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City of Naperville v. Old Second National Bank of Aurora

February 07, 2002

THE CITY OF NAPERVILLE, PLAINTIFF-APPELLANT,
v.
OLD SECOND NATIONAL BANK OF AURORA, AS TRUSTEE UNDER TRUST AGREEMENT DATED JULY 21, 1967, AND KNOWN AS TRUST NO. 1046; OLD SECOND NATIONAL BANK OF AURORA; JEROME A. AHASIC; ALICE ROSE AHASIC; LEO J. AHASIC; JANET L. AHASIC; CASPER A. AHASIC; MARY ANN AHASIC; WILLIAM J. AHASIC; DELIGHT MICHAEL AHASIC; H&R BLOCK; CIPHER GAME AND HOBBY; DAVID ROE, D/B/A SHEARLOCK COMBS; AND UNKNOWN OWNERS, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County. No. 99-ED-11 Honorable Hollis L. Webster, Judge, Presiding.

The opinion of the court was delivered by: Justice Geiger

UNPUBLISHED

The plaintiff, the City of Naperville (Naperville), appeals from the August 24, 2000, order of the circuit court of Du Page County dismissing its condemnation action. The trial court dismissed the action after finding that Naperville did not make a bona fide attempt to agree on compensation with the owners of the property prior to filing its complaint as required by section 7--102 of the Code of Civil Procedure (the Code) (735 ILCS 5/7--102 (West 1998)). We affirm.

On April 23, 1999, Naperville filed a complaint seeking to condemn the property located at 420-436 Washington Street (the Washington Street property) in Naperville. This property is approximately one-third of an acre and is adjacent to the Du Page River in Naperville. In its complaint, Naperville alleged that it was necessary to acquire the property in order to construct certain improvements to the Naperville River Walk.

The legal owner of the property is defendant Old Second National Bank of Aurora, as trustee under a trust agreement dated July 21, 1967, and known as trust No. 1046. The beneficiaries of the land trust include defendants Delight Michael Ahasic, Leo Ahasic, Sr., Jerome Ahasic, and Casper Ahasic (the Ahasics). On January 11, 2000, the defendants filed a traverse and a motion to dismiss. As subsequently amended, the motion alleged various defenses, including that Naperville failed to make a bona fide attempt to agree on compensation prior to filing suit.

From August 18, 2000, through August 23, 2000, the trial court conducted an evidentiary hearing on the defendants' traverse and motion to dismiss. The following evidence was introduced at the hearing. Beginning in 1997, the Ahasics were involved in litigation in the circuit court of Kane County to wind up a partnership that they had formed (the partnership litigation). Apparently, this litigation was acrimonious, and there were many disagreements among the Ahasics concerning the disposition of certain partnership property. As part of this litigation, the circuit court of Kane County entered an order directing that the Washington Street property be sold. Any sale of the property was subject to the court's approval. Additionally, any partner had the right of first refusal. Steve Stephens was retained as the real estate agent to list and sell the property. Accountant Michael Beilman was appointed by the circuit court to oversee the disposition of all the partnership assets.

Stephens subsequently listed the Washington Street Property for $634,000. Stephens arrived at the listing price as a result of a market analysis he had prepared. In valuing the property, Stephens used three different methods: the cost approach, the market approach, and the income approach. Stephens determined that the value of the property under the cost approach was $532,000; the value of the property under the market approach was $572,000; and the value of the property under the income approach was $634,000. Stephens testified that he decided to utilize the income approach in setting the listing price.

Stephens acknowledged that he was not a licensed real estate appraiser. Stephens also acknowledged that, at the time he performed the market analysis for the property, he did not have a survey, a title report, or any environmental survey for the property. Stephens testified that his analysis assumed that the property was clean and did not have any environmental problems. Stephens acknowledged that the property previously had been used as an automobile dealership. There was also evidence that a dry cleaning service had been operated on the property.

In September 1998, Stephens contacted Peter Crawford and told him that the property was for sale. Crawford was the architect of the Naperville River Walk project. Crawford became interested in the property and contacted Craig Bloomquist, the assistant city manager for Naperville. Naperville subsequently obtained an appraisal that valued the property at $500,000. This appraisal assumed that there were no environmental problems associated with the property. In executive session, Naperville's city council authorized a payment of between $250,000 and $300,000 as its share of the cost of acquiring the property. The Du Page County Forest Preserve District also committed $250,000 as its share of the acquisition cost.

On November 6, 1998, Naperville made its first offer to purchase the property. The offer was for $200,000, and was conveyed to Beilman and Stephens. In presenting Naperville's offer, Bloomquist indicated that the offering price of $200,000 was based upon potential environmental concerns and the expense that would be incurred in demolishing the building on the property. The offer contained a due diligence contingency, which allowed Naperville 90 days to investigate the property's environmental condition as well as other aspects of the property. The offer provided that Naperville could terminate the agreement at its discretion after performing these investigations if it determined the property was not suited for its intended purpose. The Ahasics rejected the offer.

After the rejection of this offer, the Naperville city council authorized condemnation proceedings to obtain the property. However, the city council instructed Bloomquist to continue to negotiate with the Ahasics. On February 1, 1999, Bloomquist conveyed an offer to purchase the property for $325,000. This offer contained the same contingencies as the previous offer concerning the condition of the property. In his letter communicating the offer, Bloomquist indicated that the city council had authorized condemnation proceedings to obtain the property. This offer was rejected by the Ahasics on February 8, 1999. On March 25, 1999, Bloomquist submitted a third offer in the amount of $425,000, with the same contingencies. The Ahasics also rejected this offer.

Other than Naperville's offers, the Ahasics received only one other written offer to purchase the property. This offer was made on December 12, 1998, by Valencia, Inc., in the amount of $550,000. However, the offer contained a number of contingencies, including (1) that the Ahasics pay for a Phase I environmental assessment; (2) that the Ahasics remedy any environmental contamination; (3) that the property be rezoned for Valencia's intended and ancillary uses; and (4) that Valencia could terminate the contract for any reason whatsoever if it determined the property was not suitable for its use. The Ahasics made a counteroffer to Valencia to sell the property for $614,000, on the condition that it withdraw all of the contingencies in their offer. Valencia rejected this counteroffer, but increased the price of its original offer to $590,000 with the same contingencies detailed above.

On February 3, 1999, Valencia's offer of $590,000 was presented for approval to the circuit court presiding over the partnership litigation. The court refused to approve the offer after Leo Ahasic, Jr., Jerome Ahasic, and Casper Ahasic exercised their right of first refusal and agreed to purchase the property on the same terms as the offer. After Naperville filed its condemnation action on April 23, 1999, the circuit court in the partnership litigation granted leave to Leo Ahasic, Jr., Jerome Ahasic, and Casper Ahasic to withdraw their right of first refusal.

After considering all of this evidence and the arguments of counsel, the trial court in the instant case granted the traverse and dismissed the condemnation action. Specifically, the trial court found that Naperville did not make a reasonable attempt to agree with the Ahasics as to the appropriate ...


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