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02/05/96 CHARLENE HELTON DRAYSON v. GEORGE W. WOLFF

February 5, 1996

CHARLENE HELTON DRAYSON, PLAINTIFF-APPELLANT,
v.
GEORGE W. WOLFF, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. Honorable LESTER FOREMAN, Judge Presiding.

The Honorable Justice Buckley delivered the opinion of the court: Wolfson and Braden, JJ., concur.

The opinion of the court was delivered by: Buckley

The Honorable Justice BUCKLEY delivered the opinion of the court:

Plaintiff, Charlene Drayson, filed an action in the circuit court seeking a declaratory judgment that certain conditions and a right to repurchase contained in the deed from defendant, George Wolff, to plaintiff's predecessor in interest, are illegal restraints on alienation. Plaintiff also requested a judgment that she is entitled to a permanent, "transferrable" easement across the remaining property of defendant. Upon being served, defendant removed the action to Federal court on the basis of diversity of citizenship. The district court remanded the case to the circuit court because it found that it did not have jurisdiction due to the lack of a case or controversy between the parties.

While the case was pending in Federal court, the parties filed motions for summary judgment. After the case was remanded to the circuit court, plaintiff requested a hearing on the summary judgment motions filed in Federal court. After a hearing, the circuit court granted summary judgment in favor of defendant, finding the terms of the deed to be reasonable restraints on alienation. Plaintiff now appeals the circuit court order.

BACKGROUND

Since about 1953, defendant's family owned 30 acres of real property located in Hanover Township, Cook County, Illinois. This property was used as the family residence until October 1980, when defendant severed and sold approximately 4.577 acres of the property. This parcel, on which the home stands, was conveyed to LaSalle National Bank as trustee for Carl LoDico. In order to preserve the character of this home and land, defendant conveyed the land subject to conditions subsequent and retained a right to repurchase. He did this with the intention of rejoining this property with the remainder of the original 30 acres at some point in the future.

The deed at issue grants the property subject to the conditions and limitations set forth in "Exhibit B," which is attached to the deed. Exhibit B contains a section titled "Deed Conditions," which is included in the appendix of this opinion, but will be briefly summarized here. This section restricts the use of the property to only single-family residential purposes for a period of 39 years *fn1 Only one dwelling house of at least 3,000 square feet is permitted on the property and the existing home is to be maintained. The deed is also subject to the condition that all real estate taxes be paid in a timely fashion. The instrument specifically states that the conditions are to be construed as express conditions subsequent as between the parties, "their heirs, successors and assignees." Finally, the instrument gives the grantor and his successors and assignees the right to retake the property if a grantee fails to comply with any of the conditions and does not remedy a breach after the grantor has given notice.

Defendant still owns the remaining 24 acres, which are contiguous to plaintiff's property in three directions. The boundary line between these properties is exceedingly irregular. To allow defendant an opportunity to repurchase the home some day in the future, exhibit B of the original deed also reserved in defendant a right to repurchase if the property was ever sold or assigned. The right to repurchase is also included in the appendix, but the terms can be summarized as follows.

This section provides that for a period of 39 years, the property cannot be sold, assigned, or otherwise transferred without first providing the grantor with the opportunity to purchase the property. Written notice of the grantee's intent to transfer must be given to the grantor not less than 60 days prior to the contemplated transfer. The grantor has 30 days from the date he receives notice of an intent to transfer to exercise the right to repurchase. The sale price is to be set as the lesser of the price set forth in a sales contract with a third party or the fair market value as determined by three appraisers.

After the original sale to LoDico, the property was sold in 1985 to Mr. and Mrs. Perez, with an explicit waiver by defendant of his right to repurchase for that sale. Plaintiff and her late husband acquired title to the property in July 1991. The deed at issue here is recorded in plaintiff's chain of title.

On August 6, 1993, plaintiff commenced this action seeking a declaration that the deed conditions and the right to repurchase together constitute an unreasonable and invalid restraint on alienation. Plaintiff also sought a declaration that the right to repurchase was not binding upon her as a remote grantee, and asked for a permanent, unlimited, and "transferable" easement over defendant's property.

