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Hartz Construction Company, Inc., and v. the Village of Western Springs

February 8, 2012

HARTZ CONSTRUCTION COMPANY, INC., AND CHICAGO TITLE LAND AND TRUST COMPANY,
AS TRUSTEE UNDER TRUST NO. 17472 DATED JUNE 10, 2003,
PLAINTIFFS,
v.
THE VILLAGE OF WESTERN SPRINGS, A MUNICIPAL CORPORATION;
GURRIE C. RHOADS, INDIVIDUALLY;
COMMONWEALTH PROPERTIES COMPANY, LLC; AND
RHOADS DEVELOPMENT COMPANY, DEFENDANTS THE VILLAGE OF WESTERN SPRINGS, A MUNICIPAL CORPORATION, COUNTERPLAINTIFF AND COUNTERDEFENDANT-APPELLEE; GURRIE C. RHOADS, INDIVIDUALLY; COMMONWEALTH PROPERTIES COMPANY, LLC; AND RHOADS DEVELOPMENT COMPANY, COUNTERDEFENDANTS AND COUNTERPLAINTIFFS-APPELLANTS; HARTZ CONSTRUCTION COMPANY, INC., AND CHICAGO TITLE LAND AND TRUST COMPANY, AS TRUSTEE UNDER TRUST NO. 17472 DATED JUNE 10, 2003, COUNTERPLAINTIFFS AND COUNTERDEFENDANTS-APPELLEES).



Appeal from the Circuit Court of Cook County. 06 CH 0281 Honorable Mary K. Rochford, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Steele

PRESIDING JUSTICE STEELE delivered the judgment of the court, with opinion. Justices Neville and Murphy concurred in the judgment and opinion.

OPINION

¶ 1 This matter involves the recapture agreement entered into between the defendants, which comes before us for a second time on appeal. In Hartz Construction Co. v. Village of Western Springs, 391 Ill. App. 3d 75 (2009), we affirmed the trial court's summary judgment for defendant Village of Western Springs (Village) and rejected plaintiff Hartz Construction Company's*fn1 (Hartz) challenge of the recapture fee methodology under the agreement.

¶ 2 In the instant appeal, defendants Gurrie C. Rhoads, Commonwealth Properties, LLC, and Rhoads Development Company (collectively the Rhoads Defendants), appeal an order of the circuit court of Cook County granting summary judgment to the Village by virtue of granting the Village's motion to reconsider and denying the Rhoads Defendants' cross-motion to reconsider the trial court's prior summary judgment rulings on certain counts in the parties' amended counterclaims. On appeal, the Rhoads Defendants argue the trial court erred in finding: (1) the recapture agreement obligates them to indemnify the Village for attorney fees and costs incurred in this litigation where the Rhoads Defendants contend the Village breached an implied duty of cooperation; (2) the Village had authority under section 11-91-1 of the Illinois Municipal Code (Code) (65 ILCS 5/11-91-1 (West 2008)) to vacate certain real property under an ordinance, which would also allow Hartz to purchase the property for additional proposed construction in the Village; and (3) the Rhoads Defendants had to dedicate certain real property to the Village pursuant to an ordinance that approved the Rhoads Defendants' residential planned unit development (Commonwealth Development) in the Village and a subsequent resolution approving the dedication. For the following reasons, we affirm the circuit court's judgment in the Village's favor.

¶ 3 I. BACKGROUND

¶ 4 This court's prior opinion contains a recitation of general facts, which we incorporate in pertinent part herein:

"Rhoads, Rhoads Development Co., and Commonwealth Properties, Co., LLC (Rhoads) are the developers of the 'Commonwealth RPUD,' which is part of a residential planned unit development in the Village of Western Springs known as the 'Commonwealth Development.' [Hartz] owns three noncontiguous parcels known as the 'Waterford PUD,' which were intended to be developed in conjunction with the overall Commonwealth Development. [Hartz's] north and middle parcels are surrounded by Rhoads' properties and the south parcel forms the southern boundary of the Commonwealth Development. The Commonwealth Development is zoned 'R-4 Multi-Family Residence District.' The Waterford PUD is a proposed single-family townhouse development.

Pursuant to a Village ordinance [No. 92-1844] passed on August 10, 1992, Rhoads was required to make several improvements as a condition for approval to develop the Commonwealth Development. The improvements included constructing a sanitary sewer system, storm water sewer system, water distribution system, roadways, streets, the 53rd Street bridge, sidewalks, right-of-way landscaping, and street lighting. Rhoads also was required to build several water detention ponds. By 2000, Rhoads' development was 75% to 80% complete.

On October 28, 2002, *** Rhoads and the Village entered into a recapture agreement pursuant to section 9-5-1 of the [Municipal] Code. The stated purpose of the agreement was to reimburse Rhoads for the costs incurred in making improvements that benefitted properties other than [their] own. The preamble to the recapture agreement specifically noted Rhoads' public improvements benefitted [Hartz's] three noncontiguous parcels. [Hartz's] three parcels were the only 'benefitted properties' subject to the recapture agreement. Rhoads owned 88% of the property at issue in the recapture agreement, while [Hartz] owned 12%. The total cost of the public improvements included in the recapture agreement was $3,513,057. The agreement also provided that, if any term or provision was found illegal, the remaining terms and provisions continued to have full force and effect." Hartz, 391 Ill. App. 3d at 77-78.

In 1891, a plat of dedication shows the disputed property at issue, the 50th and 52nd Street rights-of-ways west of Flagg Creek and east of Commonwealth Avenue, was first dedicated to the Village. In 1973, the Village passed Ordinance number 1404, which vacated portions of Commonwealth Highway and certain intersected streets in the Forest Hills subdivision within the Village.

