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PROGRESS DEVELOPMENT CORPORATION v. MITCHELL

March 4, 1960

PROGRESS DEVELOPMENT CORPORATION, A CORPORATION, AND MODERN COMMUNITY DEVELOPERS, INC., A CORPORATION, PLAINTIFFS,
v.
JAMES C. MITCHELL ET AL., DEFENDANTS.



The opinion of the court was delivered by: Perry, District Judge.

        In this proceeding, plaintiffs complain that the defendant officials of the Village of Deerfield and of the Deerfield Park District, acting under color of law and using their offices as a cloak, have conspired with the other named defendants and have violated the civil rights of the plaintiffs contrary to the provisions of the Fourteenth Amendment to the Constitution of the United States and contrary to the provisions of Title 42, Sections 1981, 1982, 1983, 1985 and 1988 of the U.S.C.A. They bring their action pursuant to 28 U.S.C. § 1331.

The section of the Fourteenth Amendment relied upon provides as follows:

    "Section 1. All persons born or naturalized in
  the United States, and subject to the
  jurisdiction thereof, are citizens of the United
  States and of the State wherein they reside. No
  State shall make or enforce any law which shall
  abridge the privileges or immunities of citizens
  of the United States; nor shall any State deprive
  any person of life, liberty, or property, without
  the due process of law; nor deny to any person
  within its jurisdiction the equal protection of
  the laws."
  The statutes relied upon provide as follows:

"§ 1981. Equal rights under the law

    "All persons within the jurisdiction of the
  United States shall have the same right in every
  State and Territory to make and enforce
  contracts, to sue, be parties, give evidence, and
  to the full and equal benefit of all laws and
  proceedings for the security of persons and
  property as is enjoyed by white citizens, and
  shall be subject to like punishment, pains,
  penalties, taxes, licenses, and exactions of
  every kind, and to no other. R.S. § 1977."

"§ 1982. Property rights of citizens

    "All citizens of the United States shall have
  the same right, in every State and Territory, as
  is enjoyed by white citizens thereof to inherit,
  purchase, lease, sell, hold, and convey real and
  personal property. R.S. § 1978."

"§ 1983. Civil Action for deprivation of rights

    "Every person who, under color of any statute,
  ordinance, regulation, custom, or usage, of any
  State or Territory, subjects, or causes to be
  subjected, any citizen of the United States or
  other person within the jurisdiction thereof to
  the deprivation of any rights, privileges, or
  immunities secured by the Constitution and laws,
  shall be liable to the party injured in an action
  at law, suit in equity, or other proper
  proceeding for redress. R.S. § 1979."
    "§ 1985. Conspiracy to interfere with civil
  rights — Preventing officer from performing duties
    "(3) If two or more persons in any State or
  Territory conspire or go in disguise on the
  highway or on the premises of another, for the
  purpose of depriving, either directly or
  indirectly, any person or class of persons of the
  equal protection of the laws, or of equal
  privileges and immunities under the laws; or for
  the purpose of preventing or hindering the
  constituted authorities of any State or Territory
  from giving or securing to all persons within
  such State or Territory the equal protection of
  the laws; or if two or more persons conspire to
  prevent by force, intimidation, or threat, any
  citizen who is lawfully entitled to vote, from
  giving his support or advocacy in a legal manner,
  toward or in favor of the election of any
  lawfully qualified person as an elector for
  President or Vice President, or as a Member of
  Congress of the United States; or to injure any
  citizen in person or property on account of such
  support or advocacy; in any case of conspiracy
  set forth in this section, if one or more persons
  engaged therein do, or cause to be done, any act
  in furtherance of the object of such conspiracy,
  whereby another is injured in his person or
  property, or deprived of having and exercising
  any right or privilege of a citizen of the United
  States, the party so injured or deprived may have
  an action for the recovery of damages, occasioned
  by such injury or deprivation, against any one or
  more of the conspirators. R.S. § 1980."
    "§ 1988. Proceedings in vindication of civil
  rights
    "The jurisdiction in civil and criminal matters
  conferred on the district courts by the
  provisions of this chapter and Title 18, for the
  protection of all persons in the United States in
  their civil rights, and for their vindication,
  shall be exercised and enforced in conformity
  with the laws of the United States, so far as
  such laws are suitable to carry the same into
  effect; but in all cases where they are not
  adapted to the object, or are deficient in the
  provisions necessary to furnish suitable remedies
  and punish offenses against law, the common law,
  as

