Republic Bank of Chi. v. Vill. of Manhattan

• Decision Date: 15 May 2015
• Docket Number: 3–13–0380.,Nos. 3–13–0379,s. 3–13–0379
• Citation: 32 N.E.3d 1141
• Parties: REPUBLIC BANK OF CHICAGO, Plaintiff–Appellant, v. The VILLAGE OF MANHATTAN, Defendant–Appellee (Lakeside Towns at Liberty Center Development, LLC, Lawrence W. Sisk, Jenell M. Sisk, Michael K. Gