Town of New Chicago v. City of Lake Station Ex Rel. Lake Station Sanitary District
2010 Ind. App. LEXIS 2365
| Ind. Ct. App. | 2010Background
- In 1988 New Chicago and Lake Station entered an intermunicipal agreement to construct a gravity/interceptor sewer system and to bill New Chicago at the Gary Sanitary District (GSD) rate.
- The agreement required compliance with federal law, including the Clean Water Act (CWA), and mandated a system of user charges proportional to each user’s contribution.
- GSD raised its treatment rate in 1989; Lake Station did not inform New Chicago and continued billing at the old rate.
- GSD sued Lake Station in 1999 for the rate discrepancy; New Chicago was not notified of the suit.
- After Lake Station paid a multi-million-dollar judgment to GSD in 2005, Lake Station sought about $536,000 from New Chicago as New Chicago’s share of the judgment and interceptor costs.
- New Chicago defense included laches and equitable estoppel; the trial court granted partial summary judgment for Lake Station on liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there is a private right of action under the CWA | New Chicago | Lake Station | No private right of action under the CWA |
| Whether Lake Station can recover under breach of contract for New Chicago's failure to pay the higher GSD rate | New Chicago | Lake Station | Breach of contract remains viable; CWA cannot be used to enforce collection |
| Whether laches bars Lake Station's breach of contract claim | New Chicago | Lake Station | Laches not available to bar breach of contract claim |
| Whether equitable estoppel applies to prevent Lake Station from collecting New Chicago's share | New Chicago | Lake Station | Equitable estoppel applies; Lake Station estopped from collecting 1990–2004 charges |
Key Cases Cited
- Templeton Bd. of Sewer Comm'rs v. Am. Tissue Mills of Mass., Inc., 352 F.3d 33 (1st Cir. 2003) (no private CWA action; breach of contract analysis relevant)
- Middlesex County Sewerage Auth. v. Nat'l Sea Clammers Ass'n, 453 U.S. 1 (1981) (no private remedy implied under CWA due to comprehensive enforcement)
- Equicor Dev., Inc. v. Westfield-Washington Twp. Plan Comm'n, 758 N.E.2d 34 (Ind. 2001) (estoppel against government entities possible where duty to speak exists)
- SMDfund, Inc. v. Fort Wayne-Allen County Airport Auth., 831 N.E.2d 725 (Ind.2005) (laches as limitation on equitable relief; three elements required)
- Shafer v. Lambie, 667 N.E.2d 231 (Ind.Ct.App.1996) (estoppel elements and reliance standards discussed)
- Money Store Inv. Corp. v. Summers, 849 N.E.2d 544 (Ind.2006) (equitable estoppel framework and reliance requirements)
- Paramo v. Edwards, 563 N.E.2d 595 (Ind.1990) (constructive fraud/estoppel rationale in equity)
- City of New Albany v. Cotner, 919 N.E.2d 125 (Ind.Ct.App.2009) (estoppel against government entities where duty to speak exists)