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First Bank and Trust Company of Illinois

March 17, 2003

FIRST BANK AND TRUST COMPANY OF ILLINOIS, AS TRUSTEE U/T/A DATED MARCH 28, 2000, AND KNOWN AS TRUST NO. 10-2377; FIRST BANK AND TRUST COMPANY OF ILLINOIS, AS TRUSTEE U/T/A DATED NO. 10-2395 AND NO. 10-2396; APRIL 11, 2000, AND KNOWN AS TRUSTS AND GLENBROOK DEVELOPMENT OF NML, L.L.C., AN ILLINOIS LIMITED LIABILITY COMPANY, PLAINTIFFS-APPELLANTS,
v.
THE VILLAGE OF ORLAND HILLS, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County, Illinois, Chancery Division. No. 00 CH 17270 The Honorable Nancy J. Arnold, Judge Presiding.

The opinion of the court was delivered by: Justice Gordon

UNPUBLISHED

Plaintiffs-appellants First Bank and Trust Company of Illinois, as trustee under trust agreement dated March 28, 2000, and as trustee under trust agreement dated April 11, 2000, and Glenbrook Development of NML (collectively Glenbrook, or as named) appeal from the trial court's order granting defendant-appellee Village of Orland Hills' (Orland Hills) motion to dismiss with prejudice. Glenbrook asks that we reverse the court's dismissal of its complaint and enter judgment in its favor or, alternatively, that we reverse and remand this cause for further proceedings. For the following reasons, we affirm.

BACKGROUND

This cause involves property located at 171st Street and LaGrange Road, which was divided into lots 1, 2, 3 and 4. A&M Limited Partnership (A&M) was the original owner and Formula Outdoor, Inc. (Formula), was the original developer of the property. *fn1 On November 3, 1999, Orland Hills entered into an annexation agreement with A&M and Formula for the property, binding these parties and their successors in interest. Under the annexation agreement, Orland Hills is responsible for extending all water service to the property. In addition, section 7 of the agreement states, in pertinent part:

"SECTION 7: Disconnection. *** After closing developer may petition to disconnect on or before December 30, 2000 and [Orland Hills] will grant such petition."

Citizens Utilities Company of Illinois (Citizens) provided water service to Orland Hills, as well as to other neighboring cities, such as the Village of Tinley Park (Tinley Park). Soon after Orland Hills entered into the annexation agreement, it sought to have Citizens extend water service to the property. Citizens and Tinley Park were opposed to this extension. Orland Hills filed a complaint for declaratory judgment against Citizens and Tinley Park, seeking a declaration that Citizens be obligated to provide water to the property (the Citizens litigation). *fn2

Meanwhile, Tinley Park filed a motion for preliminary injunction to contest the validity of Orland Hills' annexation of the property. During a hearing conducted on January 24, 2000, Formula's president, Douglas Engberg, testified with respect to the annexation agreement. He stated that Formula had contracted to buy the property from A&M and that, once ownership was transferred, Formula planned to sell a portion of the property (lots 2, 4 and part of 1) to Glenbrook. Engberg also testified that Formula and Orland Hills had entered into an amendment to the annexation agreement affecting Formula's right, as developer, to petition for disconnection of the property. Engberg averred that the amendment, once finalized, would eliminate the language in the annexation agreement with respect to the right to disconnect. Engberg testified that, instead, the right to disconnect would be dependent upon the resolution of the Citizens litigation; if Orland Hills were victorious, the disconnection right could not be exercised. At the close of the hearing, Tinley Park's motion was denied and summary judgment was entered in favor of Orland Hills. *fn3

On February 9, 2000, A&M completed its sale of the property to Formula, which was now both owner and developer. On that same date, Orland Hills and Formula finalized their amendment to the annexation agreement. The amendment contains five recitals, A through E. Recital A refers to the original annexation agreement. Recital B refers to the then-pending Citizens litigation and Orland Hills' efforts to effect a judicial declaration that Citizens is obligated to provide water to the property. Recital C cites that language in the annexation agreement (section 7) that gave the developer the right to disconnect on or before December 30, 2000. Recital D states that the parties "acknowledge that the reason for granting a right of disconnection is directly related to the possibility that Citizens be found not obligated to service the *** property with water." Recital E concludes that if Orland Hills were to prevail in the Citizens litigation, thereby obligating Citizens to provide water to the property by final court order, then Orland Hills would immediately proceed with any construction for water service and the owner and developer would waive their right to disconnect. The body of the amendment binding the parties and their successors in interest states:

"That upon entry of a final order in [the Citizens litigation] *** declaring that [Citizens] is obligated to provide water service to the property which is the subject matter of this Annexation Agreement and Amendment thereto, Owner and Developer agree to release and waive their right to disconnect from [Orland Hills]. Developer and Orland Hills will immediately do all things necessary to initiate and complete the construction of the necessary infrastructure to bring sewer and water to the lot line of the *** property."

At some point thereafter, Orland Hills and Formula signed a letter of interpretation (Letter) comprised of three numbered paragraphs discussing the amendment and the right to disconnect. Paragraph one states that the December 30, 2000, disconnection date in the original annexation agreement was designed to accommodate the possibility that Orland Hills would not be able to provide water to the property. Paragraph two states that the purpose of the amendment "is to eliminate the December 30, 2000 deadline and relate the Developer's right to disconnect to final adjudication of the issues pending in" the Citizens litigation. Finally, paragraph three states that by executing the amendment, the parties thereto intend to "measure" the right to disconnect only by the results of the Citizens litigation and not by any specific date, leaving the developer with the ability to exercise his right to disconnect only if Orland Hills were to lose that litigation.

On April 4, 2000, after the amendment to the annexation agreement was executed and after the Letter was signed by Orland Hills and Formula, Formula sold a portion of the property (lots 2, 4 and part of 1) to First Bank and Trust Company, as trustee of trust number 10-2377, which in turn conveyed separate parts of this portion of the property to trust number 10-2395 and trust number 10-2396. By these conveyances, Glenbrook Development became the successor developer of this portion of the property.

On May 25, 2000, Glenbrook petitioned Orland Hills to disconnect its portion of the property, citing the annexation agreement and noting that it was exercising its right to disconnect before the December 30, 2000, deadline. Orland Hills denied Glenbrook's petition. Glenbrook filed a complaint against Orland Hills, asking the trial court to order Orland Hills to grant its petition to disconnect. In response, Orland Hills moved to dismiss pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1998)) (Code), asserting that under the amendment, Glenbrook's right to disconnect was dependent upon the outcome of the pending Citizens litigation.

The trial court granted Orland Hills' motion with prejudice, finding that there were no genuine issues of material fact precluding it from ruling on the interpretation of the annexation agreement and the amendment. The court found that these documents were unambiguous and that it was clear that the amendment modified the original annexation agreement by "extend[ing] the time to disconnect further, not to a specific date but until a specific event occurs," namely, a resolution of the ...


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