  modified and changed by the constitution and
  statutes of the State wherein the court having
  jurisdiction of such civil or criminal cause is
  held, so far as the same is not inconsistent with
  the Constitution and laws of the United States,
  shall be extended to and govern the said courts
  in the trial and disposition of the cause, and,
  if it is of a criminal nature, in the infliction
  of punishment on the party found guilty."

The verified complaint, as amended, is divided into three counts. Count I names as defendants the Deerfield Park District and the individuals constituting the Board of the Deerfield Park District, namely, James C. Mitchell, President, and Dudley L. Dewey, Edward J. Walchli, Donald W. Keller, and Aksel Petersen, members thereof, and seeks a temporary injunction pendente lite with the prayer that such injunction be made permanent upon final hearing. (See para. 39 of summarization of allegations of complaint, post.)

Count II names as defendants the Village of Deerfield and the individuals constituting the Board of Trustees of said Village, namely, Joseph Koss, President, and Winston Porter, Harold L. Peterson, John Aberson, Maurice Petesch, and Arno Wehle, members thereof, and seeks a temporary injunction pendente lite with the prayer that such injunction be made permanent upon final hearing. (See para. 40 of summarization of allegations of complaint, post.)

Count III, a conspiracy count, names all of the foregoing as defendants (except the Deerfield Park District and the Village of Deerfield) and, in addition thereto, ten other individual defendants, namely, Joseph G. Powell, Andrew G. Bradt, Harold C. Lewis, Herbert H. Garbrecht, Hal A. Petit, Robert D. Rierson, Robert G. Mullen, Leonard Bronstein, David J. Maundrell and Frank M. Blake. Plaintiffs seek damages in the sum of $750,000.

The plaintiffs having served notice upon counsel for the individual defendants named in Counts I and II, moved the court for a restraining order against the defendants named in each of those counts and for a hearing date upon a motion for a preliminary injunction in each instance. Deerfield Park District and the Village of Deerfield were not then parties defendant and so were not served. Counsel for the individual defendants appeared but no testimony was heard. The court heard oral argument, considered the verified complaint and thereupon denied the motion for a restraining order against the individual defendants, who are described as President and members of the Deerfield Park District, upon the allegations of Count I.

The court, however, granted plaintiffs' motion for a restraining order against the President and members of the Board of Trustees of the Village, in their individual capacities, upon the allegations of Count II. The court fixed bond for $1,000 which the plaintiffs made and which was approved. Thereupon the court entered a restraining order upon the allegations of Count II, enjoining said individual defendants from enforcing the building code of the Village of Deerfield in any discriminatory, arbitrary or capricious manner against plaintiffs until further order of court, specifically providing, however, that the defendants were in no way restrained from lawfully enforcing said building code, all of which is more fully set forth in the order of this court entered on December 22, 1959.

The court fixed December 29, 1959, as the date for hearings. They were not completed on that date and the restraining order was continued in force until January 6, 1960, on which date said order expired by its own limitation. The court was without jurisdiction to extend such order again. Without further order of court, the parties proceeded to present evidence until hearings were completed on January 28, 1960, although final arguments were not completed until February 4, 1960.

Immediately thereafter, the court began taking evidence upon the allegations of Count I, and on January 28, 1960, concluded evidence thereon although final argument was not concluded until February 4, 1960, upon which date the court took its decision thereon under advisement and has so retained it until this time.

