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Limestone Development Corp. v. Village of Lemont

January 25, 2007

LIMESTONE DEVELOPMENT CORP., PLAINTIFF,
v.
VILLAGE OF LEMONT, STEEL CHEMICALS, INC., JOHN PIAZZA, RICHARD A. KWASNESKI, STEVEN JONES, JOHN D. ANTONOPOULOS, ROBERT PORTER, AND DANIEL FIELDING, DEFENDANTS.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff Limestone Development Corporation ("Plaintiff" or "LDC") has brought suit against eight Defendants: Village of Lemont, an Illinois municipal corporation ("Village of Lemont"); K.A. Steel Chemicals, Inc., a Delaware Corporation doing business in Illinois ("K.A. Steel"); John Piazza, individually and in his official capacity as the current Mayor of the Village of Lemont ("Piazza"); Richard A. Kwasneski, individually and in his official capacity as the former Mayor of the Village of Lemont ("Kwasneski"); Steven Jones, individually and in his official capacity as Administrator of the Village of Lemont ("Jones"); John D. Antonopoulos, individually and in his official capacity as Attorney for the Village of Lemont ("Antonopoulos"); Robert Porter, individually and in his capacity as Administrator of the Lemont Park District ("Porter"); and Daniel Fielding, individually and in his official capacity as an employee of the Village of Lemont ("Fielding").

First, Plaintiff alleges that Defendants Piazza, Kwasneski, Jones, Antonopoulos, and Porter violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c) and (d) ("RICO"). Specifically, LDC alleges that Defendants Piazza, Kwasneski, Jones, Antonopoulos, and Porter entered into an agreement to conduct an enterprise through a pattern of racketeering activity in order to damage LDC's business and property, and to wrongfully acquire LDC's property by delaying or thwarting LDC's efforts to develop and/or market its property so that LDC would be forced by its lenders to sell the property at less than fair market value. Am. Cmplt. Count I at ¶¶ 1-78.*fn1 Second, Plaintiff alleges that all Defendants (except Porter) conspired to and did in fact deny LDC the equal protection of the laws guaranteed by the Fourteenth Amendment of the United States Constitution, 42 U.S.C. § 1983, by treating LDC differently from all other property owners in the Village of Lemont who owned property on public highways (the "Equal Protection Defendants"). Specifically, LDC alleges that the Defendants: (1) failed to maintain the public highway accessing LDC's property in a condition safe for vehicular traffic, and (2) permitted K.A. Steel to maintain a guardhouse/weigh station capable of blocking traffic on the public highway accessing LDC's property. Am. Cmplt. Count II at ¶¶ 1-30.

Third, Plaintiff alleges a pendant state law claim for Tortious Interference with Business Expectancy and Conspiracy to Interfere with Business Expectancy against K.A. Steel. Plaintiff originally brought this claim against all Defendants except Porter, but withdrew the claim against the Village of Lemont and all the Village employees as part of Plaintiff's Response to the Lemont Motion to Dismiss. Therefore, the state law tortious interference and conspiracy claim remains solely against K.A. Steel. Am. Cmplt. Count III at ¶¶ 1-26; Pltf. Resp. to Lemont at 9.

Plaintiff filed its original complaint with this Court on August 1, 2005, and subsequently filed an Amended Complaint on April 14, 2006. Defendants move to dismiss Plaintiff's Amended Complaint in its entirety pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendants Village of Lemont, Piazza, Kwasneski, Jones, and Antonopoulos, together with K.A. Steel, move to dismiss all claims as barred by their respective statutes of limitations. Alternatively, Defendants Village of Lemont, Piazza, Kwasneski, Jones, Antonopoulos, and Porter move to dismiss each allegation for failure to state a claim.

For reasons state below, Defendants' motion to dismiss the Amended Complaint is granted in its entirety.

Plaintiff's Allegations

In 1989, Plaintiff purchased two parcels of land, totaling approximately 55 acres, bordering the Illinois and Michigan Canal in Cook County, Illinois, near the Village of Lemont. The northern parcel was approximately 26.1 acres in size and bordered the canal to the north; the other parcel, to the south of the canal, was approximately 29 acres. Am. Cmplt., Count I at ¶ 9. LDC approached the Metropolitan Water Reclamation District ("MWRD") about developing the north parcel of LDC's property as a marina. Id. at ¶ 24. LDC required a lease for property that would permit the construction of a canal that would connect a lake on LDC's property (where the marina was to be located) to a Sanitary and Ship Canal. Id.

