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City of Chicago v. Old Colony Partners

March 16, 2006

THE CITY OF CHICAGO, PLAINTIFF-APPELLANT,
v.
OLD COLONY PARTNERS, L.P., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. No. 01 M1 400061 Honorable Ann Houser, Judge Presiding.

The opinion of the court was delivered by: Justice Murphy

Plaintiff City of Chicago (City) filed suit against defendant Old Colony Partners, L.P. (Old Colony).*fn1 In its original and amended complaints, the City alleged several violations of the Chicago Municipal Code (Code) by Old Colony. In particular, the City claimed Old Colony failed to keep the exterior walls of the 111-year-old landmark Old Colony Building located at 35-39 West Van Buren Street / 400-41 South Plymouth Court / 407 South Dearborn Street, Chicago, Illinois (Building), in sound condition and repair. The City sought daily fines for these alleged violations of the Code pursuant to section 13--12--040 of the Code. Chicago Municipal Code § 13--12--040 (amended November 10, 1994). The allegations remaining for the bench trial were that defendant had violated, and continued to violate, sections 13--196--037 and 13--196--530(b) and (e) of the Code. See Chicago Municipal Code § 13--196--037 (amended February 10, 1999), §§ 13--196--530(b), (e) (1990). On both issues, the trial court accepted and entered of record 1Old Colony's proposed findings of fact and conclusions of law and entered judgment in favor of defendant.

The City has framed this appeal solely around the issues with respect to application of sections 13--196--530(b) and (e) of the Code. The City contends that the trial court misinterpreted the Code, in particular, the elements of a violation of sections 13--196--530(b) and (e) of the Code. See Chicago Municipal Code §§ 13--196--530(b), (e) (1990). In addition, the City argues that notice is not required before the mandatory daily fines set forth in the Code are imposed and that abatement efforts in attempted compliance with the Code do not constitute an affirmative defense. The City argues that the trial court's findings of fact in favor of Old Colony were against the manifest weight of the evidence with respect to sections 13--196--530(b) and (e). As part of this argument, the City argues that the trial court improperly admitted and considered hearsay evidence presented by Old Colony. For the reasons that follow, we affirm the decision of the trial court.

I. BACKGROUND

The City filed a two-count complaint on January 2, 2001, alleging violations of the Code by Old Colony with respect to the exterior walls of the Building. Based on observations of the Building on July 10, 2000, the City sought monetary fines and injunctive relief against Old Colony. In particular, the City claimed Old Colony failed to keep the exterior walls of the Building in sound repair and file certain required maintenance and repair reports. The City claimed Old Colony faced daily accrual of fines for each day the violations of the Code existed.

Old Colony did not receive written notice of these alleged violations nor did it receive service of the City's complaint. Rather, Old Colony voluntarily entered an appearance in the case on February 9, 2001. Old Colony next filed its answer on June 1, 2001, asserting two affirmative defenses: failure to state a cause of action and substantial compliance. The City filed a motion to dismiss the affirmative defenses pursuant to section 2-615(a) of the Illinois Code of Civil Procedure. 735 ILCS 5/2-615(a) (West 2000). On October 22, 2001, the trial court granted the City's motion and gave the City leave to file an amended complaint.

On November 8, 2001, the City filed its amended complaint. The amended complaint contained six counts including the original alleged violations and additional alleged violations observed during an October 22, 2001 investigation of the Building. The City again sought injunctive relief and daily fines for the violations. As noted above, prior to trial, all but two claims were dismissed by agreement of the parties. The allegations remaining for trial were that defendant had violated, and continued to violate, sections 13--196--037 and 13--196--530(b) and (e) of the Chicago Municipal Code. See Chicago Municipal Code § 13-196-037 (amended February 10, 1999), §§ 13--196--530(b), (e) (1990).

The City alleged in Count I that, on July 10, 2000, unsafe conditions existed on all exterior walls of the building in violation of section 13--196--037 of the Code. Chicago Municipal Code § 13--196--037 (amended February 10, 1999). Specifically, the City claimed "vertical cracks were observed on all elevations; sheet metal was observed holding loose bricks over windows; large fractures were observed over north and west elevation bay windows; large limestone slabs were observed without mortar holding them in place, a dangerous and hazardous condition; and bay windows and sills appeared loose and partitions/upper sections appeared loose, with fractured parapet sections of terra cotta appearing loose and shifter, a dangerous and hazardous condition."

Count II was brought pursuant to section 13--12--040 of the Code. Chicago Municipal Code § 13--12--040 (amended November 10, 1994). The City sought the assessment of daily fines under that section, as of October 22, 2001, for unsafe conditions in violation of sections 13--196--037 and 13--196--530(b) and (e), that existed due to defendant's failure to repair exterior walls of the building. The City alleged this was evidenced by the presence of temporary shoring of terra-cotta window headers. The City sought injunctive relief and fines in the amount of $1.945 million under sections 13--196--038 and 13--12--040 of the Code for the alleged violations. Chicago Municipal Code § 13--196--038 (amended December 15, 2004), § 13--12--040 (amended November 10, 1994).

