Harris Trust & Sav. Bank v. Duggan

• Decision Date: 25 March 1983
• Citation: 70 Ill.Dec. 195,449 N.E.2d 69,95 Ill.2d 516
• Parties: , 70 Ill.Dec. 195 HARRIS TRUST & SAVINGS BANK, Trustee, Appellee, v. William L. DUGGAN et al., Appellees (322 West Oakdale, Inc., et al., Appellants). 56607 56976
• Court: Illinois Supreme Court

Page 69

449 N.E.2d 69

95 Ill.2d 516, 70 Ill.Dec. 195

HARRIS TRUST & SAVINGS BANK, Trustee, Appellee, v. William L. DUGGAN et al., Appellees (322 West Oakdale, Inc., et al., Appellants).

56607

56976

Supreme Court of Illinois.

March 25, 1983.

Rehearing Denied May 27, 1983.

The facts, largely adopted from the appellate court opinion, are not controverted. The subject property includes three contiguous parcels of real estate, each improved with a single-family residence. Upon the death of Helen Kellogg in 1978, the properties became assets of a charitable foundation, created to liquidate and distribute the Kellogg estate assets to various charities. In November of 1978, Harris executed a contract to sell the property for $2.6 million. The contract was subject to the purchaser's right to develop the property in accordance with R-8 (high rise) zoning. The property was zoned R-8 at the time the contract was executed, and had been so zoned for approximately 18 years.

In February of 1979, Harris applied to the city for demolition permits to raze the mansions. The permits were granted on March 6, 1979, but were revoked the following day. In the letter of revocation, the city indicated that the property was located in an area under consideration for landmark designation. No landmark proceeding was pending at that time.

In April of 1979, Harris filed a two-count complaint seeking a writ of mandamus compelling reissuance of the demolition permits. While this action was pending, the city enacted an ordinance "down-zoning" the property from R-8 to R-5 (medium rise). In October 1979, Harris filed suit seeking a declaratory judgment that the amendatory zoning ordinance was unconstitutional and void. Oakdale sought, and was granted, leave to intervene in this action as a party defendant. In June of 1980, the trial court entered judgment in the zoning case, determining that the amendatory ordinance was unconstitutional. The court held that the property could be used in any manner consistent with R-8 zoning.

The following October, the court entered judgment for Harris in the mandamus case, ordering the city to reissue the demolition permits. The court also awarded Harris in excess of $1 million for the city's wrongful failure to issue the permits. However, the court stayed execution of its judgment pending a determination as to whether the property would be designated a landmark. The writ was later stayed again pending appeal.

On February 11, 1981, the city council enacted an ordinance designating the subject properties as Chicago landmarks. The following month, Harris notified the Commission on Chicago Historical and Architectural Landmarks (Commission) that it planned to demolish the buildings and the city should either allow the demolition or acquire the property through eminent domain. Harris also waived its right to any administrative hearing and requested the Commission to follow the applicable administrative procedures set forth in section 21-64.1 of [95 Ill.2d 522] the Municipal Code of Chicago. The city rejected Harris' demands and denied an obligation to pay any compensation for the alleged "taking."

In May of 1981, Harris added count III to its mandamus complaint. This count alleged that the city's actions regarding the subject property deprived Harris of all reasonable use of the property for two years, and that the property was taken without due process or just compensation. The case proceeded to trial on the theory of inverse condemnation. Harris later amended its prayer for relief under count III, requesting a declaratory judgment that the ordinance designating the property as a landmark was unconstitutional and void.

On September 2, 1981, the court entered judgment for Harris on count III. It determined that the landmark ordinance, together with the city's refusal to issue the permits, deprived Harris of all reasonable use of the property and constituted a taking requiring payment of just compensation. The court found that $3.65 million would be just compensation, but did not enter the money judgment because the city was unwilling to acquire the property and compensate Harris therefor. Instead, the court entered a declaratory judgment declaring the landmark ordinance unconstitutional and void. The court also awarded Harris $1,037,849.76 under section 5 of "An Act to revise the law in relation to mandamus" (Ill.Rev.Stat.1979, ch. 87, par. 5), for the As related earlier, following judgment in this final action, the city and Harris executed a settlement agreement. The city agreed to issue the demolition permits and forgo its right to appeal, and Harris agreed to abandon the money judgment. In September of 1981, shortly after learning of the agreement, Oakdale, Oberman, and Braun sought post-judgment intervention in the mandamus and landmark cases. The petition was denied, and they subsequently filed a separate lawsuit challenging the validity of the settlement agreement. Summary judgment was entered in Harris' favor, and the appellate court dismissed the appeal.

