Derby Meadows Utility Co., Inc. v. Inter-Continental Real Estate

Decision Date17 August 1990
Docket NumberNos. 1-89-1612,INTER-CONTINENTAL,1-89-1613,1-89-2064,s. 1-89-1612
Citation202 Ill.App.3d 345,559 N.E.2d 986,147 Ill.Dec. 646
Parties, 147 Ill.Dec. 646 DERBY MEADOWS UTILITY CO., INC., Plaintiff-Appellant, v.REAL ESTATE, etc., et al., Defendants-Appellees. DERBY MEADOWS UTILITY CO., INC., Plaintiff-Appellant, v. VILLAGE OF ORLAND PARK, Defendant-Appellee (Camelot Homes, et al., Intervenors-Appellees). DERBY MEADOWS UTILITY CO., INC., Plaintiff-Appellant, v. VILLAGE OF ORLAND PARK, Defendant-Appellee (Camelot Homes, et al., Intervenors).
CourtUnited States Appellate Court of Illinois

Ross & Hardies, Chicago, Ill. (Jeffery M. Cross and P. Matthew Glavin, of counsel), for plaintiff-appellant.

Pope, Ballard, Shepard & Fowle, Ltd., Chicago, Ill. (Paul E. Freehling and Catherine P. Wassberg, of counsel), Jack M. Siegel, Chicago, Ill., for defendants-appellees.

Justice RAKOWSKI delivered the opinion of the court:

Derby Meadows Utility Co., Inc. (Derby Meadows) appeals from several orders of the circuit court of Cook County dismissing its claims against the Village of Orland Park (Village) for tortious interference with various real estate contracts as well as its claims against the respective real estate companies for specific performance. The issues on appeal are: (1) whether the trial court erred in granting summary judgment in favor of Camelot Homes, Inc. (Camelot Homes) based on the statute of frauds; (2) whether the dismissal of the tortious interference claim against the Village based on the finding that the Camelot Homes' contract was unenforceable was error; (3) whether the trial judge erred in dismissing Derby Meadows' complaint against Inter-Continental Real Estate and Development Corporation (Inter-Continental) and Orchard Hill Building Company (Orchard Hill) for failure to state a cause of action; and (4) whether the trial judge erred in granting summary judgment for the Village on the tortious interference claim regarding the Inter-Continental contract. We affirm in part and reverse and remand in part.

This consolidated appeal involves multiple parties and claims which were litigated before three judges. In order to clarify the issues, a description of the parties as well as the events leading to the various claims is presented below.

Derby Meadows is a privately owned public utility company which, until 1980, had only provided water and sanitary sewer service to Will County. In 1980 Derby Meadows expanded its service area into southwestern Cook County which approached the boundaries of the Village. Thereafter, Derby Meadows and the Village became competitors for the sale of water and sewer services to customers located near the Village.

As a public utility company, Derby Meadows is subject to regulation by the Illinois Commerce Commission and pursuant to section 8-406 of the Public Utilities Act (Ill.Rev.Stat.1985, ch. 111 2/3, par. 8-406(a)), it is required to obtain a Certificate of Public Convenience and Necessity in order to conduct business in the state. Anthony Perino is the president of Derby Meadows.

The Utility Service Contract For Creekside

Inter-Continental is a real estate and development corporation whose president is Michael Halikias. Creekside is a parcel of property located near the boundaries of the Village. Prior to October 1980 Creekside was owned by Tope Corporation. Anthony Perino, who is the owner of Derby Meadows, is also the owner of Tope Corporation. On October 30, 1980, Inter-Continental purchased Creekside from Tope Corporation. At the time that the sale of Creekside was executed, Inter-Continental also signed a document entitled "Agreement To Extend Sewer And Water Service Lines And Establishing Tap-In Charges." The agreement required Derby Meadows to construct water and sewer lines for service to the development, and it required Inter-Continental to pay a tap-in charge for connection to Derby Meadows' utility system either when Inter-Continental completed the on-site improvements or when Derby Meadows completed its trunk line, whichever occurred first. Derby Meadows completed its trunk line for the Creekside property in 1985. According to an affidavit filed by Perino, Derby Meadows requested payment of the sewer connection fee during the period between 1985 and 1987, and he was assured by Halikias that Inter-Continental would honor their agreement. However, in the fall of 1987 Halikias informed Perino that Inter-Continental would not honor their agreement and would not pay the connection fee.

