 456 Mass. 562, 569-70 (2010), quoting Anthony's Pier

Four, Inc. v. HBC Assocs., 411 Mass. 451, 471-472 (1991).    The

judge also instructed that, if the town committed a breach of

the implied covenant, the town committed a breach of the

contract.   The judge instructed that the jury must determine

whether the town had an obligation under the implied covenant of

good faith and fair dealing to apply for a modification of the

DEP permit that would allow the long-term trucking of waste and,

if so, whether the failure to apply for that permit was a

violation of the implied covenant.   He also instructed the jury

that, for the town to establish a defense that it would have
                                                                  15

been illegal to allow Bay Colony to truck the waste based on the

limitations in the DEP permit, the town had the burden of

proving "that the modification of [the DEP] permit was beyond

the reasonable control of" the town.   The town did not request

that the jury answer a special verdict question regarding this

issue.   However, from the jury's special verdict finding that

the town committed a breach of its contract with Bay Colony, we

can infer that the jury found that, under the implied covenant

of good faith and fair dealing, the town was obliged after Bay

Colony lost its rail lease to make reasonable efforts to apply

for a modification of its DEP permit to allow for the long-term

trucking of waste and that it was not beyond the reasonable

control of the town to obtain such a modification.

    On appeal, the town argues that it was not obligated to

apply for a permit modification after Bay Colony lost its rail

line lease because the contract did not expressly contain such

an obligation, and because the implied covenant of good faith

and fair dealing cannot be invoked to "create rights and duties

not otherwise provided for in the existing contractual

relationship."   On the facts of this case, we disagree.   Section

9 of the contract gave Bay Colony the right to elect to

transport waste by truck if its rail lease were terminated.

Where the town's manual contained a provision prohibiting long-

term trucking of the town's waste to the facility, where the
                                                                  16

town (not the DEP) had originally written this provision, and

where the town could have applied to DEP for a permit

modification, it was permissible for the jury to find that the

town owed a duty under the implied covenant of good faith and

fair dealing to make a good faith effort to obtain a

modification of its DEP permit to allow Bay Colony to transport

the town's waste by truck after the town learned that Bay Colony

had elected this option under the contract.   Where the town made

no effort to obtain such a modification and made no mention of

the DEP permit prohibition until Bay Colony had filed suit for

breach of contract, a reasonable jury could have found that the

town had committed a breach of the implied covenant of good

faith and fair dealing and was using the DEP permit as a post-

hoc "pretext" for abandoning the contract.

    There was also abundant evidence at trial to support the

finding that the breach caused harm to Bay Colony because DEP

would have allowed the town's permit to be modified to permit

the trucking of waste if the town had sought such a

modification.   The section chief for the DEP's division of solid

waste management testified that obtaining a permit modification

can be a "straightforward" process.   He also testified that most

waste transfer stations in southeastern Massachusetts transport

their waste by truck, and that DEP does not in general have a
                                                                  17

problem with a transfer station transporting solid waste by

truck rather than by rail.10

     Therefore, we conclude that there was sufficient evidence

at trial to support the finding that the town's DEP permit did

not render Bay Colony legally unable to perform the contract

after it lost its rail lease, and that the jury reasonably

rejected this affirmative defense to the town's breach of

contract claim.

     3.   Duration of the contract.   In 1985, the town entered

into a waste acquisition agreement with SEMASS in which the town

agreed to deliver to the facility (and SEMASS agreed to accept)

certain quantities of solid waste each year.    Even though G. L.

c. 40, § 4 prohibited municipalities from entering into a

contract for "disposal of garbage, refuse and offal by

     10
       There was also evidence that the town believed it could
obtain a modification of its DEP permit to allow for the
trucking of waste. In 1995, the town represented to Bay Colony
that its solid waste could be trucked to the facility on a long-
term basis, when the town told Bay Colony that it wanted to
negotiate lower rates under the contract because "[r]ecent truck
handling proposals indicate trash could be hauled to SEMASS less
expensively over the road via trash trucks." The town made
similar representations publically in 2012 when it published a
"request for proposals" seeking a private operator of its
transfer station (to start in 2015), stating that "the
successful offeror will be allowed to accept delivery of [solid
waste] . . . for transfer to either rail or truck," and "may
seek a . . . permit modification to allow a truck to truck
transfer" of solid waste.
                                                                  18

incineration" for a period exceeding twenty years,11 the waste

acquisition agreement specified that it ran for twenty-three

years -- until January 1, 2008 -- and granted the town an option

to extend the agreement through January 1, 2015.   The twenty-

year limitation in § 4 was repealed in 1990, see St. 1989, c.

687, § 7, and on October 26, 2004, the town exercised its option

to extend the agreement to 2015.

     Section 7 of the contract between the town and Bay Colony

states that the term of the contract would "continue until the

expiration of [the t]own's [waste acquisition agreement] with

SEMASS."   The town argues that the contract terminated as a

matter of law on December 31, 2004, because when the waste

acquisition agreement became effective on January 1, 1985, § 4

prohibited municipalities from making contracts for the

"disposal of waste" for a period greater than twenty years.

     The flaw in the town's argument is that, even accepting the

town's claim that the original term of the waste acquisition

agreement only ran for twenty years, it would have remained

enforceable until December 31, 2004, and the town exercised its

     11
       In 1985, G. L. c. 40, § 4 stated that "[a] town may make
contracts for the exercise of its corporate powers including
. . . [f]or the disposal of its garbage, refuse and offal for a
period not exceeding five years; provided, however, that a
contract for the disposal of garbage, refuse, and offal by
incineration, by composting, in a sanitary land fill, or in any
other sanitary manner approved by the department of
environmental quality engineering, may be for a period not
exceeding twenty years."
                                                                  19

option to extend the original term of the waste acquisition

agreement to 2015 on October 26, 2004, before it would have

expired.   When the option was exercised, § 4 was no longer

effective, so no statute barred the continued enforceability of

the waste acquisition agreement to 2015.   There was sufficient

evidence to permit the jury reasonably to conclude that the

parties to the contract intended section 7 to mean that the

duration of the contract would be the same as the duration of

the waste acquisition agreement, including any extension of the

latter's duration permitted by that agreement.    Most telling,

the original draft of the contract provided for a twenty-year

term, but the town asked to revise that term because, as the

town stated in its letter to Bay Colony, the town wanted the

contract to "run for the same length (with time extension

abilities) as" the waste acquisition agreement.    Therefore,

there was sufficient evidence to permit the jury to conclude

that the contract remained in effect at the time of the town's

breach in 2008.

    Conclusion.    The judge did not err in concluding as a

matter of law that enforcement of G. L. c. 160, § 70A, against

Bay Colony would have been preempted by the act, and that Bay

Colony therefore would not have been acting in violation of an

enforceable State law if it transported the town's waste by

truck after it lost its rail lease.   There was sufficient
                                                                  20

evidence for a reasonable jury to reject the town's affirmative

defense that it could not allow Bay Colony to truck its waste

under its DEP permit, because the implied covenant and good

faith obligated the town to make a good faith effort to apply

for a modification of its permit and such a modification likely

would have been allowed if sought.   There was also sufficient

evidence to support the jury's implicit finding that the

contract remained in effect at the time of the town's breach.

For these reasons, the judgment against the town is affirmed.

                                     So ordered.