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09/23/88 First National Bank and v. First National Bank of

September 23, 1988





533 N.E.2d 8, 178 Ill. App. 3d 180, 127 Ill. Dec. 390 1988.IL.1432

Appeal from the Circuit Court of Cook County; the Hon. Benjamin S. Mackoff, Judge, presiding.


JUSTICE PINCHAM delivered the opinion of the court. LORENZ, P.J., and MURRAY, J., concur.


Plaintiffs, First National Bank and Trust Company of Evanston (Evanston Bank as seller-trustee) et al., brought this action against defendants, First National Bank of Skokie (Skokie Bank, as purchaser-trustee) et al., seeking a declaratory judgment that defendants had improperly terminated and breached a contract for defendants' purchase of plaintiffs' real estate entitling plaintiffs to the earnest money defendants posted with an escrowee as required by the contract. The trial court granted summary judgment for the plaintiffs from which defendants appeal. We affirm.

Plaintiff Evanston Bank, as a nominee land trust, owned fee simple title to an eight-acre parcel of vacant land (the land) in the Village of Hoffman Estates (the Village). The land had been zoned by the Village as B-2, a business category. In 1984, defendant Skokie Bank's beneficiaries, Allen Schmidt and Nicholas Trossman, initiated oral negotiations with plaintiff Evanston Bank's beneficiary, Allen Brown, regarding Schmidt's potential purchase of the land. Schmidt and Trossman expressed the desire to use the land for multifamily dwellings in the A-1 zoning category. As the Village was opposed to additional A-1, multifamily dwellings, the parties discussed the possibilities of obtaining rezoning and the difficulties Schmidt could expect to encounter in his efforts to have the Village rezone the land to A-1 for multifamily dwellings.

Brown convinced plaintiff to sell the land by means of a land trust controlled by defendants Schmidt and Trossman, and on April 20, 1984, the contract was executed by the respective trustees, plaintiff-seller, Evanston Bank, and defendant-purchaser, Skokie Bank. The contract stated that the defendants, inter alia, acknowledged receipt from the plaintiff of the following:

a survey and topographical map;

a soils report;

a natural resource assessment;

various analyses of marketing, employment, air quality, noise, public services, etc. related to the land;

a community impact statement; and

the zoning code of the Village.

Plaintiff had the foregoing materials prepared at an alleged cost of $50,000 and gave copies of them to defendants, free of charge, in order to expedite Schmidt and Trossman's efforts to have the land rezoned to A-1. The contract price of the land was $453,024. In accordance with the terms of the contract, defendants deposited $20,000 earnest money in escrow with a title company. The contract stated further that defendants promised that on or before July 15, 1984, defendants would file applications, the required fees, an information package, and a community impact statement with the Village's plan commission and zoning board of appeals. Additionally, the contract stated that if the purchaser timely fulfilled these covenants, but was unable to obtain the A-1 zoning by October 1, 1984, then the purchaser could either extend the date for fulfillment of the covenants, on payment of $2,000 per month or, in the alternative, rescind the contract, in which event the earnest money and any interest earned would be refunded to the purchaser. The contract provided further that if the contract was terminated through the fault of the purchaser, then the earnest money would be retained by plaintiff as liquidated damages and conversely, if the contract was terminated through the fault of the seller, then the earnest money would be refunded to the purchaser.

Less than one month after the parties had entered into the contract, on May 11, 1984, Trossman sent Brown a letter which stated that his attorney had informed him that the rezoning application procedure would take a much longer time than the October 1, 1984, date allowed under the contract, that the chance of success of the rezoning application was unlikely and that, "Therefore, the contract of April 20, 1984 is herewith terminated." Trossman's letter also requested a refund of the earnest money to the defendant-purchaser. Brown responded to Trossman's letter with a letter to Schmidt, dated May 15, 1984, urging Schmidt to reconsider and pointing out that Schmidt had not yet begun to perform his promises under the contract. Neither Schmidt nor Trossman responded to Brown's request for reconsideration. On May 29, 1984, and June 5, 1984, by letters, plaintiff-seller, Evanston Bank, declared defendants in default on the contract.

On June 15, 1984, an attorney for Schmidt wrote a letter to Brown which stated, inter alia, that an attorney had informed Schmidt that it would take a minimum of three months for the Village to process a zoning amendment and that therefore it was impossible for Schmidt to file the required rezoning documents with the Village by the date required in the contract, July 15, 1984. Schmidt's letter to Brown stated further that, since the contract gave the purchaser the option to terminate the contract if rezoning was not obtained by October 1, 1984, and since, under the circumstances, he could not meet the contingencies of the contract, "the contract should be terminated." Schmidt's letter further demanded a refund of the earnest money. Plaintiff Evanston Bank subsequently initiated the instant lawsuit requesting a declaratory judgment to adjudicate the rights of the parties under the contract.

In response to plaintiff's complaint, defendant filed an answer which affirmatively set forth the allegation that the zoning code of the Village did not include an A-1, multifamily dwelling category and that defendants' nonperformance under the contract was therefore excused. Plaintiff's reply denied the allegations in defendant's answer.

Plaintiff filed a motion for summary judgment and submitted to the trial court a copy of the Village's zoning code, article 6 of which contained an A-1 apartment district. The ...

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