Derby Meadows subsequently learned that Robert Gallagher and his company Orchard Hill were negotiating with Inter-Continental for the purchase of the Creekside property. At that time, Derby Meadows provided Orchard Hill with a copy of its utility service agreement with Inter-Continental and informed Gallagher that this agreement would be binding on his company if Orchard Hill purchased Creekside.

In December 1987 Inter-Continental signed an agreement with Orchard Hill for the sale of Creekside. On February 18, 1988, Derby Meadows filed a complaint against Inter-Continental for breach of contract and specific performance. Derby Meadows also filed a lis pendens notice on the Creekside property concerning its lawsuit against Inter-Continental. In March, 1988, a rider to the real estate contract, between Inter-Continental and Orchard Hill was executed which provided that the purchaser Orchard Hill rather than the seller Inter-Continental would be obligated for the payment of connection fees or sewer payments for the provision of water and sanitary sewer services provided by Derby Meadows.

The Utility Service Contract For Pinewood North

Camelot Homes is a real estate development company whose president is Robert Kaup. Camelot Homes owns a parcel of real estate in southwestern Cook County near the Village boundaries which is known as Pinewood North.

During 1986-1987 Kaup and Perino met and discussed the provision of water and sanitary sewer services by Derby Meadows for the proposed subdivision known as Pinewood North. The conversations between Kaup and Perino included a discussion of the terms under which Derby Meadows would provide the sewer and water service to the property, including the price, method of providing service, the time for service connections as well as joint efforts to obtain approval from the Illinois Commerce Commission. At the end of the meeting Perino asked Kaup if they had a deal, and Kaup replied, "We have a deal." Kaup then told Perino to "get going on it", and they shook hands. Perino then retained counsel to initiate a petition with the Illinois Commerce Commission to obtain a Certificate of Public Convenience and Necessity to provide service. The petition was to have included a written memorialization of the agreement between Kaup and Perino. At the March 20, 1987, hearing of the Cook County Zoning Board of Appeals, Camelot Homes' engineer stated that Derby Meadows would be providing the water and sewer service to the site, and at the Village Plan Commission meeting, Kaup and the engineer presented Pinewood North subdivision plans which showed water and sewer connections to Derby Meadows' facility. One of Kaup's attorneys also stated in a letter to the Village Planner that Camelot Homes had an understanding with Derby Meadows for the provision of water and sewer service. On August 20, 1987, Kaup told Derby Meadows' attorneys that Camelot Homes and Derby Meadows had a "handshake deal." However, despite its acknowledgement of the agreement, Camelot Homes refused to perform. On February 18, 1988, Derby Meadows filed a suit against Camelot Homes alleging breach of contract and seeking specific performance.

The Tortious Interference Action

The Village is a municipality in southwestern Cook County. In 1980 the Village obtained the right to purchase and resell Lake Michigan water. At this time the Village expanded its water lines and installed sanitary sewer lines in order to provide sewer service and Lake Michigan water to customers both within and outside the Village boundaries.

Pursuant to section 11-12-5 of the Illinois Municipal Code (Ill.Rev.Stat.1985, ch. 24, par. 11-12-5), the Village has the right to review and approve as well as give input into the character and design of plats of development on property located within one and one-half miles of its boundaries. The real estate developments involved in these proceedings are located within this one and one half mile area. Unlike Derby Meadows, the Village, as a municipality, is not required to obtain a Certificate of Public Convenience and Necessity to provide water and sewer service.

Because the Creekside property owned by Inter-Continental and the Pinewood North property owned by Camelot Homes were both located within one and one-half miles of the corporate boundaries of the Village, the Village's approval was required before the properties could be developed. The Village learned of Derby Meadows' agreements with Inter-Continental and Camelot Homes when each of the developers applied for subdivision approval. However, neither property was approved for development prior to the refusal of Inter-Continental and Camelot Homes to honor their agreement with Derby Meadows. On September 28, 1987, Derby Meadows filed a suit alleging that the Village tortiously interfered with Derby Meadows' contract with Inter-Continental and Camelot Homes.

Procedural History

Judge Roger Kiley presided over the trial of Derby Meadows' lawsuit against the Village and found that Derby Meadows had a valid enforceable contract with Inter-Continental and Camelot Homes, and that the Village had tortiously interfered with the contracts. However, before Judge Kiley issued a written order, Camelot Homes and Orchard Hill filed petitions to intervene, claiming that their rights would be affected if an injunction order was entered. The trial court granted both petitions and ordered Derby Meadows to consolidate its specific...

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