¶ 5 As early as 1991, the Rhoads Defendants engaged in discussions with the Village about the Commonwealth Development, a projected four-phase construction. The Rhoads Defendants and Hartz conducted negotiations about the development and the fee calculation methodology for the intended recapture agreement. After the developers' discussions were unsuccessful, the Rhoads Defendants and the Village subsequently entered into the recapture agreement in October 2002.

¶ 6 In Ordinance 04-2311, dated September 27, 2004, the Village amended section 3 of Ordinance 92-1844, which approved the construction of Commonwealth Development in the Village on property along Commonwealth Avenue in the Flagg Creek area. The area was rezoned for the four-phase construction project. The Rhoads Defendants would make infrastructure and other improvements to the area, including installing streetlights and sewer mains. In June 2004, the Rhoads Defendants sought reconfiguration of the area to include building 4 more townhome units, increasing the total number of approved units from 129 to 133. The design plans dated July 7, 2004, were approved by the Village. In accomplishing the reconfiguration and realignment of the area on Commonwealth Avenue south of 53rd Street, the Rhoads Defendants were to dedicate to the Village the public right-of-way Outlot A, which was described as "approximately 3,150.00 square feet in area and located north of and adjacent to 52nd Street and east of Commonwealth Avenue and the Hartz parcel." In a letter dated July 22, 2004, sent by the Rhoads Defendants to the Village, they agreed to dedicate the real property commonly referred to as Outlot A in consideration of the allowances for the construction.

¶ 7 Subsequently, the Village passed Ordinance 05-2358, dated October 24, 2005, in which it approved Hartz's request to develop 10 townhomes for a residential PUD located adjacent to Commonwealth Avenue south of the 50th Street right-of-way on Hartz's middle and south parcels. These two parcels are referred to in the record as Waterford PUD #2 and Waterford PUD #3, respectively. Additionally, the two parcels are bounded by Flagg Creek to the east and family residential properties east of Flagg Creek, and zoned R-4 multifamily residence district surrounded by the Commonwealth Development. Further, the ordinance noted Hartz planned to "hold off on preliminary and final approval" of its north parcel, which is referred to in the record as Waterford PUD #1. However, under the terms of the ordinance, approval of the permit was conditioned on Hartz paying the Village the agreed recapture fee to reimburse Rhoads. Moreover, the ordinance indicated the Village "agree[d] to take the necessary actions to sell Outlot D-3 *** to [Hartz] so that the land [could] be incorporated into the Waterford PUD #2 (Middle Parcel). After [a credit was] applied, [Hartz] agree[d] to pay $12,450.00 for title to Outlot D-3."

¶ 8 On January 5, 2006, Hartz brought the underlying suit seeking injunctive and declaratory relief against the Village and the Rhoads Defendants that the recapture of certain costs pursuant to the recapture agreement between the Rhoads Defendants and the Village for "benefitted properties," which included those owned by Hartz as stated in the approving ordinance, was invalid. As previously mentioned, this court rejected Hartz's challenge on appeal.

¶ 9 On February 27, 2006, the Village approved and accepted the plat of dedication of a public right-of-way of property referred to as "Outlot D-3 (also known as Outlot A)" in Resolution No. 06-1915. The resolution referred to the proposed dedication to the Village at no charge as the property "contemplated" in Ordinance 04-2311. The property was described as located north of 52nd Street and east of Commonwealth Avenue, as an extension of the 52nd Street public right-of-way in the Village.

¶ 10 On July 20, 2006, the Village filed an amended four-count counterclaim. Count I sought declaratory relief to find the Village had no obligation to reimburse the Rhoads Defendants for any uncollected recapture costs per a provision in the recapture agreement. In count II, the Village asserted that the "Rhoads [Defendants] must reimburse the Village for all attorney[ ] fees and costs incurred over the course of the litigation," including costs for asserting and defending counterclaims arising from the lawsuit. Count III requested declaratory judgment and injunctive relief, alleging the Rhoads Defendants had to transfer title of real property referred to as "Outlot A, now known as Outlet D-3"*fn2 to the Village pursuant to the ordinance that enabled the Rhoads Defendants to construct Commonwealth Development and a subsequent resolution that the Village passed. Lastly, count IV sought declaratory relief that the Village was entitled to $448,470 in recapture fees from Hartz pursuant to the recapture agreement. Counts I and IV of the Village's amended counterclaim are not at issue in this appeal.

¶ 11 Subsequently, the Village passed Ordinance 06-2406 on August 28, 2006, regarding Hartz's petition for approval to develop eight townhomes on its north parcel (referred to in the record as Waterford PUD #1) and Hartz's request that a portion of the 50th Street right-of-way be vacated, which the ordinance also described. Hartz submitted development plans and a subdivision plat for the proposed townhomes for the Village's consideration and approval. Further, the ordinance indicates the Commonwealth PUD Homeowner's Association supported Hartz's petition, particularly its request to relocate a detention basin from one area to another lot. Moreover, the ordinance notes the Village was amending Ordinance 92-1844 to allow the eight townhomes to be built on Outlot D-1.

¶ 12 On September 7, 2006, the trial court granted Hartz's petition to intervene as a coplaintiff in count III of the Village's amended counterclaim. On October 18, 2006, the Rhoads Defendants filed their amended answer and affirmative defenses to the Village's amended counterclaim, along with their amended three-count counterclaim seeking relief against the Village. For purposes of this appeal, the significant remaining count III concerned whether the Village had the authority to vacate the real property at issue pursuant to an ordinance that also allowed Hartz to purchase the property from the Village.*fn3 As an affirmative defense to count III of the Village's amended counterclaim, the Rhoads Defendants asserted the Village engaged in an ultra vires act by adopting Resolution No. 06-1915. The Rhoads Defendants also disputed a prior Village ordinance made the dedication of the ...


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