United States District Court, N.D. Illinois, Eastern Division
HONORABLE MARVIN E. ASPEN UNITED STATES DISTRICT JUDGE
matter is before us on Plaintiff JMS Development
Company's (“JMS”) objections to Magistrate
Judge Finnegan's December 9, 2019 Report and
Recommendation (“R&R”) as to Defendants'
Bulk Petroleum Corporation, et al.'s (collectively,
“Bulk”) Motion Determining Unresolved Invoice
Objections. (R&R (Dkt. No. 345); R&R Objections (Dkt.
No. 346); Motion (Dkt. No. 321).) JMS's objects only to
Magistrate Judge Finnegan's recommendation that it be
required to reimburse Bulk in the amount of $186, 751.09.
(R&R Objections (Dkt. No. 346) at 1.) For the reasons
explained below, we overrule JMS's objections and adopt
Magistrate Judge Finnegan's R&R.
case dates to June 1995. In the Complaint, JMS alleged that
Bulk's petroleum storage tanks polluted JMS's
property. (Compl. (Dkt. No. 1) ¶¶ 19-23.) Then in
1997 we approved an agreed-to consent decree of the parties
and dismissed the case. (See, e.g., Order (Dkt. No.
60); Consent Decree (Dkt. No. 62).) Among other things, the
Consent Decree required Bulk, at its sole cost and expense,
to use its best efforts to clean-up JMS's property and to
achieve administrative closure of it with the Illinois
Environmental Protection Agency (“IEPA”) with a
reasonable timeframe. (Consent Decree (Dkt. No. 62).) We
referred post-decree enforcement matters to Magistrate Judge
Arlander Keys (ret.). (Dkt. No. 64.) Due to years of
Bulk's delays, Magistrate Judge Arlander Keys (ret.)
issued a Memorandum Opinion and Order on June 15, 2001 that
recommended “JMS be allowed to obtain administrative
closure of the property . . . and charge all ensuing expenses
directly to [Bulk] . . ..” JMS Dev. Co. v. Bulk
Petroleum Corp., No. 95-CV-3275, 2001 WL 686676, at *6
(N.D. Ill. June 15, 2001) (June 14, 2001 Order (Dkt. No. 104)
at 19.) We adopted that recommendation with certain
modifications. No. 95-CV-3275, 2002 WL 252457 (N.D. Ill. Feb.
20, 2002). (February 19, 2002 Order (Dkt. No. 126) at 2.)
Judge Keys outlined the terms of that arrangement in a
separate Memorandum Opinion and Order dubbed the
“Escrow Order.” JMS Dev. Co. v. Bulk
Petroleum Corp., No. 95-CV-3275, 2002 WL 1303129, at *5
(N.D. Ill. June 13, 2002). (Escrow Order (Dkt. No. 151 at 2.)
The Escrow Order tweaked how the parties were to comply with
the Consent Decree. (Escrow Order (Dkt. No. 151).) Relevant
to the instant dispute, the Escrow Order provides that JMS
would take over the clean-up process on its own property
(and, as necessary, the adjacent gas station property), and
required Bulk to advance the anticipated cost of the cleanup
with funds placed in an escrow account. (See id.)
Per that Escrow Order, JMS faced the possibility of having to
reimburse Bulk for any amount inappropriately paid out to
contractors. JMS Dev. Co., 2002 WL 1303129 at *7.
Moreover, the Escrow Order stated that although it is not
JMS's burden to guarantee the IEPA's reimbursement of
the remediation costs, JMS was required to use its
“best efforts” to help obtain reimbursement from
the IEPA. See Id. at *8.
the time that escrow account was created, Bulk filed an
amended motion to stay remediation. (Dkt. No. 166). Bulk
reasoned that it required a stay so that JMS could obtain
pre-approval of a Corrective Action Plan (“CAP”)
from the IEPA. Bulk opposed that motion to stay and argued
that CAP pre-approval was not necessary because JMS could
incorporate the remediation work into an approved CAP at a
later date. (Dkt. No. 168.) Magistrate Judge Keys denied that
motion to stay and ordered JMS to cooperate with Bulk's
attempt to recover reimbursement from IEPA for the cost of
remediation. (Dkt. No. 167.) Bulk had deposited more than
$400, 000 into an escrow account. (See, e.g., Dkt.
No. 213 ¶ 3.) Then, in March 2007, the IEPA rejected the
entire reimbursement amount on the grounds that supporting
documentation of a CAP was not provided. (See Dkt.
No. 220 ¶ 5 (citing March 2007 IEPA
review Magistrate Judge Finnegan's R&R de
novo as the underlying Motion for an Order Determining
Unresolved Invoice Objections is best characterized as a
dispositive motion. Fed.R.Civ.P. 72(b)(3). Arguments not made
before a magistrate judge are waived and “district
courts should not consider arguments not raised initially
before the magistrate judge, even though their review in
cases . . . is de novo.” United States v.
Melgar, 227 F.3d 1038, 1040 (7th Cir. 2000).
motion sought to recover a total of $328, 207 from JMS under
the Escrow Order, including $186, 751.09 for costs not
incorporated into an approved CAP. Magistrate Judge Finnegan
recommended that JMS be required to reimburse bulk in the
amount of $186, 751.09 for costs not incorporated into an
approved CAP. JMS objects to Magistrate Judge Finnegan's
recommendation. (R&R Objections (Dkt. No. 346) at 1.)
IEPA's Brian Bauer testified that any expense or cost not
associated with an approved CAP would not be reimbursed.
(Bauer Dep. (Dkt. No. 341-30) at 5.) JMS did not use its best
efforts to incorporate this work into a CAP that was approved
by the IEPA. This inevitably meant that the IEPA would not
reimburse that work. So, Bulk seeks to recover $186, 751.09
for soil remediation work for which the IEPA did not
holding mirrors Magistrate Judge Finnegan's thorough
reasoning on this point as set forth in her Report and
Recommendation. In short, JMS had a duty to use its best
efforts to help Bulk obtain reimbursement and JMS failed to
live up to its obligation to do that. As a result, Bulk
incurred an additional $186, 751.09 in costs. We adopt
Magistrate Judge Finnegan's R&R (R&R (Dkt. No.
345) at 28-33) and order JMS refund Bulk $186, 751.09.
foregoing reasons, we find that JMS did not fulfil its Escrow
Order obligations with respect to certain costs that were not
incorporated into an approved CAP, and thus not reimbursed by
the IEPA. We adopt Magistrate Judge ...