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Thorncreek Apartments III LLC v. Mick

United States Court of Appeals, Seventh Circuit

March 27, 2018

Thorncreek Apartments III, LLC, a foreign limited liability company d/b/a The Lofts at Thorncreek, Plaintiff-Appellee/ Cross-Appellant,
Tom Mick, Defendant-Appellant/ Cross-Appellee. and Thorncreek Management, LLC, Plaintiff-Appellee, VILLAGE OF PARK FOREST, Plaintiff-Appellant/ Cross-Appellee, and TOM MICK, Third-Party Defendant-Appellant/ Cross-Appellee, and MAE BRANDON, et al., Third-Party Defendants/ Cross-Appellees,
THORNCREEK APARTMENTS II, LLC, Defendant-Appellee/ Cross-Appellant, and ATLANTIC MANAGEMENT CORPORATION, Defendant-Appellee. THORNCREEK APARTMENTS I, LLC, Plaintiff-Appellee/ Cross-Appellant, and THORNCREEK MANAGEMENT, LLC, Plaintiff-Appellee, TOM MICK, individually and as Village Manager for the Village of Park Forest, Defendant-Appellant, and VILLAGE OF PARK FOREST, et al., Defendants/ Cross-Appellees.

          Argued May 18, 2017

          Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 08 C 1225, 08 C 0869, 08 C 4303 - Gary Feinerman, Judge.

          Before Bauer, Easterbrook, and Sykes, Circuit Judges.


         These consolidated appeals challenge various aspects of a judgment entered on a split jury verdict in a long-running dispute between the Village of Park Forest, Illinois, and Thorncreek Apartments, a large housing complex located in the Village. Thorncreek accused village officials of engaging in a campaign of regulatory harassment based on personal animus against its owner and because many of its residents are black. Thorncreek sued the Village and ten officials for compensatory and punitive damages under several federal and state civil-rights laws.

         After a 13-day trial, jurors returned a partial verdict for Thorncreek. The Village and its manager were found liable under 42 U.S.C. § 1983 for a class-of-one equal-protection violation, and the village manager and director of community development were found liable for conspiracy in violation of 42 U.S.C. § 1985(3). In all other respects, the jury sided with the defendants.

         Ruling on postverdict motions, the district court tossed out the jury's liability finding against the community-development director but otherwise approved the verdict and entered judgment accordingly. The judge also granted Thorncreek's motion for prejudgment interest and atorney's fees, though the award of fees was approximately one-third of what was requested.

         Both sides appealed, raising assorted challenges to the judge's postrial rulings on damages, prejudgment interest, and atorney's fees. We find no error and affirm.

         I. Background

         Thorncreek is a large townhouse complex nestled in the Village of Park Forest, a suburb southeast of Chicago that straddles both Cook County and Will County. In 1989 Thorncreek was sold to Atlantic Limited Partnership XX, a Michigan partnership largely owned by David Clapper, its general partner. Clapper later reorganized the property into three separate limited liability corporations: Thorncreek Apartments I, LLC; Thorncreek Apartments II, LLC; and Thorncreek Apartments III, LLC. Each corporation operated a different part of the complex: Thorncreek I ("Area F"), Thorncreek II ("Area G"), and Thorncreek III ("Area H"). We refer to the three corporations collectively as "Thorncreek" unless the context requires otherwise.

         In 2007 Atlantic Limited sold Thorncreek I for roughly $16 million. The leasing office for the entire complex was located in a townhouse in Area F, so the sale caused a logistical problem. Thorncreek's management company proposed to relocate the leasing office to a vacant townhouse in Area G, which was owned and operated by Thorncreek II. The move required a conditional use permit, so in February 2007 Thorncreek II applied to the Village for a permit to use the vacant townhouse as a business office. In the meantime, however, Thorncreek began to conduct its business operations from the Area G townhouse without waiting for action on the permit application. The Village responded by citing Thorncreek II for zoning violations and operating without the required permit.

