Mack Indus., Ltd. v. Vill. of Dolton

• Decision Date: 31 March 2015
• Docket Number: No. 1–13–3620.,1–13–3620.
• Parties: MACK INDUSTRIES, LTD., Plaintiff–Appellant, v. The VILLAGE OF DOLTON and Bert Herzog, Defendants–Appellees.
• Court: United States Appellate Court of Illinois

30 N.E.3d 518

MACK INDUSTRIES, LTD., Plaintiff–Appellant

v.The VILLAGE OF DOLTON and Bert Herzog, Defendants–Appellees.

No. 1–13–3620.

Appellate Court of Illinois, First District, Fifth Division.

March 31, 2015.

James R. Pittacora and Elizabeth S. Stevens, both of Pittacora Law Group, LLC, of Chicago, for appellant.

Larry S. Kowalczyk and Jason Callicoat, both of Querrey & Harrow, Ltd., and John B. Murphey, of Rosenthal, Murphey, Coblentz & Donahue, both of Chicago, for appellees.

OPINION

Justice REYES delivered the judgment of the court, with opinion.

¶ 1 Plaintiff Mack Industries, Ltd. (Mack), appeals an order of the circuit court of Cook County dismissing its verified amended complaint against defendants Village of Dolton (Village) and Bert Herzog (Herzog). On appeal, Mack contends the circuit court erred in dismissing three of the four counts of the verified amended complaint: (1) seeking a declaratory judgment; (2) alleging breach of contract by the Village; and (3) alleging willful and wanton, retaliatory misconduct by Herzog as the Village's manager. For the following reasons, the judgment of the circuit court is affirmed.

¶ 2 BACKGROUND

¶ 3 The record on appeal discloses that on September 20, 2012, Mack filed a verified complaint against the Village, containing the following allegations. Mack is the owner and manager of approximately 195 single-family homes (Mack properties) in the Village, a home rule municipality. Mack's complaint primarily arises out of the Village's provision of water service.

¶ 4 At all times relevant to the complaint, the Village exercised control over the supply of water to residential properties within the Village. A Village ordinance¹ prohibited private companies and individuals from supplying water to any building, structure or premises into which water service is introduced. A Village ordinance also provided that water meter readings were to be taken every three months. If no one was present on the premises, the water meter reader was required to leave a United States postal card for the customer to record the water usage and mail the reading to the Village clerk. If no postal card was returned to the Village clerk within 10 days of a second meter reading, premises against which charges remained outstanding “may be considered for ‘red tagging’ in preparation for ‘shut off’ of water to the premises.” After the expiration of the time for payment as specified by ordinance, a list was required to be compiled of those premises with unpaid charges and the ordinance provided such premises “shall be authorized for ‘red tagging’ and ‘shut off.’ ” The ordinance required the Village clerk to send notice by mail to the owner of premises scheduled for “ red tagging,” specifying the day and time the meter would be “red tagged” and water service would be shut off. By ordinance, owners and users of water service were jointly and severally liable for water charges. The ordinance further provided that if water charges were not paid within 60 days of the issuance of a bill, the charges would be deemed delinquent and constitute a lien on the real estate to which the service was supplied. The ordinance additionally provided, however, that the Village clerk could refrain from filing sworn statements regarding these liens with the recorder of deeds in Cook County if the Village proposed to sue the owner, occupant or user of the real estate in a civil action. Mack required its lessees to be responsible for the payment of water bills.

¶ 5 Mack alleged that the stated practice of the Village's water department was to flag properties for disconnection of water service once a bill was more than 30 to 60 days overdue. If a payment was not made after a notice of termination, service would be disconnected. This practice allegedly applied to unpaid water bills in excess of $150. In addition, the Village entered into payment plans with tenants relating to water service, but required the tenant or owner to make an initial payment of at least 60% of the unpaid balance.

¶ 6 In the late summer of 2010, the Village allegedly ceased enforcing its water service ordinances with respect to the majority of the Mack properties, thereby failing to send notices of delinquency, “red tag” properties, and disconnect water service. In several instances, water service was not disconnected until the lessee vacated the property, leaving Mack solely responsible for the unpaid charges and a fee for reconnection of service. In many cases, the unpaid water bills on a property exceeded $700. In some instances, the Village agreed to payment plans with Mack's lessees, under which only nominal payments were tendered to the Village, without notice to or the agreement of Mack.

