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03/19/97 KLEINSCHMIDT INC. BANK WAUKEGAN v. COUNTY

March 19, 1997

KLEINSCHMIDT INC.; BANK OF WAUKEGAN, AS TRUSTEE; AND HARRY S. GAPLES, PLAINTIFFS-APPELLANTS,
v.
THE COUNTY OF COOK; THE COUNTY OF LAKE; AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, AS TRUSTEE; AND CORPORATE 500 CENTRE PHASE 1, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Lake County. No. 95--CH--501. Honorable Peter M. Trobe, Judge, Presiding.

Rehearing Denied May 8, 1997. Released for Publication May 8, 1997. As Corrected May 8, 1997.

The Honorable Justice Thomas delivered the opinion of the court. Geiger, P.j., and Colwell, J., concur.

The opinion of the court was delivered by: Thomas

JUSTICE THOMAS delivered the opinion of the court:

The plaintiffs, Kleinschmidt Inc. (Kleinschmidt), Bank of Waukegan, as trustee under a trust agreement dated November 20, 1986, and known as trust No. 1898, and Harry Gaples, filed this declaratory judgment action against the defendants, the County of Cook (Cook County or the County), the County of Lake, American National Bank and Trust Company of Chicago, as trustee under an agreement dated August 31, 1983, and known as trust No. 59087, and Corporate 500 Centre Phase 1 (Corporate 500), seeking to set aside a conveyance of land to the County as an unconstitutional taking. After the parties filed cross-motions for summary judgment, the trial court granted the defendants' motions for summary judgment. The plaintiffs appeal.

The record reveals that in 1985 Kleinschmidt was a division of SCM Corporation, which owned the beneficial interest in a tract of land that had 276 feet of frontage on the north side of Lake Cook Road east of the Milwaukee/Soo Line railroad tracks. The property was on the Lake County side of the road and was improved with Kleinschmidt's industrial building. The south 276 feet of the frontage was unimproved. Harry Gaples, president of Kleinschmidt, eventually purchased Kleinschmidt and the land in question from SCM Corporation.

In September 1985, Cook County adopted a resolution which authorized improvement of Lake Cook Road. The project consisted of expanding the street and creating a highway underpass at the railroad tracks east of the plaintiffs' property. Between the plaintiffs' property and the railroad tracks to the west was a 37-acre tract of land owned by a land trust in which defendant Corporate 500 held the beneficial interest. The proposed project called for the elimination of Corporate 500's access road off of Lake Cook Road to the Corporate 500 property. Cook County informed the plaintiffs that since Corporate 500's Lake Cook Road entrance was being eliminated as a result of the project, it would be necessary to construct an access road to the east, across the vacant front portion of the plaintiffs' property. In November and December 1985, Cook County requested the plaintiffs' permission to survey their property for the project. The plaintiffs refused to allow the survey at that time.

On January 18, 1986, Corporate 500 wrote Cook County a letter offering to convey certain easements necessary to complete the project in exchange for acquiring a portion of the plaintiffs' land to build and landscape a new Lake Cook access road. In spring 1986, Corporate 500 offered to buy a portion of the plaintiffs' property to construct the access road. On August 22, 1986, the County was informed that the plaintiffs were unwilling to sell a portion of their property to Corporate 500.

In October 1986, the plaintiffs eventually allowed their land to be surveyed by the County. In August 1987, an acquisition plat was prepared. The parcel to be taken consisted of approximately 38,422 square feet and followed a curvilinear line from the northern most portion of the property running in a southeasterly direction to Lake Cook Road. This plat left part of the plaintiffs' front grass. Gaples, however, did not want to be left with an irregular shaped remainder so he requested that the County acquire a rectangular shaped parcel that ran straight easterly from the northern most portion of the tract. Pursuant to Gaples' request, Cook County prepared a second plat that conformed to a rectangular configuration. The legal description for the taking of this revised parcel consisted of 59,931 square feet and was referred to as scheme B.

On July 3, 1989, Cook County passed a resolution describing a portion of the plaintiffs' property, tract 21-04, as property "to be taken," noting that it was necessary for the construction of a highway improvement and directing that an agreement be attempted with the owner for the purchase of the property. The resolution further provided that if an agreement could not be reached, then proceedings should be initiated under the eminent domain provisions of the Code of Civil Procedure (735 ILCS 5/7--101 et seq. (West 1994)) to determine the amount of compensation to be paid. A negotiation meeting was set for September 12, 1989. On August 25, 1989, Cook County sent the plaintiffs a letter listing the agenda for the meeting. Among the items listed to be discussed at the meeting were "tender of offer for the required right of way" and the "condemnation option."

On September 12, 1989, the County offered Gaples $575,000 for the property. Thereafter, Gaples submitted a counteroffer of $615,000. The parties eventually agreed to a purchase price of $600,000. The closing took place in December 1989, with funds for the purchase coming from the Illinois Motor Fuel Tax fund. To obtain a real estate tax exemption for the property, the Cook County State's Attorney's office filed an affidavit stating that the property was acquired in lieu of condemnation for construction of a roadway improvement.

After the acquisition of a portion of the plaintiffs' land, the project was delayed and had not begun by 1994. At that time, Cook County was negotiating with Corporate 500 about the acquisition of Corporate 500's entrance from Lake Cook Road immediately west of the portion conveyed by the plaintiffs to Cook County. Corporate 500 was making a claim for damage to the remainder of its property in addition to a claim for the portion of its property the County actually sought for its project.

On July 7, 1994, Cook County and Corporate 500 entered into an agreement in which the County agreed to pay Corporate 500 $312,000 for its land. The County also agreed to convey a portion of tract 21-04 to Corporate 500. Pursuant to the agreement, the County was required to construct the access road and install the necessary signs. The County was also required to perform certain landscaping work in the area surrounding the access road. The plaintiffs learned of the agreement when Corporate 500 applied to the Village of Deerfield for construction permits to landscape and erect fences on the property, asserting the agreement as its title to the property.

On June 20, 1995, the plaintiffs filed their complaint, seeking a declaration that the contract for the conveyance of a portion of tract 21-04 to Corporate 500 was illegal on the grounds that the plaintiffs had conveyed the property to the County under the threat of condemnation thereby exercising the constitutional right of eminent domain, making it constitutionally impermissible for the County to subsequently convey the land to a private party such as Corporate 500. The defendants filed motions for summary judgment on the ground that a constitutional "taking" did not occur since the plaintiffs voluntarily conveyed their property to the County and a petition for condemnation was not filed. The plaintiffs filed a cross-motion for summary judgment. The trial court granted the defendants' ...


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