Progress Development Corporation v. Mitchell

• Decision Date: 27 January 1961
• Docket Number: No. 12976.,12976.
• Parties: PROGRESS DEVELOPMENT CORPORATION, a corporation and Modern Community Developers, Inc., a corporation, Plaintiffs-Appellants, v. James C. MITCHELL et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

286 F.2d 222 (1961)

PROGRESS DEVELOPMENT CORPORATION, a corporation and Modern Community Developers, Inc., a corporation, Plaintiffs-Appellants, v. James C. MITCHELL et al., Defendants-Appellees.

No. 12976.

United States Court of Appeals Seventh Circuit.

January 4, 1961.

Rehearing Denied January 27, 1961.

COPYRIGHT MATERIAL OMITTED

John W. Hunt, Howard Hoosin, Richard G. Kahn, Willard Wirtz, Newton N. Minow, John P. Morris, Chicago, Ill., for appellants.

Thomas A. Matthews, John B. Moser, Byron S. Matthews, Berle L. Schwartz, Chicago, Ill., for Village of Deerfield, a municipal corp., Joseph Koss, Winston Porter, Harold L. Peterson, John Aberson, Maurice Petesch and Arno Wehle, defendants-appellees.

George B. Christensen, Charles J. Calderini, Jr., Chicago, Ill., for resident defendants-appellees, Winston, Strawn, Smith & Patterson, Chicago, Ill., of counsel.

Gerald C. Snyder, Lewis D. Clarke, Waukegan, Ill., Allyn J. Franke, Chicago, Illinois, for defendant-appellee, Deerfield Park District.

Edward J. Kelly, Chicago, Ill., for appellee, Joseph C. Powell.

Before HASTINGS, Chief Judge, and DUFFY and CASTLE, Circuit Judges.

HASTINGS, Chief Judge.

Plaintiffs filed their verified complaint herein in the district court pursuant to 28 U.S.C.A. § 1331. The complaint charges a conspiracy by all defendants resulting in an alleged violation of the civil rights of plaintiffs guaranteed to them under the equal protection clause of the Fourteenth Amendment to the Constitution of the United States and contrary to the provisions of Title 42, U.S.C.A., §§ 1981, 1982, 1983, 1985 and 1988 (Civil Rights Act). The complaint sought injunctive relief and damages.

The plaintiffs below (appellants) were Progress Development Corporation, an Illinois corporation (Progress), and Modern Community Developers, Inc., a New Jersey corporation (Modern).

Progress has as its principal purposes the acquisition and development of residential subdivisions and the construction and sale of residential housing therein. Its principal place of business is in Chicago, Illinois.

Modern's principal purposes are investment by purchase of shares of stock in Progress and other similar corporations. Modern owns all the issued and outstanding shares of Progress. It also has a financial interest in other corporations engaged in the same type of business in Connecticut, Delaware, New Jersey, New York and Pennsylvania. Its principal place of business is in Princeton, New Jersey.

Beginning in April, 1959, and subsequent thereto, Progress acquired for residential development two unimproved tracts of real estate in the Village of Deerfield, Lake County, Illinois. One tract of approximately fifteen acres became known as Floral Park Subdivision and the other tract of approximately seven acres, as Pear Tree Subdivision.

On July 8, 1959, the plat of Floral Park Subdivision was duly approved by the Deerfield Village Board. This plat was properly recorded on July 31, 1959 and provided for 39 residential lots. Thereafter, Progress commenced the installation of water, sewer and street improvements and the construction of two model homes with Village Board approval.

On September 16, 1959, the plat of Pear Tree Subdivision was approved by the Deerfield Village Board and was recorded on September 18, 1959. This plat provided for twelve home sites.

On December 7, 1959, the Deerfield Park Board took formal action to designate Floral Park and Pear Tree Subdivisions as park sites and ordered that they be acquired by condemnation proceedings for park purposes. Plaintiffs rejected an offer of the Park Board to purchase these subdivisions for $166,199.91. In the same meeting the Park Board, by proper resolutions, provided for a referendum to be held on December 21, 1959 for the purpose of submitting to the voters of Deerfield a $550,000 bond issue, $175,000 of which was designated for the purchase of the two subdivisions owned by Progress. The remainder of the bond issue was to cover the acquisition of four other park sites of approximately 58 acres, making a total of approximately 80 acres in the six tracts.

On December 21, 1959, the bond issue referendum was held. The election carried, and the bond issue was approved by the voters.

On December 22, 1959, plaintiffs filed their verified complaint herein. The complaint, as amended, contains three separate counts.