[70 Ill.Dec. 198] city's wrongful failure to issue the permits. (As previously noted, this judgment had been rendered in October of 1980, but was stayed pending a determination as to whether the property would receive landmark designation.)

Further facts will be recited where relevant to a disposition of the issues.

I. MANDAMUS AND LANDMARK CASES (Cause No. 56607)

Oakdale, a not-for-profit corporation with approximately 53 members, Martin Oberman, who was alderman of the ward in which the Kellogg mansions are located, and Hedwig Braun allege standing to intervene, post judgment, in the mandamus and landmark cases. We agree with the appellate court that the petitioners have not alleged a sufficient interest or injury so as to establish their standing to intervene. It should be kept in mind that intervention was sought after judgments were entered in the mandamus and landmark cases, and also after the settlement agreement had been completed.

Oakdale asserts that it is located 18 feet from the subject property and will be adversely affected by a razing of the mansions located thereon. The relevant portion of Oakdale's amended petition to intervene states:

"14. Oakdale will also be substantially damaged in that issuance of a demolition permit and the consequent demolition of the Kellogg mansions will adversely affect the character of their neighborhood, remove an appealing and aesthetically attractive group of landmark structures, result in the construction of a new and much larger residential building which will increase traffic, congestion, and crowding in the neighborhood and substantially reduce property values in the area, including, most particularly, the value of the apartment house property owned by Oakdale and the approximately 53 individual apartment owners who are members of Oakdale, reside in the Oakdale building, and are represented in this petition by Oakdale."

A fair reading of this paragraph indicates that Oakdale is alleging a reduction in property value, and other "injuries," as a result of the potential construction of a highrise building. As noted by the appellate court, Harris was not seeking, in the mandamus and landmark cases, the right to construct a building. This relief was at issue in the zoning case, in which Oakdale was permitted to intervene. Oakdale fails to allege that demolition of the mansions will in itself decrease the value of its property.

We recognize that, as Oakdale points out, pleadings should be liberally construed. (Pelham v. Griesheimer (1982), 92 Ill.2d 13, 64 Ill.Dec. 544, 440 N.E.2d 96; see Ill.Rev.Stat.1979, ch. 110, par. 33(3)). However, it is well established that absent the necessary allegations of interest in the controversy, and injury as a result of the challenged action, the petitioner lacks standing to require a decision on the merits. Cf. Underground Contractors Association v. City of Chicago (1977), 66 Ill.2d 371, 5 Ill.Dec. 827, 362 N.E.2d 298 (wherein an association lacked standing to seek a declaratory judgment because it failed to allege an injury or threat of injury); Walker v. State Board of Elections (1976), 65 Ill.2d 543, 3 Ill.Dec. 703, 359 N.E.2d 113 (a party challenging the validity of a statute must be in immediate danger of sustaining a direct injury); see also Warth v. Seldin (1975), 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343.

It is further alleged by Oakdale, in apparent reference to the mandamus case, "that Oberman also seeks intervention on the ground that he was deprived of certain rights and duties arising out of his status as alderman in the ward in which the Kellogg property is located. We note initially that aldermanic status alone is insufficient to confer a right to intervention. (University Square, Ltd. v. City of Chicago (1979), 73 Ill.App.3d 872, 29 Ill.Dec. 579, 392 N.E.2d 136.) However, Oberman contends that, as a member of both the finance committee and the city council, he was deprived of his right under sections 21-62 through 21-64 of the Chicago Municipal Code (Code) to review Harris' applications for demolition permits, and determine whether compensation should be paid. Under the Code, the building department must forward to the Commission applications for demolition of buildings which have been designated landmarks. The application and any recommendations applicable thereto are then forwarded to the finance committee, and ultimately to the city council, which renders the final decision. Oberman asserts that Harris improperly bypassed this administrative process and sought judicial relief.

                [70 Ill.Dec. 199] issuance of a demolition permit would cause an immense and irreparable loss to the petitioners by destroying the Kellogg mansions' unique contribution to the cultural heritage and history of the City of Chicago."   Again, there is no assertion in the petition that Oakdale's property values will be decreased.  Oakdale further alleges

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