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09/08/95 ILLINOIS STATE TOLL HIGHWAY AUTHORITY v.

September 8, 1995

THE ILLINOIS STATE TOLL HIGHWAY AUTHORITY, AN INSTRUMENTALITY AND ADMINISTRATIVE AGENCY OF THE STATE OF ILLINOIS, PETITIONER-APPELLANT,
v.
PATRICK V. DIBENEDETTO AND ANN DIBENEDETTO, HIS WIFE AS JOINT TENANTS, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. The Honorable Joanne L. Lanigan, Judge Presiding.

Petition for Leave to Appeal Denied January 31, 1996.

The Honorable Justice Egan delivered the opinion of the court: McNAMARA, P.j., concurs. Justice Zwick, concurring

The opinion of the court was delivered by: Egan

The Honorable Justice EGAN delivered the opinion of the court:

The Illinois State Toll Highway Authority (Authority) appeals from an order dismissing its petition to condemn property consisting of nine acres of unimproved land (the property) located at the southeast corner of Beverly Road, Cook County, Illinois and the Northwest Tollway (I-90) and adjacent to the Tollway. The property is owned by the defendants, Patrick and Ann DiBenedetto, and was needed to complete the construction of an interchange at Beverly Road and the Northwest Tollway in the village of Hoffman Estates (Village). The interchange would serve the Village's Western Development Area which consists of approximately 2700 acres of land. Sears, Roebuck and Co. (Sears) occupies approximately 780 acres of the Western Development area.

In 1989, Sears anticipated moving its headquarters outside Illinois. To keep Sears' operations within Illinois, the State offered various tax and other incentives pursuant to the Economic Development Area Tax Increment Allocation Act. (20 ILCS 620/1 (West 1992)). On February 26, 1990, the Village and Sears entered into an Economic Development Agreement which required Sears to develop a portion of the Western Development area, not then owned by Sears, and to cooperate in the construction of public improvements including water, storm and sanitary sewer facilities to benefit all properties within the vicinity of Sears' project area.

On July 31, 1990, the Village entered into an Annexation and Development Agreement with Sears which supplemented the Economic Development Agreement and specified Sears' responsibilities in developing the project area. The cost of land acquisition was to be advanced by Sears. In the agreement, the Village and Sears acknowledged their intention that the Village enter into an agreement with the Authority for construction of the Interchange Project upon terms agreeable to the Village and Sears:

"E. Funding of Beverly Interchange.

(1) It is the Parties' intention that the Village enter into an agreement (the Beverly Interchange Agreement) with [the Authority] for construction of the Beverly Interchange upon terms consistent with this Exhibit "N" and agreeable to the Village and the Developer. The Village shall use its best efforts to take all actions necessary to comply with its obligations under the Beverly Interchange Agreement and shall pay all amounts due under the Beverly Interchange Agreement upon advance of such funds to the Village by Developer."

The Authority, on November 29, 1990, adopted Resolution No. 13139 authorizing the Authority to enter into an Interchange Agreement with the Village to share the task of constructing and maintaining the interchange at the intersection of Beverly Road and the Northwest Tollway. The Village Board authorized and approved two agreements on December 17, 1990: a Letter Agreement between the Village and Sears and the Interchange Agreement between the Village and the Authority. On December 20, 1990, the Authority executed an Interchange Agreement with the Village.

Under the Interchange Agreement, the Authority agreed in part to prepare the contract plans, receive the bids and award the construction contract for the Interchange Project after receiving approval of the plans from the Village. The Interchange Agreement alsoprovided for the acquisition of the necessary property to complete the Interchange Project:

"The Village agrees to attempt to timely acquire, at their sole cost and expense, in the name of the Authority and in substantial accordance with the Authority's policies and procedures, all right-of-way and easements required for or incidental to the construction of the Project. The Authority shall not be obligated to proceed with the construction of the Project until all such right-of-way has been acquired. Provided, however, that if the Village gives the Authority written notice that it has been unsuccessful at acquiring all or any portion of such right-of-way and easements, then the Authority shall use all powers granted to it by law or in equity to acquire such rights-of-way and easements."

On December 20, 1990, the Village and Sears entered the Letter of Agreement which recorded Sears' acknowledgment of the execution by the Village of the Interchange Agreement with the Authority.

On November 28, 1990, Homart Development Company, a wholly owned subsidiary of Sears, negotiating on Sears' behalf, tendered an offer to the defendants for the acquisition of their property for the price of $800,000. (Homart also negotiated with two other property owners.) Homart increased that offer to $830,000 on June 28, 1991. Homart and the defendants continued to negotiate the price of the property for the next three years, and on December 2, 1993, Homart, acting on Sears' behalf, offered $1,556,000.

On January 14, 1994, Homart notified the Authority that it could not reach a mutually acceptable deal with the defendants; therefore, Homart, on behalf of Sears and the Village, requested that the Authority commence eminent domain proceedings. The Authority received a certified appraisal report fixing the value of the property at $1,022,000. This figure took into account the value of the remainder before and after the taking. On February 4, 1994, the Authority made a written offer to the defendants for the full appraised value of the Property, or $1,022,000. The defendants' attorney contacted the Authority on February, 16, 1994, requesting a construction schedule for the Interchange Project as well as any other pertinent documents. The Authority replied on February 25, 1994, with appraisals for the property and other documentation.

Homart informed the Authority by letter dated February 21, 1994, that Sears' offer of $1,556,000 would remain open even in light of the Authority's lower offer and of the defendants' rejection of the Authority's offer. No counteroffer was extended by the defendants; and no other appraisals were submitted by the defendants. The defendants made no reply to the Authority's correspondence datedMarch 14, 1994, confirming that a negotiated settlement could not occur between the Authority and the defendants due to the differing opinions regarding the effect of construction on the remainder property.

On April 21, 1994, the Authority's Board of Directors adopted a motion to amend Resolution 13557 which authorized the legal department of the Authority to hire outside counsel to acquire necessary right-of-way which Hoffman Estates was unable to acquire. The Authority filed its complaint for condemnation on April 19, 1994. On May 24, 1994, the defendants filed a traverse and motion to dismiss, and later filed an amended traverse and motion to dismiss. The amended traverse contained four claims: (1) improper delegation of authority, denial of equal protection and lack of public use by the Authority; (2) lack of good faith negotiations between the Authority and the ...


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