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06/09/88 William Pasulka Et Al., v. Frank N. Koob

June 9, 1988

WILLIAM PASULKA ET AL., PLAINTIFFS-APPELLANTS

v.

FRANK N. KOOB, INDIV. AND AS TRUSTEE, ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, THIRD DISTRICT

524 N.E.2d 1227, 170 Ill. App. 3d 191, 121 Ill. Dec. 179 1988.IL.910

Appeal from the Circuit Court of La Salle County; the Hon. Thomas R. Flood, Judge, presiding.

APPELLATE Judges:

JUSTICE SPITZ delivered the opinion of the court. GREEN, P.J., concurs. JUSTICE LUND, Dissenting.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SPITZ

This is an appeal from a directed verdict entered in the circuit court of La Salle County. At the close of plaintiff's evidence, the verdict was directed in favor of defendants Frank N. Koob, individually and as trustee under a declaration of trust dated August 18, 1978, and the Western Sand and Gravel Company (Western), an Illinois corporation. The plaintiffs, William and Marcia Pasulka, in an 11-count amended complaint, sought money damages and injunctive relief stemming from: (1) plaintiffs' purchase of a parcel of land from Koob at which time they obtained a right of first refusal to purchase "adjacent" land Koob owned and over which "adjacent" land they were advised certain restrictions applied; and (2) the subsequent sale by Koob to Western of an option to purchase another parcel of land which Koob owned at the time of the original sale to plaintiffs and from which Western is mining sand and gravel. The evidence presented at trial is hereafter set out in chronological order.

In 1974, Koob owned 320 acres in sections 2, 3, 10, and 11 in Dimmick Township, La Salle County, Illinois. North 35th Road ran over and along the boundary between sections 2 and 11 and continued over and along the boundary between sections 3 and 10. In addition, the Little Vermilion River coursed over the property in sections 10 and 11. In that year, he entered into an agreement to sell 80 acres, being the east one-half of the northwest one-quarter of section 11, to Bernard and Loretta Cohn. By this agreement, the Cohns would undertake to subdivide the 80 acres and pay the $86,000 purchase price from the proceeds of subsequent sales of lots. This property became known as the Timber Lane Estates, a residential area with covenants filed of record, including the prohibition of commercial enterprise, business, profession or home occupations.

Between June 1977 and November 1979, individually and later as a trustee under a declaration of trust dated August 22, 1978, Koob sold four additional parcels: 3.448 acres in section 3 to Craig and Shawn Lamp; 3.515 acres in sections 2 and 3 to Donald and Anita Albert; 1.770 acres plus a driveway in section 2 to Kenneth and Elizabeth McCaleb; and 2.228 acres in section 2 to Janet Delaney. In each of these sales, the sales agreement restricted the subsequent use of the subject property, and Koob retained a right of first refusal in the event the land was later sold by the purchasers. The restrictions were to run with the land, binding all those who would take from sellers or purchasers. The Lamps also negotiated a right of first refusal in an additional 1.071 acres of section 3 legally described in their agreement with Koob. A similar right of first refusal to an additional tract was stricken from the Alberts' agreement with Koob. In the agreement with Delaney, Koob's right of first refusal was restricted to Koob, personally, and did not pass to his heirs, assigns, executors and devisees. The agreements, restrictions and the plat of survey of these tracts were not filed of record in the recorder of deeds office of La Salle County.

In the fall of 1978, the plaintiffs began to search for a prospective homesite. They were looking for a permanent investment and a homesite located near nature, woodlands, farms, and educational systems for their four children and in a quiet atmosphere. They also wanted an opportunity in the future to purchase additional land.

In July 1980, Koob answered a newspaper advertisement plaintiffs had placed. On July 27, 1980, plaintiffs and Koob had an extensive Discussion. In that conversation, Koob informed the plaintiffs about how beautiful his land was and about the wildlife that lived there. He advised them that his remaining 229 acres contained a pond, a creek, a large number of trees and wildlife. At that time, there were four homes in the area. The rest was used for farming. Koob stated he had developed Timber Lane Estates and wanted to preserve the rest of his land for all the people who were buying from him. He also stated he had purchased the 80 acres of land on the north side of North 35th Road because it was a junkyard and he wanted to clean it up and transform it into a beautiful area.