The defendants named in Count II filed a motion to dissolve the restraining order originally entered. The court heard argument thereon and orally announced an intention to deny the motion but retained it under advisement. Since that time, the court, still retaining the matter under advisement, has heard evidence thereon which has caused it to reconsider its orally announced intention to deny the motion. Among other things, it was brought out that plaintiff was in violation of the Deerfield Building Code when this suit was filed and therefore did not come into court with clean hands.

The defendants named in Count II also filed a motion for a summary judgment and that motion was taken with the case.

All defendants joined in various motions to dismiss the whole complaint, including Count III. The motions were supported by affidavits under oath. Plaintiffs' counsel stated in open court that one of the motions and affidavits did not completely speak the truth. The court thereupon gave leave to plaintiffs to answer the motions and to file counter-affidavits but the plaintiffs failed to file any answer to said motions or any counter-affidavits or response thereto whatsoever.

At the conclusion of evidence upon Counts I and II, the court heard testimony from plaintiffs and defendants upon the said motions to dismiss Count III and the complaint as a whole. Those motions were taken under advisement.

It became apparent to the court at the outset of these proceedings that while the three counts of the complaint, in effect, set forth three suits, much time and effort would be saved if all the parties named in each of the counts were present at all hearings — with full right of cross-examination of all the parties — and if the evidence taken on the hearing of each motion was included in the consideration of every other motion.

It was so ordered and accordingly the hearings proceeded without objections from any of the parties at any time during or since the hearings were concluded.

For purposes of brevity, plaintiff Progress Development Corporation will hereinafter be referred to as "Progress"; plaintiff Modern Community Developers, Inc., as "Modern"; defendant Deerfield Park District as "Park District"; defendant Village of Deerfield as "Village"; Board of Deerfield Park District as "Park Board"; Board of Trustees of the Village of Deerfield as "Village Board".

Inasmuch as it was solely on the verified complaint herein, and without the taking of evidence, that the court granted plaintiffs' motion for a restraining order (on the allegations of Count II) and denied plaintiffs' similar motion (on the allegations of Count I), a summarization of the allegations of that complaint appears appropriate at this point:

1.  Progress is an Illinois corporation duly organized to
purchase and subdivide land, construct residences thereon and
to sell the same in the ordinary course of business.
2.  In April, 1959, and at subsequent dates, Progress
entered into purchase agreements for two tracts of vacant
land, suitable for subdivision and located in Deerfield, Lake
County, Illinois.
3.  Thereafter it surveyed, platted and subdivided said
vacant tracts of land into two subdivisions — one known as
Floral Park Subdivision (containing

about 15 acres) and the other known as Weinrib's Pear Tree
Subdivision (containing about 7 acres).
4.  On July 8, 1959, the plat of the Floral Park Subdivision
was approved by the Village Board, which is the governing
authority of Deerfield, and on July 31, 1959, it was recorded
with the Recorder of Deeds for Lake County, Illinois. The plat
provides for 39 lots for residences.
5.  On September 16, 1959, the plat for Weinrib's Pear Tree
Subdivision was approved by the Village Board and on September
18, 1959, it was recorded with the Recorder of Deeds for Lake
County, Illinois. That plat provides for 12 lots for
residences.
6.  Progress, relying upon the Village Board's approval of
the plat for the Floral Park Subdivision, employed a licensed
engineer to prepare plans and specifications for underground
water and sewer improvements and street improvements in that
subdivision. These plans having been presented to and approved
by the Village Board, Progress spent $30,000 in making the
improvements and further obligated itself on an $80,000 surety
improvement bond, likewise approved by the Village Board.
7.  Progress has likewise obligated itself upon a $26,000
surety improvement bond for improvements in Weinrib's Pear
Tree Subdivision, which bond was also approved by the Village
Board.
8.  On September 21 and 22, 1959, Progress presented to
Deerfield's Building Commissioner plans and specifications for
the construction of two model homes to be constructed and
located at 911 and 921 Wilmot Road in Deerfield. Both sets of
plans were approved by Deerfield officials, building permits
were issued and Progress had the foundations laid, outside
framework and roofs constructed, and other work in progress
prior to November 11, 1959. The value of the two houses will
be $30,000 for each one when completed.
9.  Progress has contractually obligated itself for
additional large sums of money for engineers, architects,
contractors, materialmen, legal and other expenses.

