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Thorncreek Apartments III, LLC v. Village of Park Forest

United States District Court, N.D. Illinois

September 30, 2013

THORNCREEK APARTMENTS III, LLC, and THORNCREEK MANAGEMENT, LLC, Plaintiffs,
v.
VILLAGE OF PARK FOREST, an Illinois municipal corporation, TOM MICK, in his individual capacity and as Village Manager, MAE BRANDON, in her individual capacity and as Village Trustee, BONITA DILLARD, in her individual capacity and as Village Trustee, GARY KOPYCINSKI, in his individual capacity and as Village Trustee, KENNETH W. KRAMER, in his individual capacity and as Village Trustee, ROBERT McCRAY, in his individual capacity and as Village Trustee, GEORGIA O'NEILL, in her individual capacity and as Village Trustee, LAWRENCE KERESTES, in his individual capacity and as Village Director of Community Development, JOHN A. OSTENBURG, in his individual capacity and as Mayor of the Village of Park Forest, SHEILA McGANN, in her capacity as Village Clerk, and JOHN and JANE DOE, individual employees, offices, and/or agents of the Village of Park Forest, Defendants

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For Thorncreek Apartments III, LLC, a foreign limited liability company, doing business as The Lofts at Thorncreek, Thorncreek Management, LLC., a foreign limited liability company (1:08-cv-01225), Plaintiffs: Andrew W. Mychalowych, LEAD ATTORNEY, Siciliano Mychalowych & Van Dusen, PLC, Farmington Hills, MI; Dirk L. Van Beek, LEAD ATTORNEY, Dirk Van Beek Attorney At Law, Tinley Park, IL; Meghan Wright Cassidy, Siciliano Mychalowych VanDusen & Feul PLC, Farmington Hills, MI.

For Village of Park Forest, an Illinois municipal corporation, Thomas Mick, in his individual capacity and as Village Manager, Mae Brandon, in her individual capacity and as Village Trustee, Bonita Dillard, in her individual capacity and as Village Trustee, Gary Kopycinski, in his individual capacity and as Village Trustee, Kenneth W. Kramer, in his individual capacity and as Village Trustee, Robert McCray, in his individual capacity and as Village Trustee, Georgia O'Neill, in her individual capacity and as Village Trustee, Lawrence Kerestes, in his individual capacity and as Village Director of Community Development, John A Ostenburg, in his individual capacity and as mayor of the Village of Park Forest, Sheila McGann, in her capacity as Village clerk only (1:08-cv-01225), Defendants: Frank Bennett Garrett, III, Stephen Richard Miller, Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., Chicago, IL; Marshall Neal Smith, Jr., Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., Mokena, IL; Michael Russell Hartigan, Patrick Halpin O'Connor, Hartigan & O'Connor P.C., Chicago, IL.

For Village of Park Forest, an Illinois Municipal Corporation (1:08-cv-00869), Plaintiff: Marshall Neal Smith, Jr., Paul L. Stephanides, Susan W. Glover, LEAD ATTORNEYS, Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., Mokena, IL; Todd Kenneth Hayden, LEAD ATTORNEY, Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., Joliet, IL; Samuel Byron Cavnar, Robbins Schwartz Nicholas Lifton & Taylor, Ltd., Chicago, IL.

For Thorncreek Apartments II, LLC., a Foreign Limited Liability Company, doing business as The Lofts at Thorncreek, Atlantic Management Corporation, a Michigan Corporation (1:08-cv-00869), Defendants: Andrew W. Mychalowych, Lindsay Kennedy James, LEAD ATTORNEYS, Siciliano Mychalowych & Van Dusen, PLC, Farmington Hills, MI; Dirk L. Van Beek, LEAD ATTORNEY, Dirk Van Beek Attorney At Law, Tinley Park, IL; Meghan Wright Cassidy, LEAD ATTORNEY, Siciliano Mychalowych VanDusen & Feul PLC, Farmington Hills, MI.

For Tom Mick, Mae Brandon, Bonita Dillard, Gary Kopycinski, Kenneth W. Kramer, Robert McCray, Georgia O'Neill, Lawrence Kerestes, John A Ostenburg, Sheila McGann (1:08-cv-00869), Third Party Defendants: Michael Russell Hartigan, Patrick Halpin O'Connor, Hartigan & O'Connor P.C., Chicago, IL.

