The Nature Conservancy v. Wilder Corp.. of Del.

• Decision Date: 01 September 2011
• Docket Number: No. 09–2988.,09–2988.
• Citation: 656 F.3d 646
• Parties: The NATURE CONSERVANCY, Plaintiff–Appellee,v.WILDER CORPORATION OF DELAWARE, Defendant–Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

656 F.3d 646

The NATURE CONSERVANCY, Plaintiff–Appellee,

v.WILDER CORPORATION OF DELAWARE, Defendant–Appellant.

No. 09–2988.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 1, 2010.Decided Sept. 1, 2011.

William R. Kohlhase (argued), Attorney, Miller, Hall & Triggs, Peoria, IL, for Plaintiff–Appellee.Craig L. Unrath (argued), Attorney, Heyl, Royster, Voelker & Allen, Peoria, IL, for Defendant–Appellant.Before ROVNER, WOOD and TINDER, Circuit Judges.ROVNER, Circuit Judge.

This case proves the maxim that, in appellate briefing, bluster is inversely proportional to merit. This diversity action is a simple breach of contract case seeking money damages, brought well within the applicable Illinois statute of limitations. The defendant contends that the action nevertheless should be barred by the equitable doctrine of laches. Unsupported by any case law in Illinois or the Seventh Circuit, the undeterred defendant concedes that it can produce no evidence in support of a key element of its defense: prejudice. The defendant attempts to fill the gaps in law and evidence with exaggerated outrage. The district court was not persuaded and neither are we. We affirm the district court's grant of summary judgment in favor of the plaintiff.

I.

In the spring of 2000, The Nature Conservancy (the “Conservancy”) purchased 6,660 acres of farmland from Wilder Corporation of Delaware (“Wilder”) for $16,350,000. Wilder had conducted agricultural operations on the land, and the Conservancy intended to use the property as a nature preserve. Following the sale, Wilder remained on the land as a tenant until the end of 2002, continuing its regular operations, which included raising 5,000 to 6,000 head of cattle. After Wilder vacated the premises, from 2003 through 2005, the Conservancy leased parts of the land to several other parties for growing corn, soybeans and hay.

The sales contract (“Contract”) required Wilder to remove from the property all rubbish, hazardous or toxic substances, petroleum contamination, and cattle sewage, among other things. As part of the Contract, Wilder provided certain representations and warranties regarding the property:

There have not been and there are not now any underground or aboveground storage tanks, septic tanks or wells located on or under the property or if there have been or are any such tanks or wells located on the property, their location has been disclosed to the Conservancy in writing, they have been properly registered with all appropriate authorities, they are in full compliance with all applicable statutes, ordinances and regulations, and they have not resulted in the release of any hazardous or toxic substance, material or waste into the environment.

R. 1–1, Ex. A, ¶ 15(d). The Contract also authorized the Conservancy to conduct an environmental inspection of the property. Prior to closing, the inspection revealed significant amounts of rubbish, trash, and toxic chemicals and substances. The Conservancy agreed to close on the sale prior to Wilder completing the cleanup. The parties signed a supplemental agreement (“Supplemental Agreement”) to account for the delay. Under the Supplemental Agreement, the Conservancy held back $75,000 of the purchase price to apply toward the cost of any cleanup that Wilder failed to perform by August 1, 2000.

The Conservancy sued Wilder in February 2006 in state court, charging that Wilder breached the warranty regarding storage tanks, failed to fulfill a number of the cleanup provisions and failed to pay real estate taxes during the lease period as agreed. Shortly thereafter, the suit was removed to federal court. In December 2007, the district court granted partial summary judgment to the Conservancy. The Court subsequently reopened discovery and allowed the Conservancy to amend its complaint to seek relief for additional areas of contamination discovered during the litigation. Specifically, the Conservancy had discovered petroleum-contaminated soil at the former site of an undisclosed aboveground storage tank in an area of the property the parties describe as “south of the Pump House.” The district court granted summary judgment in favor of the Conservancy on the additional claim relating to contamination south of the Pump House, and ultimately resolved all of the claims raised, for the most part in favor of the Conservancy.¹ In this appeal, Wilder challenges the judgment only with respect to the additional claim for contamination south of the Pump House.

II.

Our review of the district court's grant of summary judgment in favor of the Conservancy is de novo. Norman–Nunnery v. Madison Area Technical Coll., 625 F.3d 422, 428 (7th Cir.2010); Gunville v. Walker, 583 F.3d 979, 985 (7th Cir.2009). On appeal, Wilder contends that the breach of contract claim relating to the contamination south of the Pump House should be barred by the equitable doctrine of laches because the Conservancy raised the claim nearly seven years after performing an environmental inspection of the land and nearly five years after Wilder vacated the property. Wilder claims that the delay was unreasonable and inexcusable, and that it was materially prejudiced by the delay. According to Wilder, the Conservancy deprived Wilder of any opportunity to defend itself against the claim.

