Chicago Park Dist. v. Kenroy, Inc.

• Decision Date: 01 February 1980
• Docket Number: Nos. 50712,50713,s. 50712
• Citation: 78 Ill.2d 555,37 Ill.Dec. 291,402 N.E.2d 181
• Parties: , 37 Ill.Dec. 291 The CHICAGO PARK DISTRICT et al., Appellees, v. KENROY, INC., et al., Appellants.
• Court: Illinois Supreme Court

Page 181

402 N.E.2d 181

78 Ill.2d 555, 37 Ill.Dec. 291

The CHICAGO PARK DISTRICT et al., Appellees, v. KENROY, INC., et al., Appellants.

Nos. 50712, 50713.

Supreme Court of Illinois.

Feb. 1, 1980.

Rehearing Denied March 28, 1980.

Friedman & Koven, and Burke, Weber & Egan, Chicago (Paul Homer, Thomas T. Burke, and Lawrence M. Templer, Chicago, of counsel), for appellants Kenroy, Inc., Edgewater Co. and La Salle Nat. Bank.

William R. Quinlan, Corp. Counsel, Chicago (Daniel R. Pascale, Richard F. Friedman, and Robert R. Retke, Asst. Corp. Counsels, Chicago, of counsel), for appellants City of Chicago.

Sneider & Troy, Chicago (Richard J. Troy, Chicago, of counsel), for appellees.

UNDERWOOD, Justice:

Plaintiffs, the Chicago Park District (Park District) and the Public Building Commission of Chicago (PBC), filed a complaint seeking the imposition of a constructive trust to recover actual damages of $5 million and punitive damages of $10 million from defendants, Kenroy, Inc. (Kenroy), Edgewater Company, and La Salle National Bank (La Salle). Another complaint, seeking similar relief from the same defendants, was filed by the city of Chicago (City), which had been granted leave to intervene.

The circuit court of Cook County dismissed the complaint of the Park District and PBC on the ground that it represented a collateral attack on a final judgment in a related eminent domain proceeding. The City's complaint was also dismissed for failure to state a cause of action. The appellate court held no collateral attack occurred and reversed the dismissal of the complaint filed by the Park District and PBC, but affirmed the dismissal of the City's complaint on the ground that it was barred by the applicable statute of limitations. 58 Ill.App.3d 879, 15 Ill.Dec. 887, 374 N.E.2d 670.

The conduct alleged in the complaints is adequately set forth in the opinion of the appellate court and need only be summarized here as follows. In its efforts to acquire a parcel of property commonly known as Edgewater Golf Club, the Park District filed an eminent domain proceeding during which the PBC was substituted as petitioner. According to a plan ratified by the Chicago city council, the PBC would acquire the parcel for the construction of park and recreational facilities and the Park District would then lease the property from the PBC for 20 years. Pursuant to the Public Building Commission Act and the Chicago Park District Act, the Park District assumed the obligation to levy a tax in an amount sufficient to amortize the PBC's acquisition costs.

In response to a petition filed by defendants prior to institution of the eminent domain proceedings, the Chicago city council rezoned the property from R-4 residential use to "Planned Development No. 67." Valuations of the property as rezoned were offered by various appraisers, including Roy Gottlieb, an officer of defendant Kenroy and a general partner of the Edgewater Company. Pursuant to a settlement agreement among the parties to the eminent domain case, the circuit court entered an order requiring the PBC to pay La Salle $10.3 million as just compensation for the taking of the property.

It is further alleged that throughout the eminent domain proceeding and settlement negotiations, the defendants represented that the property had been properly rezoned. However, Roy Gottlieb and Kenneth Tucker, officers of Kenroy and members of the Edgewater partnership, subsequently testified that the rezoning had been secured by means of bribery and fraud. (United States v. Wigoda (N.D.Ill.1974), Docket No. 74 CR 291 (unreported decision), aff'd (7th Cir. 1975), 521 F.2d 1221, cert. denied (1976), 424 U.S. 949, 96 S.Ct. 1421, 47 L.Ed.2d 355.) Various municipal agencies and departments approved the zoning change, allegedly in reliance on representations made to them by defendants. As a city alderman and member of the Chicago Plan Commission, the city council and the council's Committee on Building and Zoning, Paul Wigoda voted to approve the defendants' application for a zoning change for which he allegedly received an envelope containing $50,000 in cash from Gottlieb and Tucker. Wigoda was subsequently convicted for failure to report this sum on his 1969 income tax return. (United States v. Wigoda (7th Cir. 1975), 521 F.2d 1221, 1225, cert. denied (1976), 424 U.S. 949, 96 S.Ct. 1421, 47 L.Ed.2d 355.) Because of defendants' participation in this alleged unlawful activity, plaintiffs prayed that defendants be declared constructive trustees of that portion of the condemnation award which equals the difference in the valuation of the property before and after the rezoning or $5 million, and that defendants be compelled to pay $10 million as punitive damages, plus costs. The City also seeks recovery for damages allegedly suffered in its defense of a suit brought by the defendants against the City's building commission to secure a building permit pursuant to the planned unit development ordinance. The defendants prevailed in that suit at both the trial and appellate levels (La Salle National Bank v. Fitzgerald (Cir. Ct. Cook County), Docket No. 69 L 16155, aff'd (1973), 15 Ill.App.3d 1016, 305 N.E.2d 355), and secured from the commissioner a stipulation to dismiss the appeal to this court and to permit the entry of an adverse judgment. (56 Ill.2d 587 (1974).) Alleging that the stipulation to dismiss constituted an abuse of process and was part of defendants' continuing fraud, the City has sought recovery for actual damages of $60,000 and punitive damages of $500,000, plus costs.

