Board of Educ. School Dist. No. 67 v. Sikorski

• Decision Date: 31 May 1991
• Docket Number: No. 1-90-1353,1-90-1353
• Citation: 574 N.E.2d 736,214 Ill.App.3d 945
• Parties: , 158 Ill.Dec. 623, 68 Ed. Law Rep. 465 BOARD OF EDUCATION SCHOOL DISTRICT NUMBER 67, Plaintiff-Appellee, v. Margaret SIKORSKI, only in her capacity as a representative of all taxpayer residents of School District 67, Defendant-Appellee (Niles Township Trustees of Schools, Cook County, Defendant-Appellee, v. Bernard Katz & Co., Inc., Defendant-Appellant).
• Court: United States Appellate Court of Illinois

Page 736

574 N.E.2d 736

214 Ill.App.3d 945, 158 Ill.Dec. 623,

68 Ed. Law Rep. 465

BOARD OF EDUCATION SCHOOL DISTRICT NUMBER 67, Plaintiff-Appellee, v. Margaret SIKORSKI, only in her capacity as a representative of all taxpayer residents of School District 67 Defendant-Appellee (Niles Township Trustees of Schools, Cook County, Defendant-Appellee, v. Bernard Katz & Co., Inc. Defendant-Appellant).

No. 1-90-1353.

Appellate Court of Illinois First District, Fourth Division.

May 31, 1991.

Robert Marks, Marks, Marks and Kaplan, Ltd., Chicago, for defendant-appellant.

David Schachman, Michael K. Fridkin, Julia A. Fenton, of Sachnoff & Weaver, Ltd., Chicago, for plaintiff-appellee.

Justice McMORROW delivered the opinion of the court:

The instant appeal questions whether the Board of Education of School District No. 67 (the Board) violated certain provisions of the Open Meetings Act (Ill.Rev.Stat.1989, ch. 102, pars. 41 et seq.) and the School Code (Ill.Rev.Stat.1989, ch. 122, pars. 1-1 et seq.) in the public sale of certain Board property to defendant Bernard Katz & Co., Inc. (Katz), and whether these violations were grounds to render the sales contract between the Board and Katz unenforceable as void ab initio. We conclude that the Board's holding of an executive session to decide that the sale of school property should be postponed by three days violated the Open Meetings Act. (Ill.Rev.Stat.1989, ch. 102, par. 42(c).) However, we also determine that the Board cured and ratified its violation of the Open Meetings Act when the Board held subsequent public meetings regarding sale of the property. In addition, we find that the Board's failure to provide additional publication of the rescheduled date of sale did not violate the School Code. (Ill.Rev.Stat.1989, ch. 122, par. 5-22.) We also conclude that, assuming arguendo the Board had violated the School Code, the Board is nevertheless estopped from raising its violation as ground to render void its contract with Katz. We find the Board's argument regarding the Trustee's delegation to the Board of the authority to enter into a contract with Katz insufficient basis, on this record, to affirm the trial court's judgment. Accordingly, we reverse the trial court's ruling and remand the matter for further proceedings consistent herewith.

The following facts are undisputed in the record and derive from the parties' cross-motions for summary judgment. On September 21, 1989, the Board adopted a resolution directing the Niles Township Trustees of Schools to sell property comprising the Hynes Elementary School (hereinafter the Hynes School property) upon terms specified in the resolution and in a Trustee's Notice of Sale attached thereto. The Notice of Sale provided that sealed bids would be received on October 19, 1989, and that the Board, at its October 26, 1989 meeting, would accept one bid and execute a sales contract for not less than $2 million net. The Notice of Sale also required an earnest money deposit of 20% of the bid, and stated inter alia that the Hynes School property would revert to the Board if the property were not rezoned for multi-family residential use by the Village of Morton Grove.

The Board received several requests for information concerning the sale and on October 2, 1989, sent bid packages in response thereto. Defendant Katz was among those who requested and received a bid package. The Trustees' Notice of Sale was timely published as required by the School Code, i.e., publication was given in a local newspaper for three consecutive weeks regarding the terms, conditions, and date of public sale of the property. See Ill.Rev.Stat.1989, ch. 122, par. 5-22.

Three days before the anticipated public sale, on October 16, 1989, a neighbor to the Hynes School property filed suit to enjoin the sale, arguing that the sale should be postponed pending the election of new School Board members. (Robert L. Spatz, et al. v. Board of Education, et al., No. 89-CH-9249 (hereinafter Spatz).) On October 18, 1989, the trial court entered a temporary restraining order that precluded the Board from accepting bids on the scheduled date of public sale, which was set for the following day, i.e., October 19. The Board informed those who had requested bid packages, including defendant Katz, that the public sale would not be held on the set date because of the temporary restraining order. The Board also posted public notice that it would hold an executive meeting at 1 p.m. on October 20 to determine whether the date of public sale of the Hynes School property should be rescheduled to a particular date and time.