Under Illinois law, laches is “ ‘a neglect or omission to assert a right, taken in conjunction with a lapse of time of more or less duration, and other circumstances causing prejudice to an adverse party, as will operate to bar relief in equity.’ ” Sundance Homes, Inc. v. County of DuPage, 195 Ill.2d 257, 253 Ill.Dec. 806, 746 N.E.2d 254, 262 (2001) (quoting Meyers v. Kissner, 149 Ill.2d 1, 171 Ill.Dec. 484, 594 N.E.2d 336, 340 (1992)). “Laches is not simply a matter of delay, and to bar the action ‘it must appear that a plaintiff's unreasonable delay in asserting his rights has prejudiced and misled the defendant, or caused him to pursue a course different from what he would have otherwise taken.’ ” DeBruyn v. Elrod, 84 Ill.2d 128, 49 Ill.Dec. 559, 418 N.E.2d 413, 417 (1981) (quoting People ex rel. Casey v. Health & Hosps. Governing Comm'n of Ill., 69 Ill.2d 108, 12 Ill.Dec. 695, 370 N.E.2d 499, 502 (1977)). Illinois courts traditionally applied statutes of limitations in actions at law and the doctrine of laches in suits seeking equitable relief. Sundance Homes, 253 Ill.Dec. 806, 746 N.E.2d at 262–63. Over time, though, Illinois courts have begun to question the continuing relevance of the law-equity dichotomy, and the Illinois Supreme Court has noted that “ laches analysis is no longer mechanically applied to all actions denominated equitable, particularly where such an application would frustrate the intent of the legislature.” Sundance Homes, 253 Ill.Dec. 806, 746 N.E.2d at 263. As an example, the court noted that it had previously applied the five-year statute of limitations specified in 735 ILCS 5/13–205 to actions for constructive trusts, even though a constructive trust is considered an equitable remedy imposed by a court to prevent unjust enrichment. Sundance Homes, 253 Ill.Dec. 806, 746 N.E.2d at 263.

The Conservancy's claim against Wilder is for breach of contract and seeks only money damages. The applicable statute of limitations requires plaintiffs to bring such suits within ten years. See 735 ILCS 5/13–206. The Conservancy brought the suit well within the statutory period. Wilder nevertheless contends that the Conservancy's action should be barred by laches, and that Illinois courts sanction the use of this equitable doctrine in cases at law, even when there is an applicable statute of limitations. Wilder cites Maksym v. Loesch, 937 F.2d 1237, 1248 (7th Cir.1991), where we noted that Illinois courts have at times invoked laches to bar suits at law, and also to bar suits that had been brought within the statutory period. But we also observed in Maksym that every one of the Illinois cases declaring that laches applied to suits at law were really cases where the relief sought was quasi-equitable; none of the actions sought damages only. 937 F.2d at 1248. As for Illinois cases where courts invoked laches to bar suits that had been brought within the statutory period, we remarked that in those instances, the courts had used laches as a doctrine of estoppel rather than a substitute for a statute of limitations. Maksym, 937 F.2d at 1248. In the end, we found that laches could not apply to a suit for damages under Illinois law. Id.

Wilder claims that Illinois law has evolved after Maksym, and that Sundance Homes and a number of Illinois appellate court cases decided after Maksym demonstrate the viability of laches as a defense to a breach of contract claim seeking damages only. According to Wilder, Sundance Homes establishes that the Illinois Supreme Court is no longer concerned with the distinction between law and equity in determining whether a laches defense is appropriate in an action at law. Nothing in Sundance Homes supports Wilder's argument. On the contrary, Sundance Homes decried “artful pleading designed to cloak the cause in the attire of equity” in order to avoid relevant statutes of limitations that the legislature meant to apply. Sundance Homes, 253 Ill.Dec. 806, 746 N.E.2d at 269. The Sundance Homes court remarked that statutes of limitations necessarily reflected the legislature's balancing of competing interests:

Statutes of limitation and repose represent society's recognition that predictability and finality are desirable, indeed indispensable, elements of the orderly administration of justice that must be balanced against the right of every citizen to seek redress for a legally recognized wrong.

Sundance Homes, 253 Ill.Dec. 806, 746 N.E.2d at 260 (internal citations omitted). See also Peregrine Fin. Group, Inc. v. Futronix Trading, Ltd., 401 Ill.App.3d 659, 341 Ill.Dec. 147, 929 N.E.2d 1226, 1228 (2010) (noting that statutes of limitations are...