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No. 96-3730
Citation: 126 F.3d 1035Docket: 1035
Court: Court of Appeals for the Seventh Circuit; October 15, 1997; Federal Appellate Court
Robert Krilich and his associated corporations, developers near Chicago, faced legal action from the United States Environmental Protection Agency (EPA) for allegedly filling wetlands without a permit, violating the Clean Water Act. Following a 1992 consent decree, Krilich agreed to construct new wetlands, pay a $185,000 fine, and potentially incur daily penalties for delays. Due to noncompliance with the decree's timeline for a 3.1-acre wetland mitigation site at Royce Renaissance, the government sought enforcement, resulting in daily penalties totaling approximately $1.3 million. The consent decree outlined specific deadlines for various phases of the wetland construction, including excavation, grading, installation of a flow control structure, and planting, with penalties of $2,500 per day for missed deadlines. It included a force majeure provision, allowing for excuse from timely performance if delays were due to uncontrollable events, explicitly stating that economic changes would not qualify. Krilich was required to notify the EPA of any such events within three business days, and any disputes regarding this provision could be resolved through the court. The decree was noted as the complete agreement between the parties, stipulating that modifications must be in writing and no oral statements were binding. Krilich asserts that construction delays were caused by excessive rainfall in June and insufficient water runoff for wetland creation. However, June was after the May deadlines. The EPA maintained that the development must ensure adequate runoff for the wetland, emphasizing that the wetland design should dictate upland development. Krilich sought multiple extensions and alternative plans, which were eventually approved, but questions arose about the $2,500 daily penalty for failing to meet the consent decree's deadlines. Krilich argues that government actions modified the consent decree, but the government contends that modifications must be documented in writing, and no written changes were made. Krilich's attorney requested a deadline extension citing force majeure, but the EPA denied this and Krilich did not seek court intervention. The government consistently rejected deadline modifications, undermining Krilich's claims. Krilich also invokes Illinois law's doctrines of impossibility and frustration, arguing that unforeseen water shortages significantly altered the situation. However, he did not formally assert force majeure through the court as permitted by the decree. Finally, Krilich claims that the EPA's negotiations for a new construction design should equitably estop the agency from enforcing penalties, arguing that the EPA contributed to delays and should act fairly. Krilich faces significant challenges in attempting to estop the government, as established in Office of Personnel Management v. Richmond, where the Supreme Court reaffirmed that the government cannot be estopped like private litigants and will not be bound by an agent's erroneous statements unless those statements are within the agent's authority. Although the Court has not categorically ruled out estoppel against the government, it has reversed all estoppel findings it has reviewed. Despite deadlines not being met, EPA personnel collaborated with Krilich, but explicitly maintained that the deadlines remained in effect and penalties were accruing. Consequently, estoppel claims are deemed untenable. Krilich, an accomplished developer, entered a decree that provided avenues for modifying deadlines but failed to utilize them, leading to the decree being enforced by the district court. The government proposed a reduction in penalties, seeking them only for the period from May 15, 1993, to September 30, 1994, rather than extending to October 20, 1994, as initially calculated. The judgment for penalties is set at $1,257,500, with the case remanded for the entry of this adjusted judgment and no costs awarded for the appeal. The remaining aspects of the judgment are affirmed.