A. The Bench Trial

At the start of the bench trial on April 2, 2003, the City presented its only witness, City building inspector Julio Montilla. Montilla testified that he had been a building inspector for the City of Chicago for over six years. Montilla stated that he was the only inspector for the City on the Building and had inspected the Building on February 13, 2001, October 22, 2001, and March 27, 2003. Montilla's testimony centered around his descriptions and discussions of photographs taken of the Building on February 13, 2001, and October 22, 2001, which were entered into evidence as two group exhibits by the City. No pictures were taken during the 2003 inspection.

Montilla testified generally regarding the condition of the exterior walls of the Building and what was depicted in the photographs. Montilla regularly provided inconclusive descriptions of the location of each picture and did not offer specifics as to how the Code was violated by Old Colony. Repeatedly, Montilla stated that conditions such as missing terra-cotta or bricks or cracks in limestone were caused either naturally or were removed by human activity. Further, for each of these times, Montilla stated that resulting cracks were covered with plywood, caulk or roofing cement as temporary repairs.

On cross-examination, Montilla testified that he did not see any pieces of terra-cotta fall. Montilla was aware of scaffolding hung on the Building during the time in question and that structural engineers had been inspecting the Building for Old Colony. He noted that structural engineers are required to remove dangerous conditions and report them to the City. Montilla testified that he reviewed the critical examination report for the Building on file with the City. Further, Montilla stated that he did not receive any reports of dangerous or hazardous conditions at the Building.

Old Colony presented Marilyn Fornell, property manager for the Building since July 2001, as its sole witness. As part of her duties, Fornell reviewed the City's complaint and the work completed at the Building pursuant to contract. Several documents were presented and admitted, over the City's objections, as business records during Fornell's testimony. Included among these exhibits were the January 19, 2001 contract between Old Colony and architect and engineer firm Kellermeyer Godfryt Hart, P.C. (KGH) for completion of a critical examination report of the Building, the critical examination report dated April 16, 2001; contracts with KGH dated June 26, 2001, and December 26, 2001, for initial and final maintenance and repair of the Building to be completed by KGH and Reliable Building Systems, Inc. (Reliable); permits and permit applications for the proposed work and for canopies around the building; and a letter dated January 9, 2002, from KGH to Old Colony noting temporary maintenance was completed to assure short-term weather resistance and that no dangerous or hazardous conditions were found on the Building.

Fornell testified that, she worked closely with KGH and reviewed work on the Building as it was completed, personally inspecting the finished work. She testified that all reports and contracts were maintained on file, as required by City ordinance and as part of her typical business practice. Fornell testified to the work KGH and Reliable completed on the Building as detailed in the critical examination report and contracts for further work. Fornell did not testify as to how the KGH reports were completed. In sum, Fornell testified that intermediate maintenance was performed, the building would have to be cleaned, and special materials and permits would be required to complete maintenance in conformance with the building's landmark status.

Following receipt of the City's amended complaint, Fornell requested KGH and Reliable review the complaint. Fornell was assured the Building was watertight and did not pose a hazard or danger. Fornell further testified that she did not receive any complaints of, nor did she observe, wetness in the Building due to any of the alleged violations. Fornell's testimony and the exhibits were consistent with Montilla's testimony that portions of terra-cotta, bricks and limestone were removed and temporarily shored up and sealed.

As requested by the trial court, both parties submitted proposed findings of fact and conclusions of law. On July 29, 2003, without elaboration, the trial court accepted in full Old Colony's proposed findings of fact and conclusions of law. In extraneous statements, the trial court noted that it found the City's position troublesome in this case and welcomed guidance from this court regarding the issues of the case.

The City's Posttrial Motion

On September 30, 2003, the City filed a motion to reconsider filed pursuant to section 2-1203(a) of the Illinois Code of Civil Procedure. 735 ILCS 5/2-1203(a) (West 2004). The City argued that the trial court's findings were against the manifest weight of the evidence. The City claimed that as the evidence identified the Building as still in poor condition and the uncontroverted evidence presented by Montilla was to the same effect, the court should reverse its decision. The City again claimed the letters and reports entered into evidence by Old Colony were inadmissible hearsay and improper to consider.

Further, the City argued the trial court was incorrect in finding the City sought fines totaling $1.945 million. Rather, the City stated it was seeking $756,000 for the two claimed violations. The City further offered to limit fines sought to those alleged violations of section 13-196-530 of the Code for a total of $378,000. On January 23, 2004, the trial court granted the City's motion for reconsideration and denied its request to modify the final ...


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