Defendant removed the case to Federal court and plaintiff filed a motion for partial summary judgment. Defendant made a cross-motion for partial summary judgment on the merits, and also sought dismissal of the complaint on the grounds that there was no actual case or controversy, it was not ripe and plaintiff lacked standing. The Federal district court found it did not have jurisdiction under article III, section 2, of the United States Constitution, due to the lack of an actual case or controversy. U.S. Const., art. III, ยง 2.

The Federal court initially dismissed the case, but after reconsideration it remanded the case to the circuit court, following Smith v. Wisconsin Department of Agriculture, Trade & Consumer Protection (7th Cir. 1994), 23 F.3d 1134. In Smith, the Seventh Circuit held that when a district court finds it lacks jurisdiction, due to the absence of a case or controversy, in a case that has been removed to Federal court, it must remand the case back to the State court from which it originally came. Smith, 23 F.3d at 1142.

After the case was remanded, plaintiff requested that the circuit court hear the summary judgment motions filed in Federal court. Following the hearing, the circuit court granted partial summary judgment in favor of defendant. The court made no determination on the easement issue. This appeal followed.

ARGUMENT(S)

I. CASE OR CONTROVERSY

Initially, this court must determine whether there was an actual controversy before the circuit court in this declaratory judgment action. "Declaratory judgments are designed to settle and fix the rights of the parties before there has been an irrevocable change in their positions in disregard of their respective claims of right, and the procedure should be used to afford security and relief against uncertainty with a view to avoiding litigation, not toward aiding it." ( Lihosit v. State Farm Mutual Automobile Insurance Co. (1993), 264 Ill. App. 3d 576, 580, 636 N.E.2d 625, 628, 201 Ill. Dec. 193.) The decision to grant or deny a request for declaratory relief will not be overturned absent an abuse of discretion. Lihosit, 264 Ill. App. 3d at 580, 636 N.E.2d at 628.

Although the declaratory judgment act (Act) should be applied liberally ( Illinois Gamefowl Breeders Association v. Block (1979), 75 Ill. 2d 443, 452, 389 N.E.2d 529, 532, 27 Ill. Dec. 465), the Act requires that there be an "actual controversy" and that the party seeking relief have a tangible, legal interest in that controversy. ( Underground Contractors Association v. City of Chicago (1977), 66 Ill. 2d 371, 375-76, 362 N.E.2d 298, 300-01, 5 Ill. Dec. 827; 735 ILCS 5/2-701 (West 1992).) Where a matter is contingent or uncertain, a court will not declare the rights of the parties to that matter. ( Continental Illinois National Bank & Trust Co. v. Bailey (1982), 104 Ill. App. 3d 1131, 1139, 433 N.E.2d 1098, 1103-04, 60 Ill. Dec. 860.) However, "an actual controversy may be found 'where the mere existence of a claim, assertion or challenge to the plaintiff's legal interests portends the ripening seeds of litigation.'" First of America Bank, Rockford, N.A. v. Netsch (1995), 166 Ill. 2d 165, 174, 651 N.E.2d 1105, 1109, 209 Ill. Dec. 657, quoting Stone v. Omnicom Cable Television of Illinois, Inc. (1985), 131 Ill. App. 3d 210, 214, 475 N.E.2d 223, 227, 86 Ill. Dec. 226.

In Underground Contractors, the supreme court explained "actual controversy" in the following way:

"'Actual' in this context does not mean that a wrong must have been committed and injury inflicted. Rather, it requires a showing that the underlying facts and issues of the case are not moot or premature, so as to require the court to pass judgment on mere abstract propositions of law, render an advisory opinion, or give legal advise as to future events. [Citations.] The case must, therefore, present a concrete dispute admitting of an immediate and definitive determination of the parties' rights, the resolution of which will aid in the termination of the controversy or some part thereof." Underground Contractors Association v. City of Chicago (1977), 66 Ill. 2d 371, 375, 362 N.E.2d 298, 300, 5 Ill. Dec. 827.

The circuit court did not abuse its discretion in granting a declaratory judgment. An actual controversy existed between the parties as to whether the deed provisions at issue are valid. While it is true that plaintiff has not failed to comply with the conditions or right to repurchase, the mere existence of these deed provisions provides the court with a concrete basis on which to declare the parties' rights. Plaintiff's allegations that these provisions are illegal clouds on her title create the controversy here. There is nothing hypothetical or ...


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