For Thorncreek Management, LLC. (1:08-cv-00869), Intervenor Plaintiff: Andrew W. Mychalowych, Lindsay Kennedy James, LEAD ATTORNEYS, Siciliano Mychalowych & Van Dusen, PLC, Farmington Hills, MI; Dirk L. Van Beek, LEAD ATTORNEY, Dirk Van Beek Attorney At Law, Tinley Park, IL; Meghan Wright Cassidy, LEAD ATTORNEY, Siciliano Mychalowych VanDusen & Feul PLC, Farmington Hills, MI.

For Atlantic Management Corporation, a Michigan Corporation (1:08-cv-00869), ThirdParty Plaintiff, Counter Claimant: Andrew W. Mychalowych, LEAD ATTORNEY, Siciliano Mychalowych & Van Dusen, PLC, Farmington Hills, MI; Dirk L. Van Beek, LEAD ATTORNEY, Dirk Van Beek Attorney At Law, Tinley Park, IL; Meghan Wright Cassidy, LEAD ATTORNEY, Siciliano Mychalowych VanDusen & Feul PLC, Farmington Hills, MI.

For Thorncreek Apartments II, LLC., a Foreign Limited Liability Company (1:08-cv-00869), ThirdParty Plaintiff, Counter Claimant: Andrew W. Mychalowych, LEAD ATTORNEY, Lindsay Kennedy James, Siciliano Mychalowych & Van Dusen, PLC, Farmington Hills, MI; Dirk L. Van Beek, LEAD ATTORNEY, Dirk Van Beek Attorney At Law, Tinley Park, IL; Meghan Wright Cassidy, LEAD ATTORNEY, Siciliano Mychalowych VanDusen & Feul PLC, Farmington Hills, MI.

For Village of Park Forest, an Illinois Municipal Corporation (1:08-cv-00869), Counter Defendant: Michael Russell Hartigan, Patrick Halpin O'Connor, Hartigan & O'Connor P.C., Chicago, IL.

For Thorncreek Apartments II, LLC. a Foreign Limited Liability Company (1:08-cv-00869), Counter Claimant, ThirdParty Plaintiff: Andrew W. Mychalowych, Lindsay Kennedy James, LEAD ATTORNEYS, Lindsay Kennedy James, Siciliano Mychalowych & Van Dusen, PLC, Farmington Hills, MI; Dirk L. Van Beek, LEAD ATTORNEY, Dirk Van Beek Attorney At Law, Tinley Park, IL; Meghan Wright Cassidy, LEAD ATTORNEY, Siciliano Mychalowych VanDusen & Feul PLC, Farmington Hills, MI.

For Village of Park Forest, an Illinois Municipal Corporation (1:08-cv-00869), Counter Defendant: Marshall Neal Smith, Jr., Paul L. Stephanides, Susan W. Glover, LEAD ATTORNEYS, Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., Mokena, IL; Todd Kenneth Hayden, LEAD ATTORNEY, Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., Joliet, IL; Michael Russell Hartigan, Patrick Halpin O'Connor, Hartigan & O'Connor P.C., Chicago, IL; Samuel Byron Cavnar, Robbins Schwartz Nicholas Lifton & Taylor, Ltd., Chicago, IL.

For Thorncreek Apartments I, LLC, a foreign limited liability company, doing business as Lofts at Thorncreek, The, Thorncreek Management, LLC, a foreign limited liability company (1:08-cv-04303), Plaintiffs: Andrew W. Mychalowych, LEAD ATTORNEY, Siciliano Mychalowych & Van Dusen, PLC, Farmington Hills, MI; Dirk L. Van Beek, LEAD ATTORNEY, Dirk Van Beek Attorney At Law, Tinley Park, IL; Meghan Wright Cassidy, LEAD ATTORNEY, Siciliano Mychalowych VanDusen & Feul PLC, Farmington Hills, MI.

For Village of Park Forest, an Illinois municipal corporation, Tom Mick, in his individual capacity and as Village Manager, Mae Brandon, in her individual capacity and as Village Trustee, Bonita Dillard, in her individual capacity and as Village Trustee, Gary Kopycinski, in his individual capacity and as Village Trustee, Kenneth W. Kramer, in his individual capacity and as Village Trustee, Robert McCray, in his individual capacity and as Village Trustee, Georgia O'Neill, in her individual capacity and as Village Trustee, Lawrence Kerestes, in his individual capacity and as Village Director of Community Development, John A Ostenburg, in his individual capacity and as mayor of the Village of Park Forest, Sheila McGann, in her capacity as Village clerk only (1:08-cv-04303), Defendants: Michael Russell Hartigan, Patrick Halpin O'Connor, Hartigan & O'Connor P.C., Chicago, IL.

OPINION

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Feinerman, United States District Judge.

