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City of Chicago v. Loitz

APRIL 2, 1973.




APPEAL from the Circuit Court of Cook County; the Hon. PAUL F. ELWARD, Judge, presiding.


This record brings before us an appeal by Charles Loitz, Murray Loitz and Freida Loitz (counterplaintiffs) from an order granting the motion of City of Chicago (plaintiff and counterdefendant) to dismiss their second amended counterclaim.

• 1 We will first state the substance of the second amended counterclaim, the well-pleaded facts of which are admitted by the motion to dismiss. Acorn Auto Driving School, Inc. v. Board of Education, 27 Ill.2d 93, 96, 187 N.E.2d 722.

Counterplaintiffs own real estate in the City of Chicago upon which they operated a gasoline station. On July 11, 1966, the City Council of Chicago adopted an ordinance for realignment and reconstruction of certain streets in the area of counterplaintiffs' property. The Commissioner of Public Works was authorized to acquire four parcels of property to accomplish this, including that of counterplaintiffs. Three of these parcels were actually acquired by the City or condemnation proceedings were filed against them.

On December 23, 1966, the Commissioner of Public Works wrote a letter to counterplaintiffs advising that the City had directed acquisition of their real estate. An offer of $70,000 for the property was made. The letter also stated that unless counterplaintiffs replied within ten days the Commissioner would assume that the offer had been rejected and that condemnation proceedings would be instituted.

Promptly upon receipt of this offer, counterplaintiffs entered into negotiations with the City. On or about March 7, 1967, the City made an offer to purchase the property for $82,000. On March 7, 1967, legal counsel for counterplaintiffs wrote to the City Bureau of Engineering and accepted the offer of $82,000 for the premises, including equipment and fixtures attached thereto. At or about the time of these negotiations, counterplaintiffs were in the process of dealing with their gasoline supplier in an effort to obtain funds to remodel their gasoline station. The steps being taken by the City in connection with its intention to acquire the property of counterplaintiffs by condemnation or purchase were matters of common knowledge among landowners, tenants, businessmen and realtors in the area. In view of the pendency of the sale, the gasoline supplier for counterplaintiffs cut off their supplies and refused to furnish funds. Subsequently the City abandoned its project and failed and refused to consummate the transaction with counterplaintiffs. These acts of the City caused the destruction of the business of counterplaintiffs, caused their property to become unoccupied and unsalable and resulted in destruction of the improvements on the property by vandals. Although not specifically alleged, it is agreed that condemnation proceedings were never filed by the City.

The second amended counterclaim further alleged that these acts constituted a taking of counterplaintiffs' property, which was valued at $83,500, and that the City had failed and refused to give counterplaintiffs just compensation as required by section 13 of article II of the Constitution of Illinois and amendments V and XIV of the Constitution of the United States. The City filed a motion to dismiss the second amended counterclaim for failure to state a cause of action. This motion was granted by the trial court. A motion made by counterplaintiffs to reconsider this order was denied.

It is counterplaintiffs' theory and contention that their property was actually taken by the City despite the fact that proceedings for condemnation were never filed. They urge that the City, by its actions, deprived them of their interests in the property, which is legally tantamount to a taking by the municipality. The City urges that a property owner has no cause of action for damage to property caused by preliminary activities prior to the filing of an action for condemnation. As an additional ground, the City urges that the second amended counterclaim was properly dismissed because of failure of counterplaintiffs to serve notice upon the City pursuant to the Local Governmental and Governmental Employees Tort Immunity Act. Ill. Rev. Stat. 1965, ch. 85, sec. 8-101-102-103.

• 2 We are thus presented with an issue of law as to whether the above allegations are sufficient to constitute the taking of property by the municipality without just compensation in violation of Illinois and Federal Constitutions. We have concluded and accordingly hold that the law of Illinois, in agreement with the weight of authority in other states and in the Federal courts, is that mere planning by a governmental body in anticipation of the taking of land for public use and preliminary steps taken to accomplish this, without the filing of proceedings and without physical taking or actual invasion of the real estate, is not actionable by the owner of the land as being in contravention of Illinois and Federal Constitutions. A recent annotation appearing in the American Law Reports sets forth this rule and lists in detail the citation of cases dealing with this question. Annotation of Hilltop Properties v. State, 233 Cal.App.2d 349, appearing in 37 A.L.R.3d 109, 132, 133, 134.

The law of Illinois is contained in two decisions of our Supreme Court. In Eckhoff v. Forest Preserve Dist., 377 Ill. 208, 36 N.E.2d 245, plaintiff sought to recover compensation for damages to land not taken on the theory that the District had engaged in needless and vexatious delay. Various notices of proposed taking of the property had been served from 1925 until proceedings were actually filed in 1938. Damages were claimed for alleged violation of the State and Federal constitutions. The Supreme Court affirmed denial of this claim using the following language (377 Ill. at page 214):

"It seems obvious that the taking or damaging of land by eminent domain is not accomplished by passing resolutions or ordinances, nor by negotiating with the owner for the purchase of it, or serving notices upon him that the land may be required for public purpose. The series of corporate actions by the appellee district, complained of, cannot be said to have had the same effect upon their land as the filing of a condemnation petition. Such could not, in any sense, be held to be the taking of land or damaging of land not taken. The fact that at some future time a municipal corporation, with power of eminent domain, may require the land of a private owner, is one of the conditions on which the owner holds land in this State. Entering into negotiations for the purchase, and filing of a petition to condemn, vests no interest in land."

The same rule was followed in Chicago Housing Authority v. Lamar, 21 Ill.2d 362, 172 N.E.2d 790. The landowner there claimed that he was entitled to compensation for the taking of his property fixed as of the date that a verbal agreement for voluntary conveyance was entered into. As in the case at bar, the owner alleged that the premises had become vacant and subjected to vandalism after the agreement. The Supreme Court held (21 Ill.2d at page 365):

"It is a well-recognized proposition of law that land is not damaged by reason of preliminary procedure looking to its appropriation to a public use. (Eckhoff v. Forest Preserve District, 377 Ill. 208, 214; City of Chicago v. Lederer, 274 Ill. 584.)"

The court further expressly approved the basic theory of Eckhoff as above set forth. (See 21 Ill.2d at page 367.) It is true that Chicago Housing Authority v. Lamar is decided on the basis of Illinois law without mention of the United States Constitution. But, Eckhoff considered both constitutions. It should also be noted that amendment XIV of the United States Constitution provides simply that no person shall be deprived of his property without due process of law. Amendment V, closer to the case at bar, provides that private property shall not be taken for public use without just compensation. The organic law of Illinois seems to go even beyond these pronouncements. The Illinois Constitution of 1870, article II, section 13, provides that "private property shall not be taken or damaged for public use ...

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