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03/07/96 RIVER PARK v. CITY HIGHLAND PARK

March 7, 1996

RIVER PARK, INC.; SPATZ AND COMPANY; AND COUNTRY CLUB ESTATES, LTD., PLAINTIFFS-APPELLANTS,
v.
THE CITY OF HIGHLAND PARK, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Lake County. No. 94--L--1637. Honorable Bernard E. Drew, Jr., Judge, Presiding.

As Modified on Denial of Rehearing June 12, 1996. Released for Publication July 23, 1996.

The Honorable Justice Hutchinson delivered the opinion of the court: Doyle and Thomas, JJ., concur.

The opinion of the court was delivered by: Hutchinson

Modified Upon Denial of Rehearing

The Honorable Justice HUTCHINSON delivered the opinion of the court:

Plaintiffs, River Park, Inc. (River Park), Spatz & Company (Spatz), and Country Club Estates, Ltd. (CCE), appeal the trial court's order dismissing their seven-count amended complaint against defendant, the City of Highland Park. The present case involves plaintiffs' attempts to have certain property rezoned for development. Defendant filed its motion to dismiss plaintiffs' amended complaint pursuant to section 2--615 of the Civil Practice Law. See 735 ILCS 5/2--615 (West 1994). In dismissing plaintiffs' amended complaint with prejudice, the trial court found, inter alia, that (1) plaintiffs were barred from recovering monetary damages under the Local Governmental and Governmental Employees Tort Immunity Act (Act) (745 ILCS 10/1--101 et seq. (West 1994)); (2) plaintiffs' tortious interference counts failed because plaintiffs failed to show a valid business expectancy and actions on defendant's part directed towards third parties; (3) counts II (breach of contract), III (malfeasance), and IV (abuse of governmental power) failed to state legally recognized causes of action; and (4) count VII, requesting monetary damages pursuant to section 11--12--8 of the Illinois Municipal Code (Code) (65 ILCS 5/11--12--8 (West 1994) ("Failure to act upon plat")), was barred by section 11--12--8's requirements and the applicable statute of limitations. We affirm in part, reverse in part, and remand.

Plaintiffs essentially raise three issues. They contend the trial court erred by (1) finding that the Act barred an action seeking monetary damages against defendant; (2) dismissing each count of their amended complaint; and (3) failing to find that plaintiffs had a legally enforceable right to have the property rezoned.

The present case involves a section 2--615 motion; therefore, the following facts are drawn exclusively from plaintiffs' amended complaint. See, e.g., In re Estate of Davis, 225 Ill. App. 3d 998, 1000, 168 Ill. Dec. 40, 589 N.E.2d 154 (1992) (motion must be dispensed with "solely on the basis of the pleadings"). River Park owned the 162-acre parcel of property known as the Highland Park Country Club. Spatz, a builder and developer, purchased the capital stock of River Park. CCE subsequently purchased a portion of the 162 acres for development.

The first petition for rezoning was filed in July 1988. Spatz, as River Park's authorized agent, filed the petition before defendant's plan commission. The petition requested that the 162-acre parcel be rezoned from R-1 zoning to a planned residential development (PRD) and an R-4 residential zone. Certain portions of the parcel were to remain zoned R-6. It was during the rezoning process that Spatz purchased River Park from La Salle National Bank of Chicago (La Salle). The purchase was partially based on a purchase money loan secured by a mortgage. This financing structure required approval of the final plats within one year; the failure to secure approval would result in default and foreclosure.

Spatz appeared before the commission "numerous times" for both preapplication hearings and to discuss the proposed rezoning. The commission discussed preapplication matters with Spatz between April 1988 and August 1988. From August 1988 to October 1988 Spatz appeared for public hearings which covered the proposed rezoning "in repetitious detail." It was during this time period that Raymond Geraci (Geraci), a member of defendant's city council, formed a "citizen's commission" designated as "Save the Open Space" (SOS). The amended complaint states SOS was formed "for the purpose of encouraging [defendant] to purchase the club parcel for the purpose of stopping [Spatz] from rezoning and developing the property." (Emphasis added.) Geraci appeared at city council meetings and advocated that defendant purchase the parcel to prevent plaintiffs' development.

