Raintree Homes v. Village of Long Grove

• Decision Date: 15 April 2009
• Docket Number: No. 2-06-1105.,2-06-1105.
• Parties: RAINTREE HOMES, INC., and Raintree Builders, Inc., Plaintiffs-Appellees and Cross-Appellants, v. THE VILLAGE OF LONG GROVE, Defendant-Appellant and Cross-Appellee.
• Court: United States Appellate Court of Illinois

906 N.E.2d 751

RAINTREE HOMES, INC., and Raintree Builders, Inc., Plaintiffs-Appellees and Cross-Appellants, v. THE VILLAGE OF LONG GROVE, Defendant-Appellant and Cross-Appellee.

No. 2-06-1105.

Appellate Court of Illinois, Second District.

April 15, 2009.

Rehearing Denied May 19, 2009.

Eiden & O'Donnell, Ltd., Robert T. O'Donnell, Eiden & O'Donnell, Ltd., Vernon Hills, IL, for Appellant.

Margaret Morrison Borcia, Morrison & Morrison, P.C., Waukegan, IL, for Appellee/Cross-Appellant.

Justice JORGENSEN delivered the opinion of the court:

Plaintiffs, Raintree Homes, Inc., and Raintree Builders, Inc. (collectively, Raintree), filed a one-count amended complaint against defendant, the Village of Long Grove (Village), seeking: (1) a declaratory judgment as to the validity of Village ordinances requiring the payment of impact fees to the Village as a condition of obtaining building permits; and (2) a refund of the impact fees it paid to the Village for 19 homes it built there between 1993 and 1997. Following a bench trial, the trial court found the Village's ordinances unenforceable and rejected the Village's affirmative defenses. Accordingly, it entered judgment in Raintree's favor and awarded Raintree $114,700. The Village appeals from that order.

Raintree subsequently moved for modification of the judgment order, seeking prejudgment interest on the impact fees it had paid to the Village. The trial court denied Raintree's motion. In its cross-appeal, Raintree appeals the denial of its motion.

We affirm.

I. BACKGROUND

Section 4-1-4(B) of the Village's code sets forth that, "as a condition of the issuance of a building permit for the construction of a dwelling unit, the building permit applicant shall be required to donate monies to the Village." Long Grove Municipal Code § 4-1-4(B) (amended June 25, 1996). The monies, or impact fees, are for the benefit of the school districts and for the acquisition, maintenance, preservation, and operation of open space in the Village. Long Grove Municipal Code § 4-1-4(B) (amended June 25, 1996).

Section 4-1-4(A) of the Village code provides:

"Purpose: During the past ten (10) years, the school districts operating within the jurisdiction of the Village have experienced a population increase due principally to the subdivision of vacant land, both within and without the jurisdiction of the Village, and planning studies have indicated that such population growth will accelerate within the next ten (10) years, resulting in the rapid disappearance of available land and the marked increase in land values. It has further been determined that helpful productive community life depends in part upon the availability of recreational park space and adequate school facilities, and, further, that new subdivisions and new houses automatically generate more pupils for the school districts within the Village, and that, finally, it has been determined that the influx of pupils is not compensated for by a corresponding increase of tax revenue for the Village or the school districts as a direct result of the building of residences for a substantial period of time up until the township assessors have modified the property assessment to correspond with the increased value of the property, and, during this same interval, it has been determined that school districts and villages provide services to the owners or occupants of these properties by way of educating the children and providing Municipal services, and it has been further determined that the available open space in the Village is shrinking at a rapid pace due to the construction of residences within the Village. It has been a consistent policy of the Village to preserve open space whenever possible, and it is essential in doing such to acquire monies to finance the purchase and maintenance of open spaces, and it has further been the policy of the Board to attempt to assist school districts in their financial straits whenever possible and to cooperate with the school districts to secure adequate funding to satisfactorily educate students from the new residences located in the Village." Long Grove Municipal Code § 4-1-4(A) (1979).

Specifically, Village Ordinance 89-O-23, entitled "An Ordinance Amending the Building Code in Reference to the Designation of School Districts for Contributions" and adopted on July 11, 1989, amended sections 4-1-4(B)(1) and 4-1-4(B)(2) of the Village's code. Village of Long Grove Ordinance No. 89-O-23 (eff. July 11, 1989). As amended, the code required a building permit applicant to pay to the Village $1,200 per permit for the elementary school district, and $500 per permit for the high school district, in which the property for which the permit is sought is located. Long Grove Municipal Code § 4-1-4(B)(1), (2) (1989). The total impact fees were, therefore, $1,700 per building permit. The school impact fees "(as adjusted by the formula on file with the Village Administrator) shall be forwarded by the Village to the appropriate" elementary or high school district "for its general operation fund at the time of issuance of a certificate of occupancy. This payment is designed to partially reimburse the school districts for expenditures made on behalf of new pupils from new residences within the Village." Long Grove Municipal Code § 4-1-4(B)(1), (2) (1989).