Count I names as defendants the Deerfield Park District (Park District) and the individuals constituting the Board of the Deerfield Park District (Park Board), namely, James C. Mitchell, its president, and Dudley L. Dewey, Edward J. Walchli, Donald W. Keller and Aksel Petersen, as members thereof. The Park District is a municipal corporation organized under appropriate Illinois statutes and had a population of approximately 11,000 in 1959. The Park Board consists of five elected members who serve without pay. Count I is denominated as "Complaint Against the Park Board." It seeks a temporary injunction pendente lite against the named defendants with the prayer that such injunction be made permanent upon final hearing.

Count II names as defendants the Village of Deerfield, Illinois (Village) and the individuals constituting the Board of Trustees of the Village of Deerfield (Village Trustees), namely, Joseph Koss, its president, and Winston Porter, Harold L. Peterson, John Aberson, Maurice Petesch and Arno Wehle, as members thereof. The Village is a suburban municipality organized under appropriate Illinois statutes and is governed by the Village Trustees. It is largely a "commuter" suburb located about twenty miles northwest of Chicago, Illinois. It contains two elementary school districts, Nos. 109 and 110. Floral Park and Pear Tree Subdivisions are located in District No. 110. Count II is denominated as "Complaint Against the Village Officials." It seeks a temporary injunction against the named defendants with the prayer that it be made permanent upon final hearing.

Count III names as defendants all the foregoing defendants in Counts I and II, except the Park District and the Village. It also names ten additional individual defendants. Two of these ten individuals, Joseph G. Powell and Alfred G. Bradt, are members of an unofficial civic organization of Village residents known as the "Deerfield Citizens Committee" (Citizens Committee) with Powell as president and Bradt as a member thereof. The other eight individuals, Harold C. Lewis, Herbert H. Garbrecht, Hal H. Petit, Robert D. Rierson, Robert G. Mullen, Leonard Bronstein, David J. Maundrell and Frank M. Blake, are members and directors of another unofficial civic organization of Village residents known as the "North Shore Residents' Association" (Residents Association) with Lewis as chairman and Garbrecht as vice-chairman. Count III is denominated as a "Complaint Against All Defendants." It charges a conspiracy by all individual defendants to deprive plaintiffs of the right to conduct their corporate enterprises within the safeguards afforded by the Fourteenth Amendment and Section 1985 of the Civil Rights Act and prays damages in the sum of $750,000.

In Count I plaintiffs seek to enjoin the defendant members of the Park Board from condemning Floral Park and Pear Tree Subdivisions and interfering with plaintiffs' possession thereof. As the ground for such relief plaintiffs charge all individual defendants named in all counts of the complaint with conspiring to induce the Park Board to abuse its lawful powers of eminent domain and thereby acquire such subdivisions "solely for the purpose of preventing Progress from building residential housing thereon and preventing sales of homes thereon to Negroes * * * all in violation of the lawful rights of Progress and of prospective purchasers of such homes."

In Count II plaintiffs seek to enjoin the defendant members of the Village Trustees from enforcing the building code of the Village in an unlawful, arbitrary and capricious manner against Progress. As the ground for such relief plaintiffs charge all individual defendants named in all counts of the complaint with conspiring to induce the Village Trustees to abuse their lawful powers of enforcing local laws and ordinances relating to the Village building code in "seeking to harass, impede, delay and otherwise prevent the construction of homes by Progress and the sale of some of said homes to Negroes" in violation of the lawful rights of plaintiffs. The same general acts of conspiracy alleged in Count I are realleged in Count II by reference.

On the date the complaint was filed (December 22, 1959), plaintiffs moved for a temporary restraining order against the Park Board (under Count I) and the Village Trustees (under Count II). On that afternoon, after hearing oral argument, the trial court denied the motion as to the Park Board and granted it as to the Village Trustees. The Village Trustees were thereby temporarily restrained from harassing Progress by any arbitrary or discriminatory enforcement of the Village building code pending a hearing on the issuance of a preliminary injunction.

On December 24, 1959, the Park District filed proceedings in the Circuit Court of Lake County, Illinois, seeking condemnation of the two subdivisions in Deerfield owned by Progress.¹

No answers to the complaint in the case at bar have been filed by any defendants. The Park Board, Village Trustees, Residents Association and Citizens Committee filed various motions to dismiss the complaint asserting that the court lacked jurisdiction or that the complaint was insufficient as a matter of law. In addition, certain of these motions raised what purported to be affirmative defenses. All defendants subsequently joined in all motions to dismiss. We shall consider these motions and the rulings thereon later in this opinion.

The taking of evidence on plaintiffs' motions for preliminary injunction under Counts I and II began on January 9, 1960 and continued thereafter from...