The issues in this consolidated appeal are whether the City's complaint is barred by the statute of limitations and, if not, whether its complaint states a cause of action and whether the complaint of the Park District and PBC constitutes a collateral attack upon the final judgment entered in the prior eminent domain proceeding.

In affirming the dismissal of the City's complaint, the appellate court found the action barred by section 15 of the Limitations Act, which provides in pertinent part that "all civil actions not otherwise provided for, shall be commenced within 5 years next after the cause of action accrued." (Ill.Rev.Stat.1975, ch. 83, par. 16.) Since this all-inclusive provision has been deemed applicable to actions for fraud and deceit (Keithley v. Mutual Life Insurance Co. (1916), 271 Ill. 584, 592, 111 N.E. 503; Bates v. Bates Machine Co. (1907), 230 Ill. 619, 621, 82 N.E. 911), to actions for tortious misrepresentations (Rozny v. Marnul (1969), 43 Ill.2d 54, 69, 250 N.E.2d 656), and to actions for enforcement of constructive trusts (Anderson v. Lybeck (1958), 15 Ill.2d 227, 234, 154 N.E.2d 259; Schreiner v. City of Chicago (1950), 406 Ill. 75, 91-92, 92 N.E.2d 133), the appellate court properly found this to be the appropriate statute of limitations. Since the City's complaint was not filed until April of 1975, more than 6 years after the alleged conduct forming the basis of its cause of action, the appellate court found the complaint to have been filed beyond the limitation period.

The appellate court also found that the limitation period had not been tolled by application of the "discovery rule" (see Auster v. Keck (1976), 63 Ill.2d 485, 349 N.E.2d 20; Tom Olesker's Exciting World of Fashion, Inc. v. Dun & Bradstreet, Inc. (1975), 61 Ill.2d 129, 334 N.E.2d 160; Lipsey v. Michael Reese Hospital (1970), 46 Ill.2d 32, 262 N.E.2d 450; Rozny v. Marnul (1969), 43 Ill.2d 54, 250 N.E.2d 656), or by section 22 of the Limitations Act, which provides:

"If a person liable to an action fraudulently conceals the cause of such action from the knowledge of the person entitled thereto, the action may be commenced at any time within five years after the person entitled to bring the same discovers that he has such cause of action, and not afterwards." (Ill.Rev.Stat.1975, ch. 83, par. 23.)

We believe that court erred in its construction of this section as it applies to the circumstances here alleged. As a general rule, the concealment of a cause of action sufficient to toll the statute of limitations requires affirmative acts or representations designed to prevent discovery of the cause of action. (Skrodzki v. Sherman State Bank (1932), 348 Ill. 403, 407, 181 N.E. 325); Lancaster v. Springer (1909), 239 Ill. 472, 482, 88 N.E. 272; Bush v. Continental Casualty Co. (1969), 116 Ill.App.2d 94, 100, 253 N.E.2d 619; Village of Dolton v. Harms (1945), 327 Ill.App. 107, 124-25, 63 N.E.2d 785.) Silence alone on the part of the defendant, accompanied by the failure of the plaintiff to discover the cause of action, ordinarily does not constitute fraudulent concealment. (Jackson v. Anderson (1934), 355 Ill. 550, 557, 189 N.E. 924; Harvey v. Harris Trust & Savings Bank (1979), 73 Ill.App.3d 280, 287, 29 Ill.Dec. 198, 391 N.E.2d 461; Nogle v. Nogle (1964), 53 Ill.App.2d 457, 464, 202 N.E.2d 683.) However, "(i)t is the prevailing rule that, as between persons sustaining a fiduciary or trust or other confidential relationship toward each other, the person occupying the relation of fiduciary or of confidence is under a duty to reveal the facts to the plaintiff (the other party), and that his silence when he ought to speak, or his failure to disclose what he ought to disclose, is as much a fraud at law as an actual affirmative false representation or act; and that mere silence on his part as to a cause of action, the facts giving rise to which it was his duty to disclose, amounts to a fraudulent concealment * * *." (Annot., 173 A.L.R. 576, 588 (1948); see Vigus v. O'Bannon (1886), 118 Ill. 334, 335, 8 N.E. 778; County of Cook v. Barrett (1975), 36 Ill.App.3d 623, 635, 344 N.E.2d 540; see also Emmett v. Eastern Dispensary & Casualty Hospital (D.C.Cir.1967), 130 U.S.App.D.C. 50, 56-57 n. 33, 396 F.2d 931, 937-38 n.33; Sheets v. Burman (5th Cir. 1963), 322 F.2d 277, 279-80; Rowen v. Le Mars Mutual Insurance Co. (Iowa 1979), 282 N.W.2d...