Koob talked about the ways in which his land was restricted. He said he had an obligation to restrict all of his land and all he would ever do with his land was sell fine residential homesites and continue grain farming. He also stated he was developing a fine residential area along North 35th Road and had a way of protecting people's investments without the bother and trouble of a formal subdivision.

Koob told plaintiffs he did not want anyone "messing up" his land and indicated he would enforce the restrictions. In particular, he advised the plaintiffs he did not want them to build an untraditional house that would devalue the neighborhood. Nor would he approve of their family business, which involved the assembly and distribution of residential water purifiers, if it had employees or customers entering on the land. He wanted to discuss with Craig Lamps the delivery of equipment to plaintiffs by a semitractor-trailer three or four times a year, although Koob saw no problem with it. He asked Lamps in plaintiffs' presence if that was all right. Koob pointed out an abandoned gravel pit on his land but said it would never be reopened. The pit had last been used between 1965 and 1967. He said he hated quarries because they permanently destroyed land and would never sell to a quarry. In discussing with Koob other homesites plaintiffs were looking at, Mrs. Pasulka expressed her concern about living near a silica plant near Mendota, and Koob discouraged her from choosing a homesite near a pig farm. Plaintiffs asked Koob if he would be willing to sell them an additional parcel of land to the south. Koob replied he would, but not at that time. When plaintiffs inspected the property, plaintiffs could see the tips of the old mine spoils in section 10, south of the river, but plaintiffs did not go across the river to look at the pit.

Koob showed plaintiffs a survey of seven tracts of real estate. The plaintiffs ultimately decided to purchase tract 2, a 4.287-acre parcel located in section 10, at a price of $25,500. A proposed agreement was drafted by Koob's attorney which was subsequently modified at the request of plaintiffs, who were represented by counsel. In the modified agreement, paragraph 9, in part, provided plaintiffs with a right of first refusal as to "adjacent property owned by the Seller." In addition, a paragraph was added to the page of restrictions on the property which states: "The Purchasers are assured that these restrictions shall be included in the sale by the Seller of any adjacent property owned by him." The sale was consummated on November 7, 1980.

At the time of plaintiffs' purchase, the neighborhood was quiet, peaceful, and beautiful with much wildlife. It was basically a farming community with 27 homes, including those in Timber Lane Estates. The closest industrial facility was Manley Sand Company, three miles away, and Troy Grove Quarry, 2 3/4 miles away. The road was in good condition with normally light traffic.

In August 1983, Dimmick Township placed an ad in the La Salle News Tribune seeking to purchase a one-acre site for use as a heavy equipment storage building. Koob answered the ad and said he was willing to sell tracts 1 or 3 illustrated on the seven-parcel plat he had previously shown plaintiffs. Tracts 1 and 3 are contiguous to tract 2, purchased by plaintiffs, on the west and east, respectively.

Shortly thereafter, Koob mentioned to plaintiffs that the township was interested in purchasing land. Mrs. Pasulka replied that their agreement prohibited Koob from selling the land to the township because of the plaintiffs' right of first refusal and the restrictions. Koob disagreed, claiming the parcel which Dimmick Township wanted to buy was not "adjacent" and, therefore, not subject to the agreement. Approximately two weeks later, Koob telephoned plaintiffs and admitted their interpretation of the contract was correct.

On September 6, 1983, the plaintiffs wrote a letter to Koob seeking to purchase tracts 1 and 3. Thereafter, on November 16, 1983, the plaintiffs recorded at the office of the La Salle County recorder of deeds a "Memorandum" unilaterally executed by plaintiffs which stated the plaintiffs had a right of first refusal as to tracts 1 and 3.

On December 22, 1983, Koob granted Western an option to purchase a 47-acre parcel of land located approximately 195 feet south of the plaintiffs' property, at its nearest point. For this option, Western paid $2,000 to Koob. The option did not authorize Western to mine sand and was to expire on March 22, 1984, but it was extended on a number of occasions. The option pertained to the southeast quarter of the northwest quarter of section 10 and that part of the northeast quarter of the northeast quarter of section 10, lying south of the center of the Little Vermilion River. Koob made no offer to sell this land to plaintiffs.