10. The present fair market value of the Floral Park and Pear Tree land is in excess of $250,000.

11. Modern is a corporation organized and doing business in the State of New Jersey and its principal purpose is investments by purchase of shares of stock in such corporations as Progress which are engaged in the acquisition and development of residential subdivisions and in the construction and sale of residential housing therein. Modern owns shares in such corporations in the States of Connecticut, Delaware, Illinois, New Jersey, New York and Pennsylvania.

12. Modern owns one hundred per cent of the stock of Progress.

13. Both Modern and Progress have adopted and are following a policy of building homes that are available for purchase by Negroes and members of other minority groups as well as by persons who are members of the Caucasian race. Until November 11, 1959, this policy was not known to anyone in Deer-field.

14. There are no Negroes residing in Deerfield.

15. At all times prior to November 11, 1959, Progress had conformed to all of Deerfield's building code requirements and had likewise conformed to all of such building code requirements to the date of the filing of this complaint. It has acted in good faith and was not then and has not since then been in violation of any of Deerfield's building code requirements.

17. All of the aforesaid conduct was but a part of a scheme between the above named defendants and certain other defendants to impede, delay, harass and stop plaintiffs from constructing and selling houses to Negroes.

18. All of the aforesaid defendants and all of the other defendants named in the complaint had numerous conferences between themselves and others and held numerous meetings at which they conspired to devise a plan to injure the plaintiffs and to deprive them of their rights.

19. During the period between November 11, 1959 and November 17, 1959, the above named defendants and the members of the Park Board and certain other defendants conspired and confederated together for a plan to be presented to the Park Board on November 17, 1959, which plan had as its purpose injury to plaintiffs as set forth in the complaint. The Park District covers an area approximately co-terminous with that of the Village.

20. There was in existence in Deerfield an organization known as the "Deerfield Citizens Committee" of which defendant Joseph G. Powell is President. A sub-committee of that Committee is known as the "Village Caucus Advisory Committee" and its chairman is defendant Andrew G. Bradt.

21. Some time during this period there was formed an organization known as the "North Shore Residents' Association." The exact time of its organization is unknown but its officers became known on November 24, 1959, and the same individuals, together with many others whose names are unknown to the plaintiffs, were active in the unlawful conspiracy against the plaintiffs at all times after November 11, 1959. Defendant Harold C. Lewis is a member of and chairman of the "North Shore Residents' Association"; defendant Herbert H. Garbrecht is a member of and vice-chairman of said group, and defendants Hal A. Petit, Robert D. Rierson, Robert G. Mullen, Leonard Bronstein, David J. Maundrell and Frank M. Blake are members and directors of the "Residents' Association". At a meeting held on November 18, 1959, and at all other public meetings thereafter, defendant Harold C. Lewis and various other persons announced that a plan would be devised to prevent Progress Development Corporation from completing its project of constructing and selling houses to Negroes.

22. At a meeting of the Park Board held on November 17, 1959, certain of these defendants requested the Board to take steps to acquire, for park purposes, the two subdivisions owned by Progress. During the course of the meeting, defendant Joseph G. Powell announced that he would contact certain civic groups to make a study of the needs of the Park District. Prior to this Park Board meeting, defendant Harold C. Lewis and others had already planned to conduct a poll in Deerfield to determine the public sentiment in Deerfield for or against plaintiffs' plan to build and sell houses without restricting sales to persons of the Caucasian race. All of the defendants were fully aware that the poll was to be taken on December 6, 1959. The defendants who are President and members of the Park Board then adjourned the meeting of November 17, 1959 to December 7, 1959 for the purported purpose of studying the reports that would then be made by civic groups upon park needs, but actually for the purpose of aiding the conspiracy by giving time for the defendants to take the aforesaid poll and to further arouse opposition to the plaintiffs in Deerfield.

