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People ex rel Ryan v. Environmental Waste Resources

November 19, 2002

THE PEOPLE OF THE STATE OF ILLINOIS, EX REL. JAMES E. RYAN, ATTORNEY GENERAL OF THE STATE OF ILLINOIS, AND LANCE R. PETERSON, STATE'S ATTORNEY OF GRUNDY COUNTY, ILLINOIS, PLAINTIFFS-APPELLEES,
v.
ENVIRONMENTAL WASTE RESOURCES, INC., A CONNECTICUT CORPORATION, DEFENDANT (UNITED PACIFIC INSURANCE COMPANY, A FOREIGN INSURANCE COMPANY, AND THE ESTATE OF FIORE F. D'ADDARIO, INTERVENORS-APPELLANTS).



Appeal from the Circuit Court of the 13th Judicial Circuit, Grundy County, Illinois No. 96-CH-16 Honorable Robert Marsaglia, Judge, Presiding

The opinion of the court was delivered by: Justice Holdridge

The plaintiff, the State of Illinois, requested a summary determination that the defendant, Environmental Waste Resources, Inc., (EWR) violated the closure and post-closure requirements of its operating permit when it ceased operations at its facility in Coal City, Illinois. Intervenor United Pacific Insurance Company (United Pacific) requested a judicial determination of its liability under its surety contract with EWR. The circuit court found that EWR was in violation of its permit. The court also determined that under the surety contract, United Pacific could either pay the penal sum amount of the bond or perform the closure and/or post-closure activities. The court stated that if United Pacific chose to perform on the bond, it would be required to pay the entire costs of performance, even if those costs exceeded the bond amount.

The intervenors-appellants, United Pacific and the estate of Fiore F. D'Addario (estate), appeal. They contend that: (1) the case is moot; (2) the State's claim was barred by the doctrine of laches; (3) the finding regarding closure and post-closure activities was made in violation of the automatic bankruptcy stay provision of the U.S. Code (11 U.S.C. §362(a)(1) (1988)); (4) the finding regarding closure and post-closure activities was barred by factual issues; (5) the court's determination of United Pacific's liability, as surety, for environmental clean-up costs of the defendant was error; and (6) United Pacific should be completely discharged from liability on this matter. After careful consideration, we affirm in part and reverse in part.

I. Background

EWR operated a hazardous waste disposal facility in Coal City, Illinois. In July 1997, EWR filed for bankruptcy in the United States Bankruptcy Court in Connecticut. In March 1998, the bankruptcy estate formally abandoned the Coal City facility. EWR's counsel withdrew from this litigation in September 1998, and EWR has been unrepresented ever since.

EWR is owned by Ridan Corporation, which has also filed for bankruptcy. Prior to his death, Fiore F. D'Addario was the owner of Ridan Corporation. At approximately the same time that EWR filed for bankruptcy, the estate became the grantor of a trust created to facilitate closure of the Coal City facility.

United Pacific issued a surety bond to EWR in March 1993 to secure its closure and post-closure obligations, pursuant to the environmental regulations of the State of Illinois.

II. Facts

EWR operated its facility pursuant to an operating permit issued by the Illinois Environmental Protection Agency (IEPA). Under the terms of the permit, if EWR closed the facility, it was required to comply with a detailed list of closure activities within 180 days of the closure. Additional post-closure monitoring requirements were also detailed in the permit.

Prior to 1996, EWR was cited for various environmental violations. In 1996, there was a fire at EWR's facility. Shortly after the fire, the State filed a complaint against EWR alleging various environmental violations.

In October 1996, EWR ceased accepting waste at the facility. In February 1998, the IEPA requested that the United States Environmental Protection Agency (USEPA) take action at the facility under its authority pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601 et seq. (1982)).

In September 1998, the State filed a "Motion for Finding," requesting a judicial determination that EWR was not in compliance with the closure and post-closure requirements of its permit. Shortly after the State's filing, the estate and United Pacific filed motions to intervene, which were granted. The record reveals correspondence between the State and the intervenors between 1996 and 2000, including discovery requests.

The USEPA completed removal of waste from the facility in September 1999. In February 2000, the State renewed its "Motion for Finding" and again requested that the court find that EWR had failed to perform closure and post-closure activities as required by its permit. In October 2000, the estate and United Pacific, as intervenors, filed a motion to strike the State's motion and to dismiss the complaint.

United Pacific also filed a motion for summary determination of its liability under the surety contract with EWR. It asked the court to determine whether, if it chose to perform closure and/or post-closure activities as permitted by the contract, it would be liable for the total ...


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