On January 9, 1984, Koob sold the west five acres of the southwest quarter of the southwest quarter of section 3 to the Conkey Corporation. The Pasulkas did not become aware of the sale until after it occurred, and Koob did not offer to sell this property to plaintiffs either. Conkey purchased the land for a commercial Christmas tree operation. The plaintiffs did not complain to Koob about this sale because they were more concerned about the Western mining operation.

On January 23 or 24, 1984, plaintiffs met with O'Halloran and Sitterly, the president and vice-president of Western. These gentlemen indicated Western had been negotiating with Koob for some time prior to the plaintiffs purchasing their property. Plaintiffs were advised Western intended to mine sand from the land under option and that this was not a large deposit of sand and would be used up in a couple of years. Mrs. Pasulka informed these officers plaintiffs' agreement with Koob gave the plaintiffs certain rights which they believed precluded a strip mine from operating in the area.

On January 27, 1984, plaintiffs recorded a second unilateral memorandum, prepared by their attorney, which stated that the plaintiffs had a right of first refusal in all property owned by Koob in sections 10 and 11. Mr. Pasulka also wrote a letter regarding the Pasulka agreement and hand delivered the letter to Western, together with a copy of the second "Memorandum of Right of First Refusal." Mr. Pasulka also contacted Koob and stated his objection to the Western option. In addition, plaintiffs filed a petition for an injunction in the circuit court of La Salle County (No. 84 -- CH -- 20), but later voluntarily dismissed it.

On or about July 18, 1984, the defendants entered into an addendum to the option to purchase. Pursuant to the terms of said addendum, Koob gave Western the right to remove sand and gravel from the strip mine, and Western agreed to pay Koob 50 cents for every cubic yard of sand and gravel so removed. On July 25, 1984, Western resumed its mining operation which it had been conducting intermittently since February 29, 1984.

On August 8, 1984, Koob entered into an agreement with Unimin Corporation (Unimin) whereby Koob granted Unimin an option to purchase a 20-acre parcel north of North 35th Road. Plaintiffs did not become aware of the Unimin option until September 1984.

On September 7, 1984, Koob and Western entered into a second addendum to the option to purchase which granted to Western an easement in gross to tract 4, which land "may be used for any and all purposes of said Western Sand and Gravel Company." On September 12, 1984, the plaintiffs recorded a third "Memorandum of Right of First Refusal" which stated that their right of first refusal and the restrictions applied to all of Koob's land in sections 2, 3, 10, and 11.

Plaintiffs also presented evidence concerning the nature and effect of the mining operations. At times, there have been three bulldozers and strippers as well as four or five endloaders operating at the same time. In addition, there are heavy trucks hauling sand and gravel from the mine and averaging between 32 to 75 round trips per day. On occasion, the trucks make as many as 200 round trips per day. The mine generally operates between 6:30 a.m. and 5 p.m., six days a week, excluding winters. Plaintiffs complain the various engines and machines cause noise, dust, and odors.

The loudness of the noise was corroborated by plaintiffs' expert witness, who testified that Western's operation of the strip mine exceeded the noise limits set forth in section 901.102(a) of the Illinois Administrative Code (35 Ill. Adm. Code 901.102(a) (1985)). He also stated that the noise would be a very great source of annoyance and perhaps detrimental to those inside the living areas of plaintiffs' house. On the day on which their expert conducted his tests, there was extremely low activity at the mining operation. Another of plaintiffs' witnesses, Dr. Harold Wakely, testified as to the acceptable indoor limits of noise and stated these limits were exceeded.

Because of the noise, dust, and odors, the plaintiffs state they have been unable to enjoy the full use of the play court, patio, and other portions of their property. Moreover, they must keep the windows and doors of their home closed during the day because of the noise and odors. The plaintiffs do not have air-conditioning, and even with the windows closed, they still hear the noise inside the house. This noise hinders them from carrying on normal activities. In addition, it has increased the amount of stress among the family members.

Since October 15, 1980, the plaintiffs have been building their home. The costs have been $297,000, including land, improvements and plaintiffs' labor. The plaintiffs have expended several thousand hours performing construction work on their home. The house is located approximately 600 feet away from their closest ...


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