Charles Koen & Associates v. City of Cairo, 89-3611
| Decision Date | 03 August 1990 |
| Docket Number | No. 89-3611,89-3611 |
| Parties | CHARLES KOEN & ASSOCIATES, Plaintiff-Appellant, v. CITY OF CAIRO and Allen Moss, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Samuel H. Liberman, St. Louis, Mo., Richard G. Younge, E. St. Louis, Ill., for plaintiff-appellant.
John G. Holland, Jr., John G. Holland, Cairo, Ill., for defendants-appellees.
Before COFFEY and RIPPLE, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.
Charles Koen & Associates (Koen) appeals from the district court's grant of summary judgment in favor of the defendants on Koen's claims under 42 U.S.C. Sec. 1983. The district court concluded that, as the result of prior proceedings in an Illinois state court, Koen's federal claims were barred by application of claim and issue preclusion under Illinois law. For the following reasons, we affirm.
In September 1985, Charles Koen's building, the Security Bank Building in Cairo, Illinois, was destroyed by fire. The building was still standing, but was burned and gutted. Some time thereafter, United States Fidelity and Guaranty Company (USFG), the insurer of the building, paid part of the loss, but withheld further payment after authorities concluded the fire was caused by arson. In November 1987, Koen sued USFG in Alexander County Circuit Court to recover the balance of his insurance claim. USFG responded by filing a motion for leave to deposit money with the state circuit court. This motion was, in effect, an attempt to deposit the amount of its settlement offer with the court pending a response to that offer from Koen.
On December 21, 1987, USFG filed a motion for court approval to pay demolition expenses. This motion was an attempt to comply with Illinois law, which requires an insured claimant or property owner to submit a certificate to the insurance company that directs it to pay the amount of unpaid delinquent property taxes and unpaid demolition expenses to the appropriate governmental unit. Although the City of Cairo had determined that its cost of demolition would be $62,810, Koen was seeking an alternate means of demolition and would not issue the required certificate to USFG.
On February 16, 1988, the state circuit court ruled on USFG's motions as follows: Koen would have until February 19, 1988 to submit a bid to the city for the demolition. If, by February 19, Koen had not submitted a bid, then the motion of USFG to pay $62,810 to the city would be granted and the city would, in good faith, accept a bid for the demolition not to exceed $62,810. The order further stated that, once On March 3, 1988, the state circuit court ordered USFG to deposit with the court $62,810 for the demolition. It further ordered that Koen's contractor, Hockett Demolition/Construction, be hired to effect demolition for $41,500 and that Hockett's fee be paid out of the $62,810 on deposit with the state circuit court. The balance of Hockett's fee left over from the $62,810 was to be held by the state circuit court along with the other funds deposited with the court by USFG pursuant to its settlement offer. Finally, the court ordered that, if Koen did not give Hockett a notice to proceed by March 20, 1988, or, if Hockett did not complete the demolition by June 18, 1988, the sum of $62,810 would be paid over to the city to accomplish the demolition. The March 3 order was based on an agreement between Koen and the city that Koen would have his building demolished by June 18, 1988, and that, if the building was not demolished by that date, Koen would allow the city to complete the demolition and to receive the demolition fund deposited in the state circuit court as compensation for the job. See Memorandum and Order, No. 89-4081 at 2-3 (S.D.Ill. Oct. 31, 1989) [hereinafter Mem. Order].
the city accepted a bid, it would be empowered to effect demolition of the building.
On July 6, 1988, the city moved to intervene as of right in the suit on grounds that, pursuant to both the agreement between the parties and the March 3 order of the state circuit court, demolition had not been accomplished by the June 18 deadline. Also, pursuant to the March 3 order, the city moved the state circuit court to disburse to the city the $62,810 in funds escrowed with the court for purposes of demolition. On July 29, 1988, the state circuit court, without objection, granted the city's motion and ordered that the $62,810 be paid over to the city for the purpose of demolition of the premises.