Allegations against the Village of Lemont and Village Employees

In 1992, LDC approached the Lemont Park District to form a joint venture that would ultimately allow LDC and the Lemont Park District to lease the necessary land from the MWRD at a significantly reduced yearly fee in order to implement LDC's marina development plans (the "Joint Venture").*fn2 Id. at ¶¶ 25--28. At that time, Defendant Porter was the Administrator of the Lemont Park District. Plaintiff alleges that the conspiracy against it by Defendants Porter, Antonopolous, Kwasneski, and Jones, (and later Piazza,) all employees of the Village of Lemont, began when Plaintiff approached the Lemont Park District about the Joint Venture. Id. at ¶¶ 10-12, 29.

In 1993, LDC became delinquent on its real estate taxes. Defendants Porter, Antonopolous, Kwasneski, and Jones conspired to acquire LDC's property by making a "no cash bid" on LDC's property for the delinquent taxes. Id. at ¶ 17. Defendants misrepresented to Cook County that LDC's property in question was not encumbered by pending litigation concerning easement access to the property. Id. at ¶ 18; see "Easement Access Litigation" below. LDC redeemed the taxes and prevented the acquisition. Id. at ¶¶ 19, 20, 22.

In 1995, Porter mailed to LDC a letter concerning the possible Joint Venture, in which he re-affirmed the Park District's interest in the proposed Joint Venture and indicated that LDC would pay the legal and development expenses of the proposed marina project. Id. at ¶ 35; Ex. B. But LDC alleges that the Lemont Park District in fact had no intention of participating in the Joint Venture with LDC, and that Porter intentionally feigned interest to delay and thwart LDC's development of its property. Id. at ¶¶ 30--34.

In 1999, the Village of Lemont prepared an inaccurate appraisal of LDC's property. Am. Cmplt. at ¶¶ 41, 42. The appraisal was: (i) prepared under an erroneous assumption of LDC's available uses of the access road to its property resulting from previous easement access litigation, (ii) did not take into account that LDC could improve the value of its property by removing certain limestone "tailings," and (iii) inaccurately included more "lake area" and less land area in the northern parcel of land. Id. at ¶ 42. Antonopolous, Jones, Kwasneski, and Porter knew that the appraisal was inaccurate in the foregoing respects. Id.

In 2000, Defendant Jones mailed an initial purchase offer based on the faulty appraisal to the land trustee holding legal title to LDC's property. When LDC declined the offer of sale, Jones mailed several requests for monies to be issued pursuant to a grant agreement with the Illinois Department of Commerce & Community Affairs. Id. at ¶¶ 52--58. With the inaccurate appraisal in hand and using the monies from the grant agreement, Defendants Antonopolous, Jones, and Kwasneski, initiated an eminent domain proceeding against LDC's northern parcel. Id. at ¶ 44. The eminent domain proceeding was a sham that Defendants had no intention to pursue; Defendants brought the proceeding only to encumber the property so that, in LDC's words, "Limestone would fail, its lenders would commence foreclosure, and either the Village of Lemont or the Lemont Park District could acquire the property for less than fair market value." Id. The eminent domain proceeding, filed in mid-2000, was voluntarily dismissed by the Village of Lemont in 2002. Id. at ¶ 59.

In 2001, Defendant Piazza, in his official capacity as the newly elected Mayor of the Village of Lemont, joined the conspiracy and helped continue the interference with LDC's business expectancy. Am. Cmplt. Count II at ¶ 20.

In early 2003, Defendant Piazza, the current Mayor of the Village of Lemont, with the agreement and assistance of Antonopolous, Porter, Kwasneski, and Jones, made false public representations that the Village of Lemont controlled or owned LDC's property by mailing some 5000 copies of the "Village News" to residents of Lemont showing LDC's property on a map and indicating that the Village of Lemont had taken certain actions to develop portions of the property. Am. Cmplt. Count I at ¶¶ 60, 64--68. The misrepresentations in the Village News led the public and potential purchasers of LDC's property to believe that the property was owned or controlled by the Village of Lemont and subsequently impaired LDC's attempts to market and sell its property. Id. at ¶ 69.

Also in 2003, Porter communicated via email with Edward Andrysiak, an agent of LDC, representing that a proper appraisal of LDC's property would be performed and serve as the basis of negotiations for a purchase of LDC's property by either the Lemont Park District or Lemont Township. Id. at ¶ 70. But again, Defendants in fact had no intention of performing a new and correct appraisal, and instead only intended that their misrepresentations would delay LDC's development and/or marketing of its property. Id. at ¶ 71.