23. Immediately thereafter the defendants who are the President and Trustees of the Village met, namely, on November 18, 1959, and again on November 23 and 24, 1959. The public was invited. The meetings were noisy and disorderly and the lawful plan of plaintiffs to sell some of its houses to Negroes was denounced as "totalitarian", and a "forcing" of Negroes and other non-Caucasians upon the Village. Many inflammatory statements were made at the meetings. Other public meetings were held at the American Legion Hall at which the same speeches were made by defendant Harold C. Lewis and other defendants and by other persons whose names are unknown to plaintiffs.

24. Numerous secret meetings were held in private homes by the defendants and a purported report and recommendation of park needs was prepared which was solely for the purpose of giving an air of legitimacy and color of law to any action the Park Board might take to acquire the property of Progress by condemnation proceedings. The said purported report was a six-page document labelled a "comprehensive study," and covered such broad subjects as "Relationships Between Governmental Bodies," "Village Objectives," "Traffic and Parking," "Zoning," "Water and Sewers," "Expansion of Village Boundaries," "School Objectives," "School Consolidation" "School Facilities," "Park Objectives," "Park-School Site Program," "Major Park-Sites," "Park District Boundaries," and "Recommendations." There was in fact no such study made. The so-called report included other sites strategically situated throughout Deerfield and recommended the acquisition of these sites, as well as the property owned by Progress. A further purpose of said purported "Report" and "Recommendation" was for the purpose of influencing public support of any program that the Park Board might undertake.

25. At their meeting of November 17, 1959, the defendant members of the Park Board were informed that defendant Harold C. Lewis and others intended to conduct a poll of the Village on or about December 6, 1959. The meeting was adjourned to December 7, 1959. The true purpose of that adjournment was to await the outcome of such poll. When the President and members of the Park Board met on December 7, 1959, they adopted resolutions designating Floral Park and Weinrib's Pear Tree Subdivisions as park sites and ordered that those subdivisions be acquired by condemnation proceedings for park purposes. (An exhibit attached to the Complaint mentions an offer made to the plaintiffs, on direction of the Park Board, of $166,199.91.) Resolutions adopted by the Park Board at that meeting also provided for a referendum to be held for the purpose of submitting to the voters a $550,000 bond issue, $175,000 of which the resolution earmarked for the purchase of the two subdivisions belonging to Progress. The referendum date was set for December 21, 1959, the earliest possible date that would be within the statutory requirement of the State of Illinois.

26. Offers to purchase, totalling $166,999.91, were contained in three letters dated December 7, 1959, signed by the Secretary of the Park Board and addressed to Progress and to the Chicago National Bank, Trustee under Trust No. 16093, legal title holder of certain of the property on which the purchase price had not been fully paid by Progress. These offers were delivered personally by certain of the defendants other than the members of the Park Board. These offers were not made in good faith but were made for the purpose of acquiring the subdivisions in order to prevent Progress from building residential housing thereon and to prevent sales of homes thereon to Negroes and other non-Caucasians.

28. There is no bona fide public need or necessity for the acquisition of either of the two subdivisions for park purposes or for any other public use or purpose.

29. The acquisition of Floral Park and Pear Tree Subdivisions was never considered by the Park Board until after the meeting of November 17, 1959.

30. The acts of the President and members of the Park Board in seeking to condemn the two subdivisions belonging to Progress were abuses of its powers of eminent domain conferred upon it by the laws of the State of Illinois, to-wit, Ill.Rev.Stats., c. 105, Section 8-1 and Ill.Rev.Stats., c. 47, Sections 1 to 17.

