John McBride v. The State of Illinois et al.

OPINION

BIRNBAUM, J. This case is a claim for litigation expenses and attorney fees in the amount of $114,578.44 incurred in a prior administrative proceedings plus the costs of this action in the Court of Claims. The claim for fees is brought on the assertion by Claimant that the charges brought by the Illinois Environmental Protection Agency (hereinafter referred to as “IEPA”) against John McBride [*269] were without reasonable cause and found to be untrue. The facts and law follow below.

FACTS

On August 27, 1994, a two count Amended Complaint for sanctions against the Claimant, John McBride, (hereinafter referred to as “McBride” or “the Claimant”) was filed by IEPA in Cause No. EPA 526-94 arising from McBride’s contract to service and maintain compliance for the Wastewater Treatment Plant at the Village of Tilton, Illinois.

Count I of the Amended Complaint alleged that McBride improperly discharged sludge into the environment and then failed to report the discharge.

Count II of the Amended Complaint asserted that McBride disposed of sludge on agricultural land without an agency permit. The IEPA further alleged that the sludge disposal without a permit demonstrated gross misconduct by McBride subject to sanctions pursuant to the Illinois Administrative Code. Had the IEPA prevailed on these allegations, McBride’s Class I Wastewater Certificate would have been revoked and he would be precluded from reapplying for a period not to exceed four (4) years.

The evidence in this case is voluminous. The submitted evidence at a hearing before a Commissioner on January 8, 2003, consists of transcripts from testimony at the prior administrative hearing including the testimony of several experts, and the following Exhibits.

Joint Exhibits

Exhibit 1A - Transcript of hearing dated November 6, 1995 Exhibit 1B - Transcript of hearing dated November 8, 1995 Exhibit 9 - Testimony of Ron Ivall Exhibit 10 - Testimony of Carla Roseman Exhibit 11 - Public Distribution Information Sheet Exhibit 12 - IEPA Water Pollution Control Permit Exhibit 13 - Testimony and resume of John McBride Exhibit 14 - Summary of testimony of Robert Whitworth Exhibit 15 - Resume of Robert Whitworth Exhibit 16 - Testimony of Robert Miller Exhibit 16A - Operation of the Municipal Wastewater Treatment Plant Exhibit 17 - Resume of Robert Miller Exhibit 18 - Testimony of Dr. Talbert Eisenberg Exhibit 19 - Resume of Dr. Talbert Eisenberg Exhibit 20 - Testimony of Dr. David Schafer Exhibit 21 - Resume of Dr. David Schafer Exhibit 22 - Certificate of Award to Dr. David Schafer by the America Board of

Forensic Examiners

[*270] Exhibit 23 - Testimony of Emil Cook Exhibit 24 - Resume of Emil Cook

IEPA Exhibits

Exhibit 1 - Testimony of Joseph Koronkowski Exhibit 2 - Testimony of Eileen Cronin with attachments and six photographs Exhibit 3 - Design drawing for Phase I, revisions and additions to the Village of

Tilton Wastewater Treatment Plan

Exhibit 4 - Plans for sanitary sewage system and sewage treatment facilities for Tilton dated December 6, 1960 The underlying cause of the alleged sludge discharge into a tributary of the Vermillion River was a broken sprocket chain on the secondary clarifier at the Tilton Wastewater Treatment Plant. The IEPA asserted that McBride intentionally drained actual sludge off the secondary clarified through an old outfall into the water tributary. The IEPA also asserted that McBride failed to disclose the discharge. The IEPA further charged that McBride intentionally disposed of sludge on agricultural land without an IEPA permit. The findings and conclusions of the administrative proceedings dated January 27, 1997, (Joint Exhibit 14-N) were adopted by the IEPA Director (Joint Exhibit 15-O). The hearing officer ruled in favor of McBride due to insufficiency of evidence to prove the allegations. The findings and conclusions of the hearing officer are accepted by this tribunal.

