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Covington Court, Ltd. v. Village of Oak Brook

February 22, 1996

COVINGTON COURT, LIMITED, AN ILLINOIS CORPORATION,

PLAINTIFF-APPELLANT,

v.

VILLAGE OF OAK BROOK, AN ILLINOIS CORPORATION, AND WILLIAM BAILES, INDIVIDUALLY,

DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 95 C 407--Suzanne B. Conlon, Judge.

Before BAUER, ROVNER, and EVANS, Circuit Judges.

BAUER, Circuit Judge.

ARGUED NOVEMBER 30, 1995

DECIDED FEBRUARY 22, 1996

It is an old saw that all politics is local. Covington Court ("Covington") learned this lesson recently in the course of its plans to develop Whitehall Park, a 30 acre tract of land in Oak Brook, Illinois. This case involves Covington's attempt to convert a decidedly local issue into a constitutional takings claim. The district court dismissed the action pursuant to Federal Rule of Civil Procedure 12(b)(6), and Covington appeals. We affirm.

I. Background

Because this case comes to us on appeal from the granting of a motion to dismiss under Rule 12(b)(6), we accept any well-pleaded allegations in Covington's complaint as true. By October 1992, Covington had acquired all but one of the 23 residential lots comprising Whitehall Park. William Bailes owned the remaining lot. In early 1993, Covington submitted a plat of resubdivision and other plans to the Oak Brook Board of Trustees in order to develop the property into a residential subdivision. The proposal included an increase in the number of lots from 23 to 39, revocation of an existing preservation plan, and other changes consistent with residential real estate development. Bailes opposed the redevelopment plans, however, and he informed Covington that in light of his connections with Oak Brook officials, the Board would halt the project if his concerns were not met.

The Board never voted but individual Trustees, including the Board's President, informed Covington that its plans would not move forward until Bailes was satisfied. Covington already had a significant investment in Whitehall Park, so it negotiated with Bailes. By February 19, 1993, the negotiations had succeeded. Pursuant to a written agreement, Covington conveyed portions of its lots to Bailes, landscaped Bailes' property, granted specific easements, created a berm to screen the Bailes residence, and erected a fence to separate Bailes' property from the new development. Good fences may or may not make good neighbors, but in exchange for the approximately $100,000 in land and improvements, Bailes withdrew his opposition to Covington's planned development. With Bailes' support, the Board of Trustees promptly approved Covington's subdivision proposal.

The development proceeded according to plan, but two years later Covington filed suit against both the Village of Oak Brook and Bailes, claiming in Count I that the Board's conditioning its approval on a settlement with Bailes constituted an impermissible taking of property for a private purpose. Counts II and III of Covington's complaint alleged that Oak Brook and Bailes conspired to violate its substantive due process rights in violation of 42 U.S.C. secs. 1983, 1985(3). The district court dismissed the complaint, finding that Covington's failure to pursue a final determination from the Oak Brook Board of Trustees prevented it from establishing that the defendants "took" any property at all. In addition, the district court found that Covington failed to state a due process claim because it did not allege that the defendants' actions were based on any constitutionally protected interest. Because Covington failed to pursue the remedies available to it through the state courts, all three counts failed to state a proper claim.

II. Standard of Review

We review the grant or denial of a motion to dismiss under Rule 12(b)(6) de novo. We take all well-pleaded allegations as true, drawing all reasonable inferences in favor of the non-moving party. Starnes v. Capital Cities Media, Inc., 39 F.3d 1394, 1396 (7th Cir. 1994).

The Fifth Amendment provides that no person shall be "deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use without just compensation." While claims under this Amendment involve the taking of property for public purposes, this court also has noted that a governmental taking of property for a private purpose might raise due process concerns under the Fifth Amendment as incorporated by the Fourteenth Amendment. See Gamble v. Eau Claire County, 5 F.3d 285, 287 (7th Cir. 1993). Regardless of the purpose of the taking, however, due process challenges are premature if the plaintiff has not exhausted possible state remedies by which to attack the zoning regulation or other state action. Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 188-89 (1985).

III. Analysis

Covington argues that the requirement that a plaintiff exhaust its state court remedies might not apply when a state takes property for a purely private rather than a public use. See, e.g., Gamble, 5 F.3d at 286-87; Sinaloa Lake Owners Ass'n v. City of Simi Valley, 882 F.2d 1398 (9th Cir. 1989). To this end, Covington claims that Oak Brook's violations of its substantive due process rights ...


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