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COA rules in favor of town on breach of contract claim

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The Indiana Court of Appeals reversed partial summary judgment to a city that collected a lower monthly bill rate than what was required for wastewater treatment from a town for 15 years and then sued to recover more than $500,000 it believed was owed to it. The city never informed the town the sewage treatment rate increased or that it was embroiled in a lawsuit over the matter.

The City of Lake Station and the Town of New Chicago entered into an intermunicipal agreement for the construction of an interceptor sewer system. Their wastewater was sent for treatment at the Gary Sanitary District. Lake Station billed New Chicago at the monthly rate set by GSD. Several years after this agreement was entered, the GSD tripled its rate. Lake Station protested, didn’t pay the increase, and never told New Chicago about the increase. New Chicago continued to pay the original rate until Lake Station filed a lawsuit to collect more than $500,000 following a judgment entered against Lake Station. The GSD sued Lake Station and won a judgment of more than $5.3 million against the city. Again, Lake Station didn’t inform New Chicago of the lawsuit.

The trial court granted partial summary judgment for Lake Station as to New Chicago’s liability and denied New Chicago’s motion for summary judgment. The trial court cited the Clean Water Act, which the two parties were subject to, as a reason for ruling in favor of Lake Station.

There is no private right of action under the CWA, ruled the Court of Appeals on interlocutory appeal in Town of New Chicago v. City of Lake Station, et al., No. 45A03-1001-PL-22. Lake Station cannot enforce the CWA because only the Environmental Protection Agency administrator can do so. As such, the trial court erred in granting summary judgment in favor of Lake Station based solely on the CWA, wrote Judge Nancy Vaidik.  

In examining Lake Station’s claim for breach of contract, the judges held laches isn’t available to New Chicago as a defense for the breach of contract claim, and it examined New Chicago’s equitable estoppel defense. They found New Chicago met the three elements of equitable estoppel. The town lacked the knowledge or the means of knowledge regarding the rate increase and litigation because there’s no issue of material fact that Lake Station didn’t notify New Chicago of the rate increase, that it refused to pay the increased rate, and that it continued to pay the old rate for more than 15 years.

New Chicago showed its reliance upon the conduct of Lake Station, the second element of equitable estoppel. It also showed the third element - that Lake Station’s conduct caused New Chicago to prejudicially change its position. If New Chicago was aware of the rate increases earlier, it could have taken measures to protect itself and its sewage customers, wrote Judge Vaidik.

It’s also true that in general, government entities aren’t subject to estoppel, but in certain situations application is appropriate, as was the case in Equicor Dev., Inc. v. Westfield-Washington Twp. Plan Commission, 758 N.E.2d 34, 39 (Ind. 2001).  

“Lake Station had a duty to bill New Chicago at the GSD rate (and not at a rate which it thought it should pay). Because Lake Station remained silent from 1989 to 2005, New Chicago reasonably believed that it was paying its proportionate share of the treatment charges at the proper GSD rate and the interceptor costs,” she wrote. “Like the Plan Commission in Equicor, Lake Station had ample opportunity (fifteen years in fact) to notify New Chicago of the increased rate. Yet Lake Station remained silent. Application of estoppel against Lake Station, a government entity, is appropriate in this case. Lake Station is thus estopped from collecting New Chicago’s proportionate share of the treatment charges and interceptor costs from 1990 to 2004.”

The judges reversed and remanded for summary judgment to be entered in favor of New Chicago on its equitable estoppel defense.
 

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  1. I will continue to pray that God keeps giving you the strength and courage to keep fighting for what is right and just so you are aware, you are an inspiration to those that are feeling weak and helpless as they are trying to figure out why evil keeps winning. God Bless.....

  2. Some are above the law in Indiana. Some lined up with Lodges have controlled power in the state since the 1920s when the Klan ruled Indiana. Consider the comments at this post and note the international h.q. in Indianapolis. http://www.theindianalawyer.com/human-trafficking-rising-in-indiana/PARAMS/article/42468. Brave journalists need to take this child torturing, above the law and antimarriage cult on just like The Globe courageously took on Cardinal Law. Are there any brave Hoosier journalists?

  3. I am nearing 66 years old..... I have no interest in contacting anyone. All I need to have is a nationality....a REAL Birthday...... the place U was born...... my soul will never be at peace. I have lived my life without identity.... if anyone can help me please contact me.

  4. This is the dissent discussed in the comment below. See comments on that story for an amazing discussion of likely judicial corruption of some kind, the rejection of the rule of law at the very least. http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774#comment

  5. That means much to me, thank you. My own communion, to which I came in my 30's from a protestant evangelical background, refuses to so affirm me, the Bishop's courtiers all saying, when it matters, that they defer to the state, and trust that the state would not be wrong as to me. (LIttle did I know that is the most common modernist catholic position on the state -- at least when the state acts consistent with the philosophy of the democrat party). I asked my RCC pastor to stand with me before the Examiners after they demanded that I disavow God's law on the record .... he refused, saying the Bishop would not allow it. I filed all of my file in the open in federal court so the Bishop's men could see what had been done ... they refused to look. (But the 7th Cir and federal judge Theresa Springmann gave me the honor of admission after so reading, even though ISC had denied me, rendering me a very rare bird). Such affirmation from a fellow believer as you have done here has been rare for me, and that dearth of solidarity, and the economic pain visited upon my wife and five children, have been the hardest part of the struggle. They did indeed banish me, for life, and so, in substance did the the Diocese, which treated me like a pariah, but thanks to this ezine ... and this is simply amazing to me .... because of this ezine I am not silenced. This ezine allowing us to speak to the corruption that the former chief "justice" left behind, yet embedded in his systems when he retired ... the openness to discuss that corruption (like that revealed in the recent whistleblowing dissent by courageous Justice David and fresh breath of air Chief Justice Rush,) is a great example of the First Amendment at work. I will not be silenced as long as this tree falling in the wood can be heard. The Hoosier Judiciary has deep seated problems, generational corruption, ideological corruption. Many cases demonstrate this. It must be spotlighted. The corrupted system has no hold on me now, none. I have survived their best shots. It is now my time to not be silent. To the Glory of God, and for the good of man's law. (It almost always works that way as to the true law, as I explained the bar examiners -- who refused to follow even their own statutory law and violated core organic law when banishing me for life -- actually revealing themselves to be lawless.)

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