31. Plaintiffs allege that each and every defendant has conspired together and that each is bound by the act of every other defendant. They charge that each and every defendant, because of the alleged conspiracy they have entered into, is guilty of each and every overt act alleged in the complaint. Plaintiffs charge that there have been innumerable other overt acts committed by the named defendants and other defendants and that each and every one of the defendants named in the complaint is guilty of said additional overt acts as co-conspirator.

32. Plaintiffs charge that defendants Park Board, its President James C. Mitchell and Board members, and their employees and agents, did not make available to them the books and records of the Park Board when demanded and that the delay in producing them was part of the conspiracy charged.

33. Plaintiffs charge that all of the acts of conspiracy alleged have required each of them to divert their officers from their duties, and to expend large sums of money in attempting to meet the demands of the various defendants with the result that they have incurred additional expenses, costs and damages in and about their property and business.

34. Progress alleges it has been damaged by disparagement of its business reputation and has incurred additional construction costs as a result of the unlawful conspiracy and acts of the defendants.

35. Modern alleges it has been damaged in the conduct of its business in the State of Illinois and elsewhere in the United States by disparagement of its business reputation, by impairment of the value of its stock and sales thereof to the public, by delays and difficulties in the construction of residential developments and the sales of houses therein, all caused by the unlawful conspiracy alleged and the acts of the defendants in furtherance of such conspiracy.

36. Plaintiffs charge that they will be irreparably damaged if a preliminary and ultimately a permanent injunction is not granted against the Village of Deerfield and its President, Joseph Koss and the other members of the Board of Trustees enjoining them from enforcing the building code of the Village against Progress for alleged building code violations that do not exist and from enforcing said building code against plaintiffs in an arbitrary and capricious manner and in a different manner than which it is enforced against other builders.

37. Plaintiffs charge that defendants Deerfield Park District and its President, James C. Mitchell, and the other members of the Park Board have threatened to file a condemnation proceeding in the Lake County Circuit Court and that they are in the process of preparing such complaint. Unless restrained they will attempt to acquire plaintiffs' property in Deerfield by condemnation, and that plaintiffs will be irreparably damaged.

38. Plaintiffs charge that the sole and only reason for and the cause of the conspiracy and all of the overt acts and other acts in perpetrating the same is to discriminate against the plaintiffs and is founded upon bias and prejudice against the plaintiffs because of their willingness to sell houses to Negroes on an integrated basis.

39. Plaintiffs seek a temporary injunction pendente lite, which injunction they pray will, upon a hearing be made permanent, forever restraining and enjoining the defendants James C. Mitchell, Park Board President, and Dudley L. Dewey, Edward J. Walchli, Donald W. Keller and Aksel Petersen, Park Board members, their agents, servants, employees, attorneys and each of them, and all persons in active concert and participation with them and each of them from:

A. Attempting to acquire by condemnation or otherwise all or any property now owned by plaintiffs in the Village of Deerfield, Illinois.

B. Interfering, impeding or otherwise attempting to prevent, hinder or delay the lawful construction and sale of houses by plaintiffs in the Village of Deerfield, Illinois.

C. Interfering, impeding or otherwise attempting to prevent, hinder, or delay the lawful conduct of business by plaintiff in the Village of Deerfield, Illinois.

40. Plaintiffs seek a temporary injunction pendente lite, which injunction they pray will, upon a hearing be made permanent, forever restraining and enjoining defendants Joseph Koss, Village Board President, and Winston Porter, Harold L. Peterson, John Aberson, Maurice Petesch and Arno Wehle, Village Board members, their agents, servants, employees, attorneys and each of them, and all persons in active concert and participation with them and each of them, from:

A. Discriminating against plaintiffs in the conduct of plaintiff's lawful business in the Village of Deerfield, Illinois, by unreasonable, arbitrary, and capricious enforcement of the statutes, ordinances, regulations, usages and customs of the State of Illinois and said Village of Deerfield.

B. Interfering, impeding or otherwise attempting to prevent, hinder or delay the lawful construction and sale of houses by plaintiffs in ...


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