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Lasalle Nat'l Bk. v. City of Warrenville

OPINION FILED APRIL 7, 1982.

LASALLE NATIONAL BANK, TRUSTEE, ET AL., PLAINTIFFS-APPELLANTS,

v.

THE CITY OF WARRENVILLE ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Du Page County; the Hon. EDWIN L. DOUGLAS, Judge, presiding.

PRESIDING JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:

Whether the Cities of Warrenville and Naperville, as successors to a private utility company, Westview Utility Co. (Westview), are precluded by a contract between the developer, LaSalle National Bank, trustee, and Naper Venture (Naper) and Westview from charging connection fees and water meter installation charges, is the question before us.

The trial court entered summary judgment in favor of the municipalities and denied Naper's motion for summary judgment. Naper appeals.

On May 24, 1972, Naper entered into a contract with Westview to furnish sewer and water services in an area which Naper was developing. The contract provided, in substance, that Westview would provide sewer and water service, with the developer paying all costs for the extension of sewer and water lines from the present lines to the points in the development required by Naper; the facilities to become the property of Westview as installed; and the contract further provided as pertinent:

"Water meters shall be installed by Utility.

As units are completed by Developers or their assignees, and tie-on is made to the sewer system, Utility shall refund to Developers a per unit sum of $375 paid to Utility for plant expansion; * * * Utility's maximum obligation to make such refunds shall be 500 units or $187,500.00, * * *.

7. Utility shall charge to the customers in the Property such rates, and shall impose such rules and regulations, as may from time to time be authorized by the Illinois Commerce Commission or such other public agency or body, if any, as may have jurisdiction to authorize such rates, rules and regulations.

* * *

14. This Agreement sets forth the complete understanding between Developer and Utility * * *."

Naper filed a complaint for declaratory judgment which, as amended, alleged the execution of the contract between itself and Westview, the installation by Naper at its own expense of the facilities (defined in the contract as "including mains, service lines, pipes, fittings, valves, hydrants, manholes and lift stations"). An affidavit attached to Naper's motion for summary judgment stated that Naper spent more than $1,000,688.48 for the installation of the sewer and water lines, and paid the additional sum of $187,500 for plant expansion; and that Naper obtained sewer and water service from Westview without payment of tap-on charges; that on or about September 10, 1974, Warrenville purchased the entire utility system from Westview. See DiSanto v. City of Warrenville (1978), 59 Ill. App.3d 931.

The complaint further alleged that under the assignment from Westview to Warrenville, Warrenville obtained the water and sewer system, as well as Westview's rights and obligations under its contract with Naper. Warrenville assumed these rights and obligations, with the exception of the obligation to make refunds for the first 500 units connected. Warrenville further agreed not to "assess, charge or collect any tap in or connection charge with respect to property which [Westview] has already collected" * * * "or which [Westview] would be prohibited from assessing or collecting * * *"; that, however, Warrenville enacted an ordinance requiring payment of water and sewer connection charges and demanded payment of a charge for each water meter installed. The complaint further alleged that in 1977, the City of Naperville acquired the portion of the lines acquired by Warrenville from Westview which served the Naper Venture property. In the assignment agreement Naperville assumed all obligations of Warrenville to the users of the utility services in the area of acquisition. The agreement also provided:

"In the event that any claim of right under said contract as to said tap on fees or water meters results in Naperville receiving less income that [sic] its usual, reasonable and customary fees and charges from the areas covered by said agreements, then and in that event the parties agreed [sic] to share the resultant loss on a 50-50 basis, and Warrenville shall promptly remit its share to Naperville upon receipt of an itemized billing therefor."

The amended complaint further alleged that the City of Naperville also was attempting to assess a connection fee and a charge for water meters; that the ordinances of both Warrenville and Naperville are void as outside of the cities' authorities pursuant to section 11-139-8 of the Illinois Municipal Code (Ill. Rev. Stat. 1975, ch. 24, par. 11-139-8); bear no reasonable relation to costs and, further, deprive Naper of constitutional due process and equal protection of the law in requiring it to pay for the use of sewer and water facilities which it installed at its own expense.

The municipalities' motion for summary judgment was granted and Naper's motion for summary judgment ...


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