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Austin View Civic Ass'n v. City of Palos Hts.

OPINION FILED MAY 22, 1980.

AUSTIN VIEW CIVIC ASSOCIATION ET AL., PLAINTIFFS-APPELLANTS,

v.

THE CITY OF PALOS HEIGHTS, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding.

MR. PRESIDING JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

Rehearing denied June 19, 1980.

Plaintiffs brought this class action in the circuit court of Cook County seeking a declaratory judgment, an injunction, and an accounting. Defendant, City of Palos Heights, is a municipal corporation owning and operating a combined waterworks and sewerage system that supplies water to both the residents of Palos Heights and nonresidents such as plaintiffs. The crux of plaintiffs' complaint is that defendant is discriminating against them by charging them higher water rates than residents of Palos Heights are charged. Following defendant's combined motions to dismiss under sections 45 and 48 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, pars. 45, 48), the trial court dismissed the action with prejudice. The issue on appeal is whether the trial court erred in dismissing the action.

We reverse and remand.

Plaintiffs' complaint alleged the following facts.

Plaintiff corporations, Austin View Civic Association, Blue Crest Community Association, and Palos Gardens Civic Association, are not-for-profit corporations who brought this action on behalf of all residents living in their respective subdivisions, the Austin View Subdivision, the Blue Crest Subdivision, and the Palos Gardens Subdivision. Plaintiffs Lee Roy Erickson, Harley Bauch and Louis Rysdon are individuals residing in Worth Township. All of the plaintiffs reside in an unincorporated area located in Cook County between the city of Palos Heights and the village of Alsip. All of the members of the alleged class also reside in this area.

The village of Alsip, a municipal corporation, is located outside the southwest boundary of the city of Chicago. Alsip receives its water supply through pipes connected to pipes belonging to the city of Chicago. The unincorporated area is located directly west of Alsip. From 1957 until 1968, this area was provided with water by two private water companies located in the unincorporated area. These companies received their water through pipes connected to pipes belonging to Alsip.

Defendant, city of Palos Heights, is located directly west of the unincorporated area. In 1967, defendant, in order to provide water for its residents and pursuant to its power as a municipal corporation under section 11-139-2 of the Illinois Municipal Code (Ill. Rev. Stat. 1977, ch. 24, par. 11-139-2), purchased the two private water companies that were supplying water to the residents of the unincorporated area. Simultaneously, defendant entered into a contract with Alsip which allowed defendant to connect pipes to the water system previously owned by the two private water companies so that water could flow through to defendant's residents. Thus, the water used by defendant's residents originated in Chicago, came through Alsip and the unincorporated area, and ended up in Palos Heights. Under the contract with Alsip, defendant was to continue providing water to the residents of the unincorporated area.

On February 27, 1968, defendant enacted a water rate ordinance. Basically, the ordinance provided that nonresidents of Palos Heights were to pay 25% more for water than residents of Palos Heights. The ordinance also provided that residents of Palos Heights over the age of 65 were to receive a 25% discount on their water charges. On May 17, 1977, defendant enacted a second ordinance that increased water rates, with nonresidents paying 30% more than residents.

• 1 Based on the above, plaintiffs alleged the following: (1) that defendant was unlawfully discriminating against them by charging them higher water rates than residents of Palos Heights because the difference in rates was arbitrary and bore no reasonable relationship to a difference in the cost of providing water to residents and nonresidents, and (2) that the ordinance was unconstitutional as a denial of equal protection of the law (Ill. Const. 1970, art. I, § 2; U.S. Const., amend. XIV), as applied to plaintiffs and others living in the unincorporated area. *fn1

Defendant filed a motion to dismiss the plaintiffs' complaint, claiming the corporate plaintiffs lacked standing to sue and, additionally, that the class action suit was a legally inappropriate proceeding in this case. This motion was denied and defendant then filed a combined motion to dismiss under sections 45 and 48(1)(i) of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, pars. 45, 48(1)(i)).

Under section 45, defendant moved to strike certain paragraphs of plaintiffs' complaint as failing to state a cause of action. Particularly, defendant moved to strike those paragraphs of the complaint that described the factual background leading up to and including the purchase of the private water companies of Palos Heights, and further moved to strike a part of one paragraph that said that the ordinance provided for a water rate discount to residents over 65.

Under section 48(1)(i), defendant moved to dismiss the complaint based on affirmative matter defeating the claim or demand. The affirmative matter asserted was the contract, verified by affidavit, entered into between Palos Heights and Alsip. Under the terms of this contract Palos Heights was to charge all nonresident users of water "extended" from the Palos Heights' water system $.05 per thousand gallons more than residents of Palos Heights, and to pay over this excess amount to Alsip. Also, this contract was subject to the terms of a contract for the supply of water that Alsip had entered into with the city of Chicago. Under the Alsip-city of Chicago contract, Alsip, and, in turn, Palos Heights were charged a set rate for water they received from Chicago, but Alsip also had to pay to the city of Chicago a 50% surcharge for all water Alsip or Palos Heights provided to residents of unincorporated areas. Thus, in turn, Palos Heights was required to pay Alsip this surcharge for any water Palos Heights provided to unincorporated areas so that Alsip could pay the city of Chicago. Defendant alleged that the terms of its contract with Alsip proved it cost defendant more to supply water to plaintiffs than to its own residents, *fn2 and thus defendant had a rational basis for charging plaintiffs more for water than it charged residents of Palos Heights.

After a hearing, the trial court granted defendant's combined motions to dismiss with prejudice and adopted all of defendant's reasons as grounds for dismissal of plaintiffs' complaint. Following the denial of plaintiffs' motion to vacate the order of dismissal, the plaintiffs appealed.

OPINION

I

The major issue presented in this case is whether the trial court erred in dismissing plaintiffs' complaint under section 48(1)(i) of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 48(1)(i)). Before discussing this issue, we find it necessary to briefly discuss the general nature of section 48(1)(i) and also discuss exactly what has been alleged in plaintiffs' complaint and exactly what defendant alleged as affirmative matter under section 48(1)(i).

SECTION 48(1)(i)

Much of section 48 allows for dismissal of an action based on several specified affirmative defenses such as bar by a prior judgment, incapacity to sue, or unenforceability under the Statute of Frauds (see Ill. Rev. Stat. 1977, ch. 110, par. 48(1)(a through h)), but section 48(1)(i) provides for dismissal based on many matters which are not necessarily classified as affirmative defenses. Section 48(1)(i) reads as follows:

"(1) Defendant may, within the time for pleading, file a motion for dismissal of the action or for other appropriate relief upon any of the following grounds. If the grounds do not appear on the face of the ...


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