Allegations Against K.A. Steel

In January 1999, the Village of Lemont annexed the northern parcel of LDC's property, which until that time had been located in a different municipality. Am. Cmplt., Count IIat ¶ 18. Beginning in November 1999 the Lemont Defendants omitted to perform necessary maintenance on the public road accessing LDC's property, although the Village performed such maintenance on all other public highways within its jurisdiction. Id. at ¶ 21. From some time "shortly after the conspiracy, combination, and agreement was entered into" until early 2004, the Village of Lemont allowed Defendant K.A. Steel to maintain a guardhouse/weigh station on the same public highway accessing Plaintiff's property, although it did not allow or permit any similar guardhouse/weigh station on a public highway within its jurisdiction. Id. at ¶ 22. K.A. Steel maintained its guardhouse/weigh station 24 hours a day, 7 days a week; however, Plaintiff does not allege any instances of denied access to its property during this time. Id. at ¶ 23. Defendants' actions were intentionally designed to interfere with and prevent LDC from effectively marketing its property for sale and from receiving full and fair market value. Id. at ¶¶ 27--30.

Near the end of 2003, LDC entered into a contract with Morgan Builders, Inc., to sell its property for below fair market value. Id. at ¶¶ 24, 30. After LDC signed the contract with Morgan Builders, Defendants became aware of the sale and only then began to repair and maintain the access road to LDC's (former) property. Id. at ¶¶ 24--25. Additionally, sometime after the signing of the contract between LDC and Morgan Builders, K.A. Steel removed its guardhouse/weigh station from the public highway. Id. at ¶ 26.

Previous Litigation

LDC & Village of Lemont Easement Access Litigation In 1992, LDC filed suit in the Circuit Court of Cook County against the Village of Lemont and K.A. Steel concerning use of an unimproved road that provided the only land access to LDC's northern parcel. One section of the road was owned by K.A. Steel, and another section crossed a 90-foot reserve strip of land owned by the Village of Lemont. Limestone Dev. Corp. v. Vill. of Lemont, 672 N.E.2d 763, 766 (Ill. App. Ct. 1996) ("Limestone I"). In 1990, LDC brought in heavy equipment to widen and clear the road for purposes of developing a marina. Id. The Village of Lemont notified LDC of their concerns regarding the safety of the road and told LDC they had no permission to use the road accessing the property. Id. K.A. Steel also prohibited LDC's use of the road. Id. However, LDC continued to use the road without the Village's permission or knowledge. Id. The Village of Lemont finally prohibited LDC from using the road by posting a stop work order and adding a locked gate that crossed the road. Id. LDC filed suit for declaratory, injunctive, and monetary relief against the Village for wrongful denial of access to LDC's property.

In late 1994, LDC filed an emergency petition for preliminary injunction. Id. at 767. A Cook County judge granted a preliminary injunction to LDC and found that LDC had a legal right to unfettered use of the access road by virtue of prescription, implied easement, and statutory and common law dedication. Id. at 767. On appeal from the preliminary injunction, the Illinois Appellate Court affirmed that LDC had made a sufficient showing for a preliminary injunction on grounds that the access road was a prescriptive easement, but reversed the lower court's determination that LDC should have unfettered access to the road to develop the marina because the prescriptive easement extended only to recreational use. Id. at 769. The Illinois Appellate Court also found an insufficient showing for preliminary injunction purposes that LDC had an implied easement or a statutory or common law dedication. Id. at 769-71.

In 1997, on remand, a Cook County judge found after full hearing that LDC had established an implied easement by necessity, but for non-commercial uses only. See Limestone Dev. Corp. v. Vill. of Lemont, No. 1-97-3711, *2--3 (Ill. App. Ct. 1998) ("Limestone II") (unpublished, attached as Def. Ex. 6). The trial court found that LDC could not establish on the merits a public highway by prescription or common law dedication. Id. On direct appeal, the Appellate Court held that LDC had established an implied easement by necessity, the scope of which included uses that were reasonably necessary for the full enjoyment of the property. Id. at *20--23. While the road could be used for "commercial activities," the Court held that LDC did not have an unqualified or unrestricted right to use the access road. Id. at *23-25. More specifically, LDC could not use the access road to pursue its commercial marina development as planned, because the planned marina development would unduly burden the Village of ...


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