The top picture shows a solid; the bottom shows a surface. Why do you want to work with surfaces when solids are so much better and easier?
But, you should be able to make this filet with the surface tools. Which fillet tool did you use? Which propagation option? There are the two little fillets that jog around the lip - are they tangent? Are the flat surfaces square to the axis and perpendicular to each other? Please attach a picture of the screen that shows how you are making this filet
Sorry for all the questions. I've found it's usually best to create the larger fillets first and then work down to the smallest. But that might not be best with that jog.
