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Westmore Equities, LLC v. City of Mounds

United States District Court, S.D. Illinois

July 18, 2017

WESTMORE EQUITIES, LLC, Plaintiff,
v.
CITY OF MOUNDS, an Illinois Municipal Corporation, Defendant/Third-Party Plaintiff, WAYMON A. BUTLER, JR. and, ROBIN L. BARKSDALE, Defendants,
v.
DEVELOPMENT & MUNICIPAL INITIATIVES, LLC, KEITH J. MORAN, ERIC WHITE, and DEBORAH PROSSER-WHITE, Third-Party Defendants.

          MEMORANDUM AND ORDER

          J. PHIL GILBERT U.S. DISTRICT JUDGE

         This matter comes before the court on Plaintiff's Motion for Summary Judgment (Doc. 86), and Defendant City of Mounds' Motion for Summary Judgment (Doc. 88). For the following reasons, Plaintiff's Motion is GRANTED and Defendant's Motion is DENIED.

         I. Background.

         This controversy arises from what Westmore Equities (“Westmore”), a Missouri limited liability company in the business of developing real estate for Dollar General Corporation, contends is a breach of contract between itself and the City of Mounds, (“City”) an Illinois municipal corporation located in Pulaski County, Illinois. (Doc. 1).

         The contract in controversy called for Westmore to develop the property located on 764 S. Blanche, Mounds, Illinois (“Property”) into a Dollar General store. In return for developing the Property, the City agreed to reimburse Westmore from Tax Increment Finance[1] (“TIF”) funds, 75% of the annual TIF revenues, capped to a maximum $350 thousand, over the 23-year life of the TIF District, as prescribed by the TIF Act (“Act”)(Doc.1 ¶ 44). There were multiple resolutions passed by Mounds City Council[2] as it pertained to both creating the TIF district and inducing Westmore to build the Dollar General store. One such resolution, an “Inducement Resolution, ” specifically stated that it was understood that Westmore would be making expenditures and redeveloping land that would not be developed by Westmore, but for the use of TIF financing.

         Thereafter, on April 21, 2010, the City and Westmore entered into the Redevelopment Agreement (“Agreement”), which acknowledged that a good portion of Westmore's expenditures would be reimbursed through TIF funds, inter alia (Doc. 86, ¶ 1). However, the specific budget amount - as it pertains to Westmore developing the Property for Dollar General -was not presented for the City Council's approval. Instead, the mayor entered into an exclusive contract with Westmore based on the prior resolutions ratified by the City. Once that Agreement was executed, Westmore invested $900 thousand in developing the Property.

         The first payment request of $16, 769.63 was made by Westmore to the City in July 2013 and the City paid pursuant to the Agreement. It was not until the following year, on September 2, 2014, that the City, through its agent Municipal Consulting Group, Ltd., notified Westmore that the Agreement was void. The City informed Westmore that it was legally prohibited from paying Westmore from the Special Allocation Fund because the Agreement did not receive approval from the City Council. Following the notification from the City, Westmore filed this instant action. (Doc. 1).

         Westmore is asking the Court for declaratory judgment pursuant to 28 U.S.C. § 2201 that the Contract is valid and binding, or in the alternative to find that the theory of estopple applies in this matter. (Docs. 1 and 86).

         The City contends that as “non-home rule[3]” municipality, it possesses a limited grant of powers and that the Inducement Resolution did not authorize the execution of the contract at issue. (Doc. 88, ¶ 3). Further, the City contends that neither estoppel nor ratification apply in this case because “[a] contract which is prohibited by law cannot be later rendered valid by estoppel or ratification.” (Doc. 88, ¶ 10). The City asks the Court to deny the Plaintiff's Motion for Summary Judgment, [4] and find the Agreement between itself, and Westmore ultra vires, or more simply put, is beyond its authority as a “non-home rule” Illinois municipality, and therefore void.

         II. Standard.

         Summary judgment must be granted “if the movant shows that this is no genuine disputes to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477, U.S. 317, 322 (1986); Spath v. Hayes Wheels Int'l-Ind., Inc., 211 F.3d 392, 396 (7th Cir. 2000). The reviewing court must construe the evidence in the most favorable light to the nonmoving party and drawing all reasonable inferences in favor of that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Chelios v. Heavener, 520 F.3d 678, 685 (7th Cir. 2008); Spath, 211 F.3d at 396.

         The initial summary judgment burden of production is on the moving party to show the Court that there is no reason to have a trial. Celotex, 477 U.S. at 323; Modrowski v. Pigatto, 712 F.3d 1166, 1168 (7th Cir. 1992). Where the non-moving party carries the burden of proof at trial, the moving party may satisfy its burden of production in one of two ways. It may present evidence that affirmatively negates an essential element of the non-moving party's case, Fed.R.Civ.P. 56 (c)(1)(A), or it may point to an absence of evidence to support an essential element of the non-moving party's case without actually submitting any evidence, Fed.R.Civ.P. 56 (c)(1)(B); Celotex, 477 U.S. at 322-25; Modrowski, 712 F.3d at 1169. Where the moving party fails to meet its strict burden, a court cannot enter summary judgment for the moving party even if the opposing party fails to present relevant evidence in response to the motion. Cooper v. Lane, 969 F.2d 368, 371 (7th Cir. 1992).

         In responding to a summary judgment motion, the non-moving party may not simply rest upon the allegations contained in the pleadings but must present specific facts to show that a genuine issue of material facts exists. Celotex, 477 U.S. at 322-26; Anderson, 477 U.S. at 256-57; Modrowski, 712 F.3d at 1168. A genuine issue of material fact is not demonstrated by the mere existence of “some alleged factual dispute between the parties, ” Anderson, 477 U.S. at 247, or by “some metaphysical doubt as to the material facts, ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists only if “a fair minded jury could return a verdict for the [nonmoving party] on the evidence presented.” Anderson, 477 U.S. at 252. As the Seventh Circuit Court of Appeals has repeatedly stated, “summary judgment is the ‘put up or shut up' moment in the life of a case.” AA Sales & Assocs. v. Coni-Seal, Inc., 550 F.3d 605, 612 (7th Cir. 2008).

         There is no real dispute over the relevant facts in this matter. The parties agree that a contract was executed and the contract language speaks for itself. The parties disagree, however, whether as a matter of law the contract is void and unenforceable. The Court finds that it can decide these matters based on the filings alone.

         III. Discussion.

         Though other issues were presented, the primary issue before the Court is whether, absent approval from the City council, a binding and enforceable contract existed between the City and Westmore. In order to arrive to the answer to that question, the Court must first examine the City's power to enter into said contract and the procedures involved with those powers as it relates to TIFs. Second, the Court must resolve whether it was incumbent on the mayor of the City to receive approval from the City Council before executing the Agreement with Westmore.

         Pursuant to Illinois law, municipalities that are “non-home rule” units have limited powers. Vill. Of DePue, Ill. V. Exxon Mobil Corp., 537 F.3d 775, 787 (7th Cir. 2008); Hawthorne v. Vill. of Olympia Fields, 790 N.E.2d 832, 840 (Ill. 2003). There are six basic powers given to “non-home rule” municipalities by Article VII, section 7 of the Illinois Constitution of 1970. Those powers include:

(1) The power to make local improvements by special assessments; (2-4) the power, through referendum, to adopt, alter or repeal their forms of government and to provide for their officers, manner of selection and terms of office; and (5-6) the power to incur debt and to levy or impose ...

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