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LaSalle Bank, National Association v. City of Oakbrook Terrace

January 9, 2006

LASALLE BANK, NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO FIRST STATE BANK AND TRUST COMPANY OF FRANKLIN PARK, AS TRUSTEE UNDER TRUST AGREEMENT DATED JULY 30, 1982 A/K/A TRUST NO. 866; LASALLE BANK, NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO FIRST STATE BANK AND TRUST COMPANY OF FRANKLIN PARK, AS TRUSTEE UNDER TRUST AGREEMENT DATED JULY 30, 1982, A/K/A TRUST NO. 867; DONNA J. KRILICH; AND ROBERT R. KRILICH, SR., PLAINTIFFS,
v.
CITY OF OAKBROOK TERRACE, AN ILLINOIS MUNICIPAL CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs LaSalle Bank, National Association, as Successor Trustee to First State Bank and Trust Company of Franklin Park, as Trustee Under Trust Agreements dated July 30, 1982, and known as Trust Nos. 866 and 867 ("LaSalle Bank"), Donna J. Krilich and Robert R. Krilich, Sr. (collectively, "Plaintiffs") sued Defendant City of Oakbrook Terrace ("Defendant" or the "City") alleging: (1) a 42 U.S.C. §1983 violation of substantive due process rights under the Fourteenth Amendment (Count I); (2) a Section 1983 violation of equal protection under the Fourteenth and Fifth Amendments (Count II); (3) a Section 1983 violation of the First Amendment right to seek judicial relief without retaliation (Count III); and (4) a Section 1983 violation of the Fifth Amendment right to just compensation (Count IV).*fn1 Defendant moves to dismiss Counts I and IV pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn2 Additionally, Defendant requests that the Court abstain from exercising its jurisdiction over Counts II and III. For the following reasons, the Court grants Defendant's motion to dismiss as to Count IV, and denies Defendant's motion as to Counts I, II and III.

BACKGROUND

I. The Parties

LaSalle Bank is the record titleholder of the property located in the City that is the subject of this dispute (the "Property"). (R. 1-1; Compl. at ¶ 3.) Robert R. Krilich ("Krilich") is the beneficial owner of the Property. (Id. at ¶ 4.) Donna J. Krilich is married to Krilich and holds a power of attorney, including the power of direction, over the land trusts that are the record titleholders of the Property. (Id. at ¶ 5.) The City is a municipal corporation located in DuPage County, Illinois. (Id. at ¶ 6.)

II. The Property

The Property consists of roughly 100 acres.*fn3 (Id. at ¶ 9.) In approximately 1966, the Property was part of DuPage County, zoned R-3 with a Special Use for multiple family development and approved for the development of approximately 2,000 multiple family dwelling units. (Id. at ¶ 15.) On or about June 23, 1972, pursuant to an agreement (the "Annexation Agreement"), Defendant annexed the Property. (Id. at ¶¶ 16, 17.) The Annexation Agreement, which was effective through June 29, 1986, allowed for the construction of 2,731 multi-family residential dwelling units. (Id. at ¶¶ 17, 18.) Defendant zoned the Property within the B-4 Service District with a Special Use for a Planned Unit Development. (Id. at ¶ 18.) On November 28, 1986 (after the expiration of the Annexation Agreement), Defendant entered into another agreement with Plaintiffs (the "1986 Agreement"), which recognized that Plaintiffs "were vested with the right to complete the development of the Property in accord with the provisions of the Annexation Agreement." (Id. at ¶ 20.)

According to Plaintiffs, "[t]his case centers on the actions taken by Defendant . . . with respect to the Property." (Id. at ¶ 7.) Plaintiffs allege that Defendant's actions "effected a regulatory taking of substantially all economic viability" of parcels of the Property that have not yet been fully developed, and "interfered with [Plaintiffs'] reasonable investment-backed expectations." (Id. at ¶ 12.) Defendant's actions that are at issue are described below.

III. Down-Zoning of the Property

Plaintiffs allege that Defendant "took steps to amend its Official Comprehensive Plan and down zone the Property" after learning that Plaintiffs intended to sell part of the Property. (Id. at ¶ 26.) On March 25, 2003, Defendant passed an ordinance amending its Official Comprehensive Plan and creating a new area designated the "Unit 5 Area." (Id. at ¶ 27.) The "Unit 5 Area" consists of approximately 236 acres of land and encompasses the Property. (Id.) Defendant also created a new zoning district called "M-U" or "Mixed Use Zoning District." (Id. at ¶ 28.) On January 13, 2004, Defendant re-zoned the Property from B-4 with a Special Use for a Planned Unit Development to "M-U." (Id. at ¶ 29.) As a result of the zoning change, the Property is now zoned for the construction of approximately 300 dwelling units, opposed to the over 2,700 units for which it was previously zoned. (Id. at ¶ 30.)

IV. Stormwater Exempt List

In 1991, DuPage County adopted a Stormwater Ordinance that imposes certain regulations. (Id. at ¶¶ 32, 33.) The Stormwater Ordinance allows municipalities to exempt certain properties from the regulations. (Id. at ¶ 33.) In 1992, Defendant adopted the Stormwater Ordinance and placed the Property on the Stormwater Exempt List. (Id. at ¶ 36.) In 2003, Defendant removed the Property from the Stormwater Exempt List. (Id. at ¶¶ 38, 39.) According to Plaintiffs, removal of the Property from the Stormwater Exempt List conflicts with the terms of the Annexation Agreement and the 1986 Agreement. (Id. at ¶¶ 41-43.)

V. Water Company Development

Plaintiffs allege that the Annexation Agreement authorized and directed them to construct and support water mains to serve the Property. (Id. at ΒΆ 44.) O.B.T. Service Corp., a water company Krilich formed and ...


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