The commission largely approved the petition for rezoning. On November 14, 1989, the commission approved the petition to rezone portions of the parcel from R-1 to R-4, to leave certain portions zoned R-6, and to create the PRD (subject to certain modifications). The commission decided to recommend that plaintiffs' petition be approved. The commission notified defendant's city council of the recommendation on November 22, 1989.

During Spatz's appearances before the commission, "executive personnel" of defendant performed a study to determine "the economic feasibility of the purchase by [defendant] of the club parcel." This study was performed at the direction of defendant. Although Spatz was appearing before the commission, defendant did not inform Spatz of the study, make an offer for the parcel, or even apprise him defendant might be interested in purchasing the parcel. On or about January 22, 1990, the feasibility study was submitted to defendant's city council in executive session.

Defendant's city council approved the commission's recommendation and approved the preliminary development plan on January 22, 1990. Defendant's zoning ordinance required the submission of "a final development plan and final engineering plans." The plans were to be submitted first to the commission and then to the city council. This was done to demonstrate that the plans were "in conformity with the preliminary plan approved and the final engineering in accord with the applicable statutes and ordinances." Defendant's zoning ordinance requires that the city engineer review the engineering plans for all proposed developments to ensure the plans comply with all applicable ordinances, laws, and regulations. The ordinance requires that a property owner presenting a development plan must secure the city engineer's approval within "one year of the preliminary plat approval by the city council." Without this approval, any development plan is deemed withdrawn.

Thus began an eight-month long struggle to have the city engineer review and approve plaintiffs' zoning plan. After receiving approval of the preliminary development plan on January 22, 1990, Spatz directed its engineers to prepare the final plans. In April 1990, three months after securing city council approval, Spatz submitted a complete set of engineering plans to the city engineer for review and approval. Despite Spatz's repeated requests:

"the city engineer refused to review or examine the plans or indicate any deficiencies therein. Although often requested, the city engineer continuously refused to meet with [Spatz and River Park] and their engineers to explain the delay, to discuss the engineering plans, to perform any review thereof, or to discuss any insufficiencies in the plans." (Emphasis added.)

The city engineer finally met with Spatz's engineers on October 5, 1990. The engineers agreed that 95% of the site engineering plans, with certain corrections and modifications, conformed with all city requirements. The city engineering department agreed that they would review the remaining 5% of the plans and inform Spatz and River Park of the engineering criteria required for approval. The city engineering department agreed to provide these criteria by December 1, 1990. This would allow Spatz and River Park to complete final modifications and meet their January 22, 1991, deadline. Spatz and River Park "promptly provided" the city engineer with corrected plans for the first 95% of the plans. These corrected plans satisfied all of the city engineer's comments and objections. Still, "the city engineer refused to provide the criteria required to complete the remaining 5% of the plans." (Emphasis added.)

December 1, 1990, came and went without the promised action by the city engineer. With the deadline looming, Spatz requested that the commission consider the zoning petition before January 22, 1991, without the city engineer's approval. The commission refused. It cited the city engineer's failure to act on the plans. "During the pendency" of the city engineer's review, an attorney for either Spatz or River Park had formally advised defendant and its engineering department that without approval of the final plats within the one year La Salle would foreclose.

On January 22, 1991, the city council withdrew their preliminary approval of the zoning and development plans. Defendant informed Spatz "that if it wished the property rezoned as previously approved, it would be required to restart the commission review process completely from the beginning."

River Park then filed for bankruptcy. As part of its reorganization plan, River Park entered into an agreement to sell 34 acres of the 162-acre parcel to CCE. This would give River Park the financing required to restart the zoning process. After obtaining the reorganization plan, plaintiffs filed a new zoning petition in March 1992. This new petition requested R-4 zoning for portions of a 34-acre tract. The remaining 128 acres would remain a golf course.

On June 23, 1992, La Salle commenced foreclosure proceedings. Plaintiffs negotiated a right of repurchase in exchange for a deed in lieu of foreclosure. This allowed plaintiffs to continue the second zoning proceeding. La Salle and plaintiffs agreed that if plaintiffs obtained the ...


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