With respect to the request for expenses and attorney fees which are at issue in the case at bar, it appears from the findings and conclusions (Joint Exhibit 14-N) that the Claimant was advised on page 9 of the ability to obtain attorney fees and costs through the Illinois Administrative Procedures Act. This fact is also referenced in the Report and Recommendation and final decision of IEPA Director (Joint Exhibit 13-M). The Director’s decision was filed on July 30, 1997. The Illinois Procedures Act provides that the party seeking litigation expenses should timely file a claim with the IEPA. However, the Claimant did not petition the IEPA until August 24, 2000. The IEPA denied the petition on procedural grounds due to the untimely nature of the Petition. This claim against IEPA and the State of Illinois followed.

THE LAW

A Petition for Litigation Expenses and Attorney Fees and Doctrine of

Laches

[*271] The Illinois Administrative Code requires the party seeking litigation expenses, including Attorney Fees, to make a demand directly to the state agency.

Further, IEPA 74 Illinois Administrative Code §790.60 provides in pertinent part as follows:

The Claimant shall before seeking final determination of his claim before the Court of Claims, exhaust all other remedies, whether administrative, legal or equitable, against all other sources of recovery for the injury or damages sought to be recovered by the claim.

It is clear from the record that McBride’s demand for litigation expenses and attorney fees was untimely since it was approximately three (3) years after the Director’s decision. Nonetheless, this Court denied Respondent’s Motion for Summary Judgment and ruled that the delay was not sufficient to deny the claim in this matter.

In additional to the Claimant’s omission with respect to a timely request to the IEPA for litigation expenses and attorney fees, the Respondent now asserts laches as a defense to the claim.

Laches is a defense that is asserted against a party who has knowingly slept on his rights and acquiesced for a great length of time, and its existence depends upon whether under all the circumstances of a particular case, a party is chargeable with want of due diligence and failing to institute proceedings before he or she did LaSalle Nat’l. Bank v. Dubin Residential Communities Corp., 337 Ill.App.3d 345, 351 (2003) citing Pyle v. Ferrell, 12 Ill.2d 547, 552 (1958). In determining the applicability of laches four factors should be considered (1) conduct on the part of the Defendant giving rise to the situation of which complaint is made and for which the Complainant seeks a remedy, (2) delay in asserting the Complainant’s rights, the Complainant having had notice or knowledge of Defendant’s conduct and the opportunity to institute a suit, (3) lack of knowledge or notice on the part of the Defendant that the Complainant would assert the right on which he bases his suit, and (4) injury or prejudice to the Defendant in the event relief is accorded to the Complainant or the suit is held not to be barred LaSalle Nat’l. Bank v. Dubin Residential Communities Corp., 337 Ill.App.3d 351 (2003), citing Slatin’s Properties, Inc. v. Hassler, 53 Ill.2d 325, 330 (1972), quoting Pyle, 12 Ill.2d at 535.

Applying this law to the facts of our case, including the fact that the parties stipulated to the record of the underlying administrative hearing with no new evidence introduced at the hearing before the Commissioner, this Court is of the view that the Respondent did not show prejudice or hardship caused by the passage of time. In other words, Respondent cannot demonstrate that the delay induced the IEPA to adversely change its position and incur some injury as a result of the three year delay.

[*272] Accordingly, neither the untimely filing of the Petition for Litigation Expenses and Attorney Fees in the underlying proceeding, nor the defense of laches in this case are sufficient to defeat McBride’s claim.

B Whether the IEPA allegations were without reasonable cause and found to be untrue Initially, it is noted that notwithstanding the hearing officer’s findings with respect to Court II of the Amended Complaint in the underlying administrative proceeding to the effect that McBride did not demonstrate gross misconduct through the inadvertent (emphasis added) application of sludge to agricultural land without a land application permit, the fact remains that sludge was applied to agricultural land without the necessary permit. Therefore, while the Claimant can state that the IEPA did not meet its burden of proof on Count II of the Amended Complaint in the Administrative hearing, it does not follow that the allegation by IEPA was without reasonable cause.