Memorandum Opinion and Order

In December 2007, the Village of Park Forest, Illinois, brought suit against Thorncreek Apartments II, LLC, and its management agent, Atlantic Management Corporation, in the Circuit Court of Cook County, alleging zoning code and building code violations. After the case was removed to federal court, Doc. 1 (08 C 869), Thorncreek Management, LLC, filed an intervenor complaint, Doc. 69 (08 C 869), and Thorncreek II counterclaimed against the Village and filed third-party claims against Village officials, Doc. 102 (08 C 869). In February 2008, Thorncreek Apartments III, LLC, and Thorncreek Management filed suit in federal court against the Village and its officials. Doc. 1 (08 C 1225). And in July 2008, Thorncreek Apartments I, LLC, and Thorncreek Management filed a materially identical suit in federal court. Doc. 1 (08 C 4303). For ease of reference, and unless otherwise indicated, the Thorncreek entities and Atlantic will be referred to collectively as " Thorncreek," the Village parties will be referred to collectively as " the Village," Thorncreek's claims and counterclaims will be referred to simply as " claims," and all docket entries will be to Case 08 C 1255. A two-week jury trial has been set for April 7, 2014. Doc. 189.

Thorncreek's claims against the Village, which are brought under 42 U.S.C. § § 1981, 1983, 1985, and 1986, and Illinois law, arise from the Village's denial of Thorncreek's requests for licenses to operate a multifamily dwelling, denial of " certificates of occupancy" required to house new tenants, promulgation and allegedly discriminatory enforcement of an electricity ordinance, and denial of a conditional use permit for Thorncreek's leasing office. Put simply, Thorncreek alleges that the Village targeted it because the vast majority of its tenants were African-American. Now before the court are the Village's motion for summary judgment, Doc. 142, and Thorncreek's motion for partial summary judgment as to liability, Doc. 140. By agreement of the parties, the summary judgment proceedings in all three cases (08 C 869, 08 C 1225, and 08 C 4303) have been consolidated for decision in 08 C 1225 before the undersigned judge. For the following reasons, Thorncreek's motion is denied, and the Village's motion is granted in part and denied in part.

Background

" With cross summary judgment motions, [the court] construe[s] all facts and inferences therefrom in favor of the party against whom the motion under consideration is made." In re United Air Lines, Inc., 453 F.3d 463, 468 (7th Cir. 2006) (internal quotation marks omitted). Because Thorncreek's motion will be denied summarily and only the Village's motion will be considered on the merits, the following sets forth the material facts as favorably to Thorncreek as the record and Local Rule 56.1 permit. See Hanners v. Trent, 674 F.3d 683, 691 (7th Cir. 2012); Mays v. BNSF Ry. Co., 2013 WL 4804839, at *1 (N.D. Ill. Sept. 9, 2013). That the court at this juncture must assume the truth of those facts should not be taken as an endorsement thereof. See Smith v. Bray, 681 F.3d 888, 892 (7th Cir. 2012).

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A. The Parties

The Village is a municipality in Illinois. Lawrence Kerestes has been the Village Building Commissioner since 1984 and Director of Community Development since 2004. Tom Mick has been the Village Manager since January 2005. Mae Brandon, Bonita Dillard, Gary Kopycinski, Kenneth W. Kramer, Robert McCray, and Georgia O'Neill are Village Trustees. John A. Ostenburg has been the Village President since 1999. Sheila McGann is the Village Clerk. Thorncreek is a limited liability company that at all relevant times owned and operated a complex of rental townhomes in Park Forest; the complex includes 632 units and is divided into sectors commonly known as Areas F, G, and H. David Clapper is a principal of Thorncreek, and Pat Clapper works for Thorncreek.

B. The Village Code

Thorncreek has from time to time applied under the Village Code for licenses to operate multifamily dwellings in the Village. Section 22-468(a) of the Code states that the " applicant shall be required to demonstrate the applicant's qualifications ... either by previous or other experiences or by submitting a plan of management and operation to be approved by the village building commissioner." Doc. 157-5 at 76. Section 22-468(b) states that the Village Manager shall review each application and that where the " application [is] for a renewal of a license," the renewal shall be issued if " the applicant is deemed to have made a good faith effort to comply with" the Code. Ibid. Section 22-469 states that " renewal [of such licenses] is required on an annual basis." Ibid. Section 22-472 provides that multifamily dwelling license applications must " set forth the race, sex, marital status, age or national origin of the occupants of the rental units." Id. at 77. Mick, the Village Manager, typically would delegate the review of such applications to other departments. Doc. 150-5 at 44.