Ordinance 93-O-13, adopted on April 27, 1993, amended section 4-1-4(B)(3) of the Village's code. Village of Long Grove Ordinance No. 93-O-13 (eff. April 27, 1993). As amended, the code required the payment of impact fees from a building permit applicant in the amount of $2,600 per permit to the Village's general fund and was "designed to enable the Village, with these moneys, to acquire, maintain, and preserve open space in the Village." Long Grove Municipal Code § 4-1-4(B)(3) (1993). Four hundred dollars of the impact fees were allocated to the Long Grove Park District "to assist in the acquisition, maintenance, and preservation of open space within the Village, and for the general operational expenses relating thereto." Long Grove Municipal Code § 4-1-4(B)(3) (1993). The open space fees, coupled with the school fees, raised the total impact fees per building permit to $4,300.

Ordinance 94-O-11, adopted on July 12, 1994, raised the impact fees for the school districts to $2,500 for the elementary school district and to $1,500 for the high school district. Village of Long Grove Ordinance No. 94-O-11 (eff. July 12, 1994). It also raised the open space fees to $3,300, of which $800 was allocated to the Long Grove Park District. Village of Long Grove Ordinance No. 94-O-11 (eff. July 12, 1994). The 1994 amendment, thus, raised the total impact fees to $7,300 per building permit.

Raintree filed its amended complaint on July 14, 2000. Raintree alleged that, between February 1993 and August 1997, it entered into contracts to build homes in the Village, a non-home-rule municipal corporation. To obtain the building permits, Raintree was required to pay certain impact fees. Between August 15, 1988, and March 24, 1997, Raintree obtained 43 building permits from the Village. In its complaint, Raintree sought a refund of the impact fees it paid for 19 permits issued to it by the Village from August 1993 through March 1997. Pursuant to the Village's code, the impact fees between March 1993 and June 24, 1994, were $4,300 per permit. Raintree paid the fees and obtained eight building permits from the Village. Between June 26, 1994, and February 1998, the Village's impact fees were $7,300 per permit. Raintree paid the fees and obtained 11 permits.

Raintree further alleged that, under the contracts it entered into with certain purchasers, it was required to deliver completed homes to them within a specified time. It made verbal commitments to other purchasers to deliver completed homes within a specified time. Raintree alleged that it purchased lots in the Village upon which it constructed "spec" homes. Raintree secured mortgages to purchase the lots. In 1994, Raintree applied for and received building permits for the construction of "spec" homes on three lots in the Village. It paid $4,300 each for two of the permits and $7,300 for the third permit.

Raintree further alleged that the Village has statutory authority to establish reasonable requirements as to school grounds and may, under sections 11-12-5 and 11-12-5.1 of the Illinois Municipal Code (65 ILCS 5/11-12-5, 11-12-5.1 (West 2000)), require that a subdivider dedicate land or make a cash contribution in lieu of land for new schools as a condition of the Village's acceptance of a plat of subdivision. Raintree argued that the Village's required donation to the elementary and high school districts for issuance of a building permit did not constitute a cash contribution in lieu of a dedication of land for new schools, but was purportedly for the districts' general operation funds.

In its answer, the Village asserted several affirmative defenses, including estoppel, failure to add necessary parties, the voluntary payment doctrine, and the pass-on defense.

A. Edward Brown

The bench trial commenced on March 13, 2006. The testimony focused on the Village's affirmative defenses.

Edward Brown, president of Raintree, testified that Raintree builds upper-end, semi-custom, and custom single-family homes. Raintree Builders, Inc., was incorporated in 1978 and initially conducted business in the Naperville, Bartlett, Hinsdale, and Burr Ridge areas. Raintree Homes, Inc., was incorporated in 1986, when Brown decided to expand his business to the Village and the Kildeer and Barrington areas. He took on as a partner Chuck Eckert. Eckert was president of Raintree Homes, Inc., and Brown was vice president and treasurer. According to Brown, he oversaw the operation and assisted Eckert in the day-to-day operations and trained him to run the business. Raintree was not a subdivider or developer in the Village. It purchased lots from...