Concerning Count I of the IEPA’s Amended Complaint, McBride asserts that the IEPA’s conduct entitles him to a recovery of fees as a result of IEPA’s unreasonable pursuit of its claim. Regarding the recover of attorneys fees, this Court has stated in McHugh v. Golden, 45 Ill.Ct.Cl. 235, 240-41 (1992) as follows:

The statute at issue and under which the Claimant seeks relief has the following requirements:

1. There must be a contested case initiated by an agency that does not proceed to Court for judicial review, 2. There must be an allegation made by the agency without reasonable cause, 3. That allegation must be found to be untrue, and, 4. There must be no stipulation by the Claimant, which requires the Claimant to take corrective action or pay a monetary sum.

This Court further stated As a matter of statutory construction, it is axiomatic that statutes, which permit a recovery of attorney fees, are in [*273] derogation of the common law and must be strictly construed by the Court. (Department of Revenue v. Appellate Court (1977), 67 Ill.2d 392. When a statute can reasonably be interpreted so as to give effect to all of its provisions, a court will not adopt a strained reading, which renders one part superfluous as it is presumed that the legislature intended to give meaning to all the provisions of a statute.

In the present case, the Claimant chose to rely on the findings of the Administrative Hearing Officer and not to present any new evidence in this Court of Claims case.

This Court is not persuaded that the Claimant has proven by a preponderance of evidence all four requirements of the statute. Specifically, the Claimant has not proven that the allegations in Counts I and II of the Amended Complaint were made by IEPA without reasonable cause. A close review of the hearing officer’s findings reveals that IEPA did not meet its burden of proof in the underlying case, but the administrative hearing officer did not rule that the allegations were made by IEPA without reasonable cause. In fact, the hearing officer found that there was a discharge on February 12, 1993, but that the discharge was “essential maintenance” allowed by the State. Likewise, in the IEPA Director’s Notice of Entry of Final Order, the Director accepted the Administrative Hearing Officer’s recommendation for dismissal of the Amended Complaint due to “insufficiency of evidence” (emphasis added). For this reason, it cannot be said that the allegations in the Amended Complaint were without reasonable cause. Therefore, the Claimant did not meet his burden of proof.

ORDER

It follows that the Claim for litigation expenses and attorney fees is denied.

ORDER

BIRNBAUM, J. This matter is before the Court on Claimant’s Petition for Rehearing.

This Court entered an Order on October 17, 2006, denying Claimant’s request for litigation expenses and reasonable attorneys’ fees in the amount of $114,578.44 incurred in Claimant’s defense of charges brought against him by the Illinois Environmental Protection Agency (IEPA).

The standard by which this Court can award fees is set forth in 5 ILCS 100/10-55(a).

[*274] In any contested case initiated by any agency that does not proceed to court for judicial review and on any issue where a court does not have jurisdiction to make an award of litigation expenses under Section 2- 611 of the Civil Practice Law, any allegation made by the agency without reasonable cause and found to be untrue shall subject the agency making the allegation to the payment of the reasonable expenses, including attorney’s fees, actually incurred in defending against that allegation by the party against whom the case was initiated.

Thus, Claimant must show that the charges were brought by the IEPA without reasonable cause. The record established that the IEPA failed to meet its preponderance standard of proof on the two counts of the complaint. Failure to meet this standard does not equate to lack of reasonable cause. As this Court noted in its previous opinions, “the fact remains that sludge was applied to agricultural land without the necessary permit”.

Each of the issues raised in Claimant’s Petition for Rehearing have been previously addressed by the parties and considered by the Court.

Claimant’s Petition raises nothing new, nor does it direct the Court to any points “overlooked or misapprehended,” as required by 74 Ill.Adm.Code 790.220.

Accordingly, for the above reasons and those set forth in the Order of October 17, 2006, it is hereby ordered that said Petition for Rehearing is DENIED.