         In December 2007 the Village filed suit in state court against Thorncreek II and Atlantic Limited to halt the zoning and operating violations arising from the unpermited leasing office and also to redress certain building-code violations. Thorncreek II removed the suit to federal court, but a district judge quickly sent it back to state court for lack of subject-mater jurisdiction. A later removal was successful; Thorncreek II counterclaimed against the Village and ten village officials raising a host of federal and state civil-rights violations. In February 2008 Thorncreek III filed its own federal lawsuit raising substantially similar claims.

         Two months later Fannie Mae filed foreclosure notices with the Cook County Recorder of Deeds against Thorncreek II and III. Thorncreek blamed its predicament on the Village's regulatory overreach. In July 2008 Thorncreek I joined the legal batle by filing its own federal suit alleging similar civil-rights violations.

         In essence, all three suits alleged that the Village violated Thorncreek's constitutional rights by denying its application for a business license, interfering with business operations, refusing to grant the application for a conditional use permit, failing to issue a certificate of occupancy, and unequally enforcing a building-code provision requiring electrical upgrades. A single district judge took charge of all three suits, consolidating them for summary judgment and, if necessary, a trial.

         As originally pleaded, the case was sprawling. Thorncreek brought claims under 42 U.S.C. §§ 1981, 1983, 1985, and 1986 seeking compensatory and punitive damages for alleged due-process, equal-protection, and Takings Clause violations; conspiracy; and failure to prevent a civil-rights conspiracy. Thorncreek also tacked on claims under the Illinois Civil Rights Act, 740 Ill. Comp. Stat. § 23/5.

         The judge trimmed the case a bit on summary judgment, but even as narrowed the case remained unwieldy. Three groups of claims were tried to a jury over 13 days: (1) § 1983 claims against the Village and nine officials for class-of-one and race-based equal-protection violations; (2) claims under §§ 1985 and 1986 against the same nine officials for conspiracy and failure to prevent a civil-rights conspiracy; and (3) claims against the Village under the Illinois Civil Rights Act. The basic theory of the case was that the defendants caused Thorncreek's mortgage default and foreclosure by singling it out for unfair regulatory action (and inaction) based on irrational animus against Clapper and racial bias against its black residents.

         Thorncreek prevailed in part. The jury found the Village and Village Manager Tom Mick liable for a class-of-one equal-protection violation. The jury also found Mick and Larrie Kerestes, the director of community development, liable for conspiracy in violation of § 1985(3). The jury cleared the other defendants on these two claims and exonerated all defendants on the remaining claims. On the issue of damages, the jury awarded $2, 014, 000 in compensatory damages to Thorncreek II but only $1 in nominal damages to Thorncreek I and III. Finally, the jury awarded punitive damages against Mick and Kerestes in the amounts of $5, 000 and $1, 000, respectively.

         Thorncreek moved for a new trial under Rule 59(a) of the Federal Rules of Civil Procedure but only on the issue of damages. The motion raised several claims of error. The judge rejected each one and denied relief. Thorncreek also asked for prejudgment interest on the jury's award of compensatory damages. The judge granted that request.

         Mick and Kerestes both moved for judgment as a mater of law under Rule 50(b). The jury's verdict against Kerestes was limited to the § 1985(3) conspiracy claim, but that statute requires a predicate race-based or class-based equal-protection violation. Because the jury cleared all of the defendants on the race-based equal-protection claim, the judge held that the verdict against Kerestes on the § 1985(3) claim could not stand.

         Mick's situation was different. His Rule 50(b) motion challenged only the jury's finding on the § 1985(3) conspiracy claim; he did not atack the jury's liability finding against him on the class-of-one equal-protection claim. So the judge saw no reason to disturb the verdict as to him and denied his motion. With these adjustments, the judge entered judgment on the verdict.

         Thorncreek later moved for an award of atorney's fees and nontaxable costs under 42 U.S.C. § 1988. The judge granted the motion and awarded $430, 999.25 in fees and $44, 844.33 in costs. The ...

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