¶ 7 Mack further alleged the Village routinely ignored requests to send notices of disconnection to Mack's delinquent properties when the bills were 60 days overdue. In September 2010, Mack commenced corresponding with the Village about the difficulties Mack experienced regarding the lack of enforcement of the Village water ordinances. In January 2012, Mack also discussed the issue with the Village counsel, who promised prompt action. From August 2010 through September 2012, Mack was forced to pay in excess of $18,000 in water charges that accrued after Mack requested disconnection of services. Mack estimated it would be forced to remit in excess of $20,000 of water charges as of the date the complaint was filed, and further charges would continue to accrue until the issue was resolved. In March 2011, the Village commenced denying rental occupancy permits to properties with unpaid water charges, thereby preventing Mack from establishing new tenancies.

¶ 8 In count I of the verified complaint, Mack sought a judgment declaring the Village's pattern and practices were not in compliance with the terms of the Village ordinance relating to water service by failing to: (1) conduct a second meter reading or leave the appropriate notices; (2) “red tag” premises after notice was provided; and (3) disconnect water service at properties more than 60 days delinquent in payment. Mack also sought an award of attorney fees. In count II of the verified complaint, Mack alleged the Village breached a contract to provide water service to property owners. Mack asserted the contract was created as a matter of law by the ordinance establishing the Village as the sole provider of water service. In count III of the verified complaint, Mack sought an injunction against retaliation by the Village. Mack alleged that after it provided the Village with a draft copy of its verified complaint in July 2012, the Village: (1) contrary to its prior practice, commenced issuing citations regarding various Mack properties without providing an opportunity to cure alleged violations; (2) failed or refused to issue a letter certifying one of the Mack properties as destroyed by fire, thereby precluding Mack from obtaining remediation of asbestos on that property; and (3) arbitrarily ordered reinspections of Mack properties and refused to recertify at least 16 Mack properties, based on a need to review paperwork regarding those properties.

¶ 9 On December 27, 2012, the Village filed a motion to dismiss Mack's verified complaint pursuant to section 2–619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2–619.1 (West 2012) ).² The Village first contended counts I and II of Mack's verified complaint must be dismissed pursuant to section 2–619 of the Code (735 ILCS 5/2–619 (West 2012) ), arguing the Village is immune from liability for failing to enforce its own ordinances, pursuant to section 2–103 of the Local Governmental and Governmental Employees Tort Immunity Act (Tort Immunity Act or Act) (745 ILCS 10/2–103 (West 2010) ). The Village also contended count III of Mack's verified complaint must be dismissed pursuant to section 2–619 of the Code, arguing the Village is immune from liability for failing to issue permits or certificates, pursuant to section 2–104 of the Tort Immunity Act (745 ILCS 10/2–104 (West 2010) ). The Village further argued Mack's verified complaint must be dismissed in its entirety pursuant to section 2–615 of the Code (735 ILCS 5/2–615 (West 2012) ), arguing all three counts failed to state a claim for which relief may be granted.

¶ 10 On January 9, 2013, Mack filed a motion for leave to file an amended complaint. On January 16, 2013, the circuit court entered an order granting Mack leave to file its amended complaint instanter.

¶ 11 On January 17, 2013, Mack filed a verified amended complaint adding Herzog as a defendant. The factual allegations of the verified amended complaint were substantially similar to Mack's initial complaint, although Mack only claimed 151 Mack properties were located within the Village. Mack also alleged it was required to pay exorbitant water bills regarding 28 of these properties. Mack further alleged that on numerous occasions, the Village refused to correct overcharges after Mack notified the Village regarding its problems with water service. Mack additionally alleged it was required to pay a $500 water charge for a property it purchased in September 2012. Moreover, Mack alleged that commencing in September 2012, the Village and Herzog: (1) refused to provide police service to Mack property managers complaining about the criminal activity of Mack's lessees, and in one case refused to provide fire protection services; (2) arbitrarily changed rental occupancy inspection deposit amounts; (3) required Mack to replace water meters at a cost of $300 to $400 per property as a condition of the sale of 65 Mack properties to an investor; (4) required Mack's lessees to pay high water bill balances incurred by prior lessees; (5) disconnected water service to Mack properties that had not accrued delinquent water charges; (6) refused to timely connect water services at one of its properties; and (7) refused to speak to Mack employees or agents regarding these issues.

¶ 12...