fillet could not be added because specified radius would eliminate one of the elements...

I feel dumb asking this because it has to be a super elementary question...  Lets say, in a sketch, that I have a step down and each line is 1.000in.  If i make an inside fillet of .500 and then try to make and outside fillet of .500 I get the above error.  What gives?

SolidworksParts And Features