On the morning of October 20, 1989, the trial court dissolved the temporary restraining order in the Spatz case that had prohibited the Board's holding of a public sale of the Hynes School property. In the afternoon, the Board met in executive session to determine whether the public sale of the Hynes School property should be rescheduled. At the end of its executive session, the Board voted to receive bids at 1:00 p.m. on October 23, 1989. The Board also voted to accept a bid and execute a contract of sale on October 26, 1989, the date originally set in the published Notice of Sale. The Board posted public notice at its offices indicating that this vote had been reached at its executive session. The Board also notified persons who had requested bid packages, as well as those who had appeared for the original public sale on October 19, that the date of public sale had been rescheduled to October 23. The Board did not publish notices in local newspapers regarding the rescheduled date of the public sale.

On the date and time of the rescheduled public sale of the Hynes School property, defendant Katz appeared and submitted a bid for the minimum amount stated in the Notice of Sale, i.e., $2 million. No other person or entity appeared to submit a bid for the property. At a duly convened meeting on October 24, 1989, the Trustees adopted a resolution approving the Board "as designee for the purpose of the sale of the Hynes School." A day later, a neighbor of the school, Margaret Sikorski, filed a declaratory judgment action seeking to enjoin the sale on the ground that the Board had violated the Open Meetings Act and the School Code. (Sikorski v. Niles Township Trustees of Schools, et al., No. 89-CH-09605 (hereinafter Sikorski ).) This suit was consolidated with the earlier action, Spatz, which remained pending in the circuit court.

On October 26, 1989, i.e. the date designated in the original Notice of Sale, the Board accepted the Katz bid and signed the real estate contract with Katz for sale of the Hynes School property. Katz deposited with the Board the $400,000 earnest money required by the contract, and complied with the contract's requirement that Katz initiate proceedings to have the Hynes School property rezoned for multi-family residential use.

An election of new Board members was held in November 1989, and four new members were elected to the seven-person Board. The new Board, a majority of which apparently disfavored sale of the Hynes School property, filed suit against Katz for a declaratory judgment that the prior Board's actions with respect to the public sale of the Hynes School property violated the Open Meetings Act and the School Code. The Board's suit was consolidated with the Sikorski and Spatz litigation. Thereafter, the parties filed cross-motions for summary judgment with respect to the Board's declaratory judgment action.

The trial court determined that the Board violated the Open Meetings Act (Ill.Rev.Stat.1989, ch. 102, par. 42(c)) when the Board held an executive session, rather than a public session, to determine that the public sale date should be rescheduled to a particular date. The trial court also determined that the Board violated the School Code (Ill.Rev.Stat.1989, ch. 122, par. 5-22) when the Board failed to publish additional public notice in local newspapers to indicate that the public sale had been continued to a later date. On these bases, the trial court declared the contract between the Board and Katz void ab initio and unenforceable. Katz appeals from this ruling.

We consider first whether the record shows, as a matter of law (Ill.Rev.Stat.1989, ch. 110, par. 2-1005; Purtill v. Hess (1986), 111 Ill.2d 229, 95 Ill.Dec. 305, 489 N.E.2d 867 (standard for summary judgment)), that the Board violated the Open Meetings Act on October 20, 1989 when it held an executive session, rather than a public session, to choose a new date for public sale of the Hynes School property. We note that there is no dispute that the Board's meeting was an executive session, i.e., one closed to the public.

The parties' disagreement focuses on whether this closed session was governed by certain provisions of the Open Meetings Act. Specifically, the Board and Katz disagree with respect to whether the Board's executive meeting pertained to the selling price of the Hynes School property. The parties also dispute whether the executive session was held to discuss the impact of the Spatz litigation upon the intended sale of the Hynes School property.

The Open Meetings Act states in pertinent part that "[a]ll meetings of public bodies shall be public meetings except for * * * (c) meetings where the * * * selling price of real estate is being considered by the school board of a public school district, [or] * * * (h) meetings held to discuss litigation when an action against, affecting, or on behalf of the particular body has been filed and is pending in a court * * *." Ill.Rev.Stat.1989, ch. 102, pars. 42(c), (h).

We cannot say, as a matter of law, that the Board's October 20, 1989 executive session meeting came within the provisions of the Open Meetings Act that exempt sessions held to discuss either the sale price of real property or litigation pending against the Board. The minutes of the Board's meeting, the contents of which were the subject...