On August 29, 1988, the city filed a motion for authority to demolish the premises. Koen responded by filing a motion to stay and a motion to set aside the prior orders. On October 18, 1988, the court found that the agreement for demolition entered into between the parties should be enforced and granted the city the authority to demolish, but stayed the exercise of this authority for thirty days. The court also denied Koen's motion to set aside.
On October 25, 1988, the Cairo City Council authorized the taking of bids for the demolition work. Before any demolition bids were submitted, Koen began making plans to rehabilitate the building and acquired a temporary building permit that enabled him to construct a temporary roof over the building. On November 22, 1988, the Cairo City Council considered and rejected two bids to demolish the premises.
On December 6, 1988, in response to Koen's motion for another stay, the state circuit court made the following findings: (1) that the granting or denying of a building permit and the determination of whether a structure should be demolished (absent arbitrariness) was within the discretion and authority of the appropriate city officials; and (2) that the state circuit court's February 16, 1988 order based on the parties' agreement for demolition continued in full force and effect, but would be subject to a stay until the next council meeting. This stay presumably was granted to permit Koen a further opportunity to persuade the Cairo City Council to permit rehabilitation of the building.
On two different occasions, January 24, 1989 and February 14, 1989, motions were made in the Cairo City Council that the $62,810 in funds held by the city for demolition purposes be returned to the state circuit court. There are six members on the city council, plus the mayor. Pursuant to a consent decree entered in 1980 1 in the On March 15, 1989, Koen filed a second lawsuit in the state circuit court seeking a writ of mandamus to compel the city to return the demolition funds to the state circuit court. Koen supported his claim by contending that the council actually voted affirmatively on the motions to return the funds to the state circuit court, but that Mayor Moss improperly construed the "pass" votes as negative votes and thus improperly voted in violation of the 1980 consent decree. This suit eventually was consolidated with Koen's first suit in the state circuit court.
United States district court by Judge Foreman, the mayor of Cairo was not to vote unless there was a tie vote among the council members. The votes on both motions were three "yes," two "no," and one "pass." Mayor Allen Moss construed the "pass" as a "no" vote, and cast the "tiebreaking" "no" vote on both motions. On March 14, 1989, a motion was made to accept the lowest of the demolition bids that had been rejected at the November 22, 1988 council meeting. The vote on the motion was three "yes," two "no," and one "pass." Mayor Moss again construed the "pass" as a "no" vote and broke the "tie" by voting "yes."
Koen petitioned the state circuit court for a temporary restraining order (TRO) on March 23, 1989 to restrain the city from demolishing the building. He contended that the city was acting improperly by issuing a demolition order after it had issued a temporary building permit and after it had allowed Koen to invest $90,000 in rehabilitating the building. He further claimed that the demolition would be a violation of the Illinois Constitution, which prohibits the taking of private property for public use without just compensation. That same day, the state circuit court granted a TRO pending a hearing on Koen's petition for relief.
On March 27, 1989, after conducting a hearing pursuant to the TRO, the state circuit court concluded that Koen had not presented enough evidence to warrant an extension of the TRO. Thus, the court dissolved the TRO, 2 and the building was demolished on March 28, 1989.
After the demolition, on April 20, 1989, Koen filed an amended petition for mandamus in the state circuit court, in which he again sought to have the $62,810 in demolition funds held by the city returned to the state circuit court. He again alleged that the council votes on the motions to return the money were improper because of Mayor Moss' erroneous construction of the "pass" votes as "no" votes. He also asserted that the council's March 14 vote to accept a previously rejected demolition bid was illegal because the scope of the demolition work had changed since the bids originally were solicited.
On May 17, 1989, the state circuit court entered its findings of fact and order in both Koen's first and second lawsuits. The court began by noting that the city and Koen had entered into an agreement, reflected in the court's February 16 and March 3, 1988 orders, by which Koen agreed to have his building demolished and the city agreed to forego legal action regarding the demolition of the building. The court then noted that "[n]othing has changed the effect of these orders, nor the agreement of the parties." R. 15, Ex. O at 2. The court also explained that, prior to the demolition of the building, "plaintiff had made a cursory attempt to rehabilitate the structure, and the Court did in fact allow various stays in the original demolition order." Id. However, the court added, "[w]hen it was...
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