Section 18-255 of the Code provides that a dwelling unit may not be occupied until the Building Commissioner issues a certificate of occupancy for the unit. Doc. 149-1 at 31. The Commissioner issues certificates of occupancy after the Commissioner or a designee inspects dwellings to ensure that there are no Code violations. Ibid. A temporary certificate may be issued if the inspection reveals violations, provided that the unit's owner takes steps to ensure abatement of the violations. Id. at 32.

C. Events in 2005

The Village began to focus on Thorncreek in 2005, when 90-95% of Thorncreek's residents were African-American. The Village disliked the predominantly African-American makeup of Thorncreek and wanted to reduce the number of African-American residents. According to testimony from Kerestes, the Building Commissioner, the Village was concerned that Thorncreek's racial makeup was " highly skewed," believed that there were " too many blacks living in Thorncreek Apartments as opposed to the rest of the community," and preferred that there be " fewer black people" at Thorncreek. Doc. 150-7 at 39-40.

On September 16, 2005, Mick emailed the Trustees about a meeting with Thorncreek representatives at which he had conveyed his " feelings about the ... quality of [Thorncreek's] tenants" and asserted that the " tenants [are] draining our community's businesses, schools and local government services." Doc. 157-1 at 16-17. Three months earlier, Mick had emailed the Trustees and Ostenburg, the Village President, to say that a recent court ruling " might [be] another tool in our arsenal if we can't convince [David] Clapper nicely to

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part with his property." Id. at 14. On September 30, 2005, Mick's assistant wrote a memorandum to Mick stating in relevant part: " Staff met with management ... from Thorn Creek Townhouses to offer suggestions ... that will enable them to attract a more diverse resident base." Id. at 31. On October 4, 2005, Mick reported to the Trustees that Thorncreek was taking steps to " diversify [its] tenant base" by arranging to advertise in a Hispanic-edition magazine. Doc. 151-10 at 2.

The Village routinely cited minor or manufactured infractions during unit inspections at Thorncreek as grounds for not issuing certificates of occupancy. Inspectors scratched varnish and claimed there was flaking, pulled a toilet from the wall, cited units as having inoperable furnaces without conducting testing, and kicked bricks to crumble mortar. The Village's Chief Building Inspector denied certificates of occupancy on the ground that certain trees on the property were diseased or dead.

Thorncreek submitted its license renewal application for 2005 without providing demographic information about its tenants. On March 24, 2005, Kerestes wrote to Pat Clapper expressing " serious concern" about Thorncreek operating without a business license, stating that Thorncreek's application was missing " the required Fair Housing" form and was thus incomplete, and warning that additional inspections of ready units would be contingent upon inspectors not finding any housing code violations. Doc. 157-1 at 8. Thorncreek protested that providing demographic information would violate state and federal anti-discrimination laws, but stated that it had " neither the funds nor the time to contest the ordinance," agreed to collect and provide such information, and asked that it be allowed to do so as to new residents rather than existing ones. Id. at 9-10. On March 31, 2005, the Village agreed to allow Thorncreek to provide the information on a rolling basis. Id. at 11.

On November 8, 2005, Mick emailed the Trustees and Ostenburg to report that Thorncreek had requested more inspections per week. Mick stated that he told Thorncreek that he " would like them to start leveraging other properties in their portfolio to do millions of dollars in property upgrades" and that " Village staff would be glad to bring interested developers ... that would be willing to buy tracks of property." Doc. 157-1 at 38. On December 16, 2005, Mick reported to the Trustees that Thorncreek was " losing revenue with no occupancy" due to a high vacancy rate and that he had told Thorncreek that he wanted multimillion dollar property upgrades and was willing to consider providing more inspections if Thorncreek paid for them. Id. at 45. In the meantime, Thorncreek applied to Lehman Brothers Bank for a refinancing loan for Area F.

On December 6, 2005, Keretes advised the Trustees to pass an ordinance that would require operators of multifamily dwellings to upgrade a unit's electrical service to a minimum of 100 amperes upon a change of occupancy. Doc. 150-8 at 27-28. Kerestes told the Trustees that the ordinance was necessary to address technical and safety concerns. Ibid. ; Doc. 150-7 at 33-34. On December 12, 2005, the Trustees enacted Ordinance No. 1835, which implemented Kerestes's recommendation. The ordinance did not affect Areas F and H, whose units all had at least 100-ampere electrical service. The units in Area G, by contrast, had 60-ampere service. In a March 2006 letter to Mick, Pat Clapper ...


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