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Citizens Utilities Co. v. Metropolitan San. Dist.

DECEMBER 17, 1974.




APPEAL from the Circuit Court of Cook County; the Hon. EDWARD J. EGAN, Judge, presiding.


This appeal arises from a suit by Citizens Utilities Company of Illinois, a privately owned public utility, against the Metropolitan Sanitary District of Greater Chicago to recover, under the constitution, for damage to a sewage treatment plant. *fn1 The material facts are not in dispute.

On December 18, 1962, the Sanitary District, acting within its statutory powers and lawfully exercising its authority, completed construction of an interceptor sewer near the Village of Hoffman Estates in Cook County, Illinois. This completion was anticipated by all concerned because District had jurisdiction of the area in which the village was situated. It notified all officials immediately involved and directed that sewer lines from Hoffman Estates be connected with the interceptor. Ten days later the connection was made, and from then on, all sewage from the village was diverted into the District's sewage disposal system.

Until that time, in fact from 1955, sewage utility service had been furnished to the village by a treatment plant that was constructed, and on two occasions improved, at a total cost of $486,756. The plant was operated under certificates of convenience and necessity issued by the Illinois Commerce Commission. In its 1960 certificate, the Commission required that the plant obtain from the Sanitary District such permits as may be required by law. Accordingly, on January 1, 1961, the District reviewed plans and specifications and then issued the permit under which the plant was operating when the interceptor sewer was completed. In elaborating on the terms of its permission, District told the owners that the plant was to operate as a temporary sewage treatment facility and stated that the permit was to remain in force only until Sanitary District facilities were available.

When these did become available and village sewer lines were connected with District's interceptor sewer, the plant, having no sewage from the village to treat, ceased operations entirely, totally depreciated in value and became useless. Indeed, the cost of salvaging the plant exceeded its value by $17,000. Because of this fact, although no part of their property was taken or physically touched by the District, owners of the plant demanded that District compensate them for their loss. District, however, refused, saying that it was under no moral or legal obligation to pay the owners any compensation.

Following this refusal, Citizens, a company which acquired ownership rights to the plant after the interceptor sewer was completed, filed suit alleging that it was entitled to recover from District the sum of $520,000 as just compensation for property that allegedly became useless as a result of District's construction of the interceptor sewer and connection of sewer lines from the Village of Hoffman Estates. For its theory of the case, Citizens relied on article II, section 13, of the Illinois constitution of 1870, *fn2 on section 19 of "An Act to create sanitary district * * *" *fn3 and on the fifth and fourteenth amendments to the Federal constitution. *fn4 District appeared, answered the complaint, denied the material allegations and interposed affirmative defenses. In later pretrial proceedings, the trial court entered an order which found that there was no factual dispute concerning the issue of District's liability, if any; the dispute between the parties involved a question of law. Therefore, it was agreed that Citizens and District would file cross-motions for summary judgment. This was done, and thereafter, memoranda of law arguing the respective positions of the litigants were submitted. The court took the motions under consideration and then denied the one filed by District and granted the one filed by Citizens. After this ruling, the question of damages was heard by a jury that returned a verdict of $385,000 in favor of Citizens. Judgment was entered on the verdict. District now brings the case to this court for our review. The dispositive issue presented is whether the trial court erred in granting Citizens' motion for summary judgment, thus holding that with regard to the loss of the sewage treatment plant, it suffered damages compensable under article II, section 13 of the Illinois Constitution of 1870 or under section 19 of "An Act to create sanitary districts * * *" (Ill. Rev. Stat., 1961, ch. 42, par. 339).

• 1 It is clear from the record before us that no property belonging to owners of the plant or to others adjacent to it was taken by the Sanitary District. Taking of private property within the meaning of the constitution can be accomplished only by the filing of a petition, the ascertainment of value and the payment of just compensation. (People ex rel. Gutknecht v. City of Chicago, 414 Ill. 600, 111 N.E.2d 626; 17 I.L.P. Eminent Domain § 42 (1956).) And, it is also clear that there was no physical intrusion on or obstruction of Citizens' property by District. What happened was District's construction of a public improvement, an interceptor sewer, that was later connected to sewer lines from the Village of Hoffman Estates, thereby diverting sewage from Citizens' treatment plant, followed by the plant becoming useless because it no longer could serve the village.

