Manor Healthcare Corp. v. Guzzo
| Decision Date | 01 February 1990 |
| Docket Number | No. 89-1043,89-1043 |
| Citation | 894 F.2d 919 |
| Parties | MANOR HEALTHCARE CORP., a corporation, Plaintiff-Appellee, v. Antonino GUZZO, Concetta Guzzo, Frank Greco and Concetta Greco, Defendants and Third-Party Plaintiffs-Appellants, and Village of Elk Grove Village, an Illinois municipal corporation, and Chicago Title Insurance Company, a Missouri corporation, Third-Party Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Geoffrey G. Gilbert, McBride, Baker & Coles, Chicago, Ill., George B. Knickerbocker, Ronald G. Zamarin, Samelson, Knickerbocker & Payne, DesPlaines, Ill., for plaintiff-appellee.
Joseph Greco, Greco & Tarallo, Schaumburg, Ill., Maurice P. Raizes, Cornelius P. Brown, Bruce J. Waldman, Cohon, Raizes & Regal, Chicago, Ill., for defendants.
Before BAUER, Chief Judge, and FLAUM and MANION, Circuit Judges.
The appellants, Antonino Guzzo, Concetta Guzzo, Frank Greco and Concetta Greco (collectively "Guzzo-Greco"), appeal from three orders of the district court. The first order granted Manor Healthcare Corporation's ("Manorcare") motion for summary judgment; the second order dismissed the Village of Elk Grove Village ("Elk Grove Village" or the "Village") for want of jurisdiction, and the third order denied Greco leave to file supplementary pleadings. We affirm the district court.
In August 1984, Guzzo-Greco entered into an agreement to sell real estate (the "Property") to Michael Lerner, who planned to develop the Property into a senior-care housing facility. At the time the Property was located in unincorporated Schaumburg Township, Cook County, Illinois, contiguous to the villages of Elk Grove and Roselle. Before the contract's May 1, 1986 closing date, preparations were undertaken for the Property to be annexed by Elk Grove.
In October 1985, a petition for annexation, purportedly bearing Guzzo-Greco's signatures, was filed with Elk Grove Village. Although Guzzo-Greco admit to attending several of the Village's hearings on the annexation of the Property, they now deny signing the annexation petition and claim that the signatures are forgeries. At any rate, on July 8, 1986, Elk Grove Village enacted Ordinance 1820 which annexed the Property and required payment of an annexation fee equal to 10% of the purchase price of the Property. Sometime later, the Village adopted Ordinance 1849, which amended Ordinance 1820 in that it extended the time for payment until May 1, 1987.
Lerner was unable to obtain financing for the purchase, so the transaction was not closed and the required annexation fee was not paid.
In July 1987, Guzzo-Greco entered another contract for the sale of the Property, this time with Manorcare. The Purchase Agreement provided that Guzzo-Greco would convey the Property free and clear of all liens and encumbrances and gave Manorcare the right to cure title exceptions at the seller's expense. The agreed upon price of $725,000 was later increased to $805,000.
In September 1987, Chicago Title Insurance Company ("Chicago Title") issued its title commitment, raising as an objection the unpaid 10% annexation fee required by Ordinances 1820 and 1849. On December 11, Manorcare advised Guzzo-Greco of the title exception created by Ordinances 1820 and 1849 and demanded that it be cured. Guzzo-Greco refused, instead filing with the Village a "Petition for Deannexation or in the Alternative Petition to Request Clarification of Village Record." 1 The Village denied the petition.
When Guzzo-Greco refused to close on the Purchase Agreement and cure the title defects, Manorcare filed suit against them seeking specific performance of the contract 2 and a declaratory judgement that Guzzo-Greco were required to cure exceptions under the Purchase Agreement and thus liable for the annexation fee. Guzzo-Greco filed a third-party complaint against Elk Grove Village, seeking a judgment declaring Ordinances 1820 and 1849 null and void. Guzzo-Greco also filed a third-party complaint against Chicago Title for breach of contract and negligence. 3 Guzzo-Greco then filed a motion for summary judgment against Manorcare, claiming that because annexation of the Property was void ab initio, they could not be liable for the fee. They also argued that Manorcare should be estopped from collecting the annexation fee and that Manorcare's failure to comply with certain notification requirements relieved them of liability. Manorcare and Chicago Title both filed cross-motions for summary judgment.
On October 20, 1988, the district court granted Manorcare's and Chicago Title's motions for summary judgment, denying Guzzo-Greco's motions. Guzzo-Greco then filed a motion for reconsideration and for leave to file supplemental pleadings. The district court denied Guzzo-Greco's motion and also dismissed the pendent claims against the Village. Guzzo-Greco then filed a timely notice of appeal.
Guzzo-Greco's first argument on appeal is that the district court erred by granting Manorcare's motion for summary judgment. The district court granted Manorcare's motion on the basis that, under the clear and plain terms of the Purchase Agreement, Guzzo-Greco were obligated to cure exceptions to title and the annexation fee required by Ordinances 1820 and 1849 constituted an exception to title. In the court below, Guzzo-Greco did not dispute either of these conclusions: Guzzo-Greco admitted that if Ordinances 1820 and 1849 were valid, then the annexation fee required by them would constitute an exception. Guzzo-Greco argued, however, that Ordinances 1820 and 1849 were "null and void" because the annexation fee was not paid by May 1, 1987 as required by Ordinance 1849, and thus no annexation fee was owed to the Village. The district court recognized that the validity of the ordinances as originally enacted turned upon the resolution of a number of factual disputes. The court found, however, that the validity of the ordinances annexing the Property was a non-issue since Guzzo-Greco had subsequently ratified the annexation. Because the facts surrounding the ratification were not in dispute, the court found that the annexation fee was owing to the Village and that under the clear language of the Purchase Agreement, Guzzo-Greco were liable for that fee. The district court therefore entered summary judgment in favor of Manorcare.
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Quoting Schoenberger v. Chicago Transit Authority, 84 Ill.App.3d 1132, 1138-39, 39 Ill.Dec. 941, 947, 405 N.E.2d 1076, 1082 (1st Dist.1980), the district court set forth the law of ratification:
Ratification may be express or inferred and occurs where "the principal [in this case Guzzo-Greco], with knowledge of the material facts of the unauthorized transaction, takes a position inconsistent with nonaffirmation of the transaction".... Ratification is the equivalent [of] an original authorization and confirms that which was originally unauthorized.
The court then applied the law to the facts and found that Guzzo-Greco had engaged in an "affirmative act" constituting a ratification of the Village's annexation. None of the facts which the district court found to constitute ratification of the annexation are in dispute. On December 2, 1987, Manorcare and Guzzo-Greco submitted a joint "Petition for Special Use Permit to the Village of Elk Grove Village." The petition requested a special use zoning ordinance permitting Manorcare to construct a 120-bed nursing home and acute care facility on the Property. (Guzzo-Greco had to join in the petition because they were titleholders to the Property.) By joining in the petition, the district court held that Guzzo-Greco necessarily recognized that the Property had been validly annexed, for the Village could grant the special use ordinance only if the Village had jurisdiction to do so--that is, if the Property were in fact located within the Village. The court thus refused to allow Guzzo-Greco to recognize and confirm the annexation as valid on December 2, 1987, and then change their position to argue that the annexation was void in opposition to summary judgment.
On appeal, Guzzo-Greco do not argue that the district court incorrectly applied the law of ratification, nor do they dispute the facts which the district court found to constitute ratification. Nor could they....
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