Appeal from the Circuit Court of McHenry County. No. 00--CH--316 Honorable Michael T. Caldwell, Judge, Presiding.
The opinion of the court was delivered by: Justice McLAREN
Plaintiff, the City of Marengo, filed a complaint alleging that defendants, Walter Pollack and Northwest Pallet Supply Company (Northwest), were violating plaintiff's 1992 ordinance limiting defendants' outdoor storage space to 1,000 square feet. Defendants' affirmative defenses alleged a legal nonconforming use and that plaintiff was barred by laches from enforcing the earlier ordinance, which limited the outdoor storage area to 10% of the lot size. After a bench trial, the court found that defendants were entitled to continue using 10% of their property for outdoor storage. The trial court rejected defendants' laches claim, however. Plaintiff appeals and contends that, because defendants continually violated the earlier ordinance, their use of the property was not a legal nonconforming use. Defendants cross-appeal and argue that the trial court erred in rejecting their laches defense. We affirm.
The only witness during the trial was defendant Pollack. His testimony, the exhibits, and stipulations revealed the following pertinent facts. Pollack owns Northwest, which restores and sells wood pallets. Pollack purchased the subject property in 1986 and shortly thereafter began operating the business from that location. The total area of the property is 99,244 square feet. The property currently has four buildings and at one point had a fifth building, which burned down. One of the buildings was used to store pallets. The neighboring properties contain a cemetery, railroad tracks, a rental business, and an athletic field owned by a church.
Defendants receive broken pallets and immediately repair them. The repaired pallets are stored outside until they are loaded onto trucks and delivered to customers. According to Pollack, the outdoor storage of pallets is essential to the business.
The original zoning ordinance was enacted in 1959 and reprinted in 1973 (1959 ordinance). We note that sometime between 1973 and 1986 the 1959 ordinance was recodified. According to the district map referenced in the 1959 ordinance, the subject property was zoned "D industrial," originally the only industrial classification. One of the many permitted uses was "[i]industrial and manufacturing plants, where the operations are conducted in one or more buildings and not more than ten (10) per cent of the lot or tract is used for the open storage of products, materials or equipment." Marengo Zoning Ordinance §27--602(15) (eff. September 22, 1959). In 1975, the 1959 ordinance was amended to create the "D-1 light industrial" and the "D-2 industrial" classifications. All property zoned "D" was automatically classified as D-2 until reclassified by the zoning board of appeals and the city council. Marengo Zoning Code §150.60 (eff. October 13, 1975). Defendants' property never was reclassified. Accordingly, plaintiff claimed that, when defendants purchased the property in 1986, they were subject to the 10% limit, which was 9,924 square feet.
From 1986 until shortly before the trial, defendants used between 12,000 and 16,000 square feet of outdoor area to store the pallets. The height of the pallet stacks ranged from 12 to 30 feet. During the summer of 2000, the trial court entered an agreed judgment addressing various zoning issues. The agreement called for defendants to reduce the height of the pallet stacks to make the property more aesthetically pleasing. Defendant complied, and as a result the total outdoor storage area increased to 22,375 square feet. A dispute arose over some aspects of the judgment, and the trial court vacated it. If defendants resumed using higher stacks, the outdoor storage area would drop to its previous levels. In August and September 2000, defendants spent $10,000 to construct a 15-foot-high fence running along the north and east boundaries of the property.
Pollack testified that the storage levels represent a 7- to 10-day inventory, which is necessary to meet customer demand. If defendants were required to reduce the storage area, they would not be able to operate the business on the site.
The current zoning ordinance took effect in 1992. It merged the D-1 and D-2 industrial districts into a single "I industrial" district. Marengo Zoning Ordinance §3.12--1 et seq. (eff. November 9, 1992). One of the permitted uses was outdoor storage. The ordinance provided, however, that "[t]he outdoor storage areas shall be located in the side or rear yard adjacent to the main structure and not exceed 1,00 square feet in area." Marengo Zoning Ordinance §3.12--3(A)(22) (eff. November 9, 1992). In 1995, the 1992 ordinance was amended to allow an outdoor storage area exceeding 1,000 square feet upon the granting of a special use permit. Marengo Zoning Ordinance §3.12--3(A)(22) (eff. August 14, 1995).
In 1999, defendants planned to construct a loading dock. When plaintiff learned of the plan, it inspected defendants' property. On April 21, 1999, plaintiff sent defendants a letter informing them that their outdoor storage area exceeded 1,000 square feet. In July 1999, defendants sought a special use permit. The application went before plaintiff's planning commission, and ultimately plaintiff's city council denied it. Defendants did not seek administrative review of the decision.
Before 1999, plaintiff never complained to defendants about the outdoor storage area. Plaintiff never took any affirmative action, however, to allow the excess storage space. Defendants had ongoing contact with fire inspectors who came to the property and told defendants where the pallets could be stored, how high they could be stacked, and where the fire lanes should be located. In 1991 and 1997, plaintiff inspected the property before defendants erected machine sheds on the site. If, after these inspections, plaintiff had informed Pollack that his use of the property violated the 1,000-square-feet limitation, he would have addressed the problem and would not have built the new structures unless the issue was resolved.
The trial court found that at the time defendants began using the property they had a right to use up to 10% of the lot as outdoor storage and that after 1992 that right continued as a legal nonconforming use. The court also found, however, that plaintiff's mere inaction and delay in enforcing its ordinances did not give rise to laches or equitable estoppel. Therefore, defendants did not have the right to continue using more than 9,924 square feet of the lot for storage. Plaintiff timely appealed, and defendants timely cross-appealed. See 155 Ill. 2d R. 303(a)(3).
Before addressing plaintiff's argument on appeal, we must address defendants' contention that the 10% storage limit never applied to them. Defendants raised this argument in the trial court, but the court did not specifically address it. After reviewing the ordinance, we conclude that defendants' argument is meritless.
According to defendants, because they did not operate an industrial or manufacturing plant, the 10% outdoor storage limit did not apply to them. When defendants purchased the property, the ordinance provided:
"Within any 'D-2' Industrial District no *** premises shall be used *** except for one or more ...