The question, then, is whether this was damage of private property for public use within the meaning of the constitutional guarantee or damage by reason of the construction of an improvement within the meaning of section 19 of the sanitary district act. The answer to this question necessarily depends on the meaning our courts have given to the concept of damage as it appears in the applicable provision of the 1870 constitution and in the pertinent section of the drainage code.

In Rigney v. City of Chicago, 102 Ill. 64, a property owner invoked article II, section 13, of the Illinois constitution of 1870 and sued the city of Chicago for damages he allegedly sustained as a result of the city's construction of a viaduct some distance from his property. As in the case before us, there was no taking, nor was there any physical intrusion upon the land. However, the owner proved that the viaduct cut his land from all communication with one of the city's main thoroughfares, one to and from which he had had prior access. The owner's evidence established that as a result of this obstruction, monthly rentals of his property were reduced and its value deteriorated by two-thirds. Despite this showing, the owner was denied recovery in the trial court; the appellate court affirmed. He appealed to the supreme court and the issue he presented required construction of the words "or damaged" in the provision of the Illinois constitution of 1870 which guaranteed that "[p]rivate property shall not be taken or damaged for public use without just compensation." (Emphasis supplied.) Ill. Const. 1870, art. 11, § 13.

After reviewing history and decisional law of this and other jurisdictions, the court concluded that damage under the 1870 constitution did not require, in every case, proof of actual appropriation or physical injury to an owner's property. Therefore, the court reversed the denials of relief to the owner. In doing so, it concluded that "damaged" meant any direct physical disturbance of a right, either public or private, which an owner enjoys in connection with his property; a right which gives the property an additional value; a right which is disturbed in a way that inflicts a special damage with respect to the property in excess of that sustained by the public generally. The court added, "[I]t was the intention of the framers of the present constitution to require compensation to be made in all cases where, but for some legislative enactment, an action would lie by the common law." 102 Ill. 64 at 81.

This definition has stood unchanged and unmodified since Rigney was decided. It has been approved by the highest court of this country. (See City of Chicago v. Taylor (1888), 125 U.S. 161, 31 L.Ed. 638, 8 S.Ct. 820; D.M. Osborne & Co. v. Missouri Pacific Ry. Co. (1893), 147 U.S. 248, 37 L.Ed. 155, 13 S.Ct. 299.) It has influenced development of American law. (See City & County of Honolulu v. Market Place, Ltd. (Hawaii 1973), 517 P.2d 7, 13; Van Alstyne, Statutory Modification of Inverse Condemnation: The Scope of Legislative Power, 19 Stan. L. Rev. 727, 771-72 (1967); Nichols on Eminent Domain § 6.441

(rev. 3d ed.); 26 Am.Jur.2d Eminent Domain § 159 (1966).) And, with regard to section 19 of "An Act to create sanitary districts * * *" (Ill. Rev. Stat. 1961, ch. 42, par. 339), there is no reason to believe the legislature intended the word "damaged" to have any other meaning. The principal legislative purpose in the enactment of this statute, which occurred after the Rigney decision, was to creat a venue and afford litigants the right to bring their action in counties where the damaged real estate is situated as well as in the county where the sanitary district is located. Kosicki v. S.A. Healy Co., 380 Ill. 298, 44 N.E.2d 27.

Therefore, damage within both the constitutional and statutory provisions means some direct physical disturbance of a right which owners of the plant in question enjoyed in connection with their property, one that gave the plant additional value, and which, when disturbed, would cause special damage in excess of that sustained by the public generally and give rise to an action by the common law. (See Otis Elevator Co. v. City of Chicago, 263 Ill. 419, 424, 105 N.E. 338.) Damage, as thus defined, had to be actionable, but for District's statutory authority. (Compare Illinois Power & Light Corp. v. Talbott, 321 Ill. 538, 152 N.E. 486; see 2A Nichols on Eminent Domain § 6.41

(rev. 3d ed.).) This meaning of damage, of course, has application to the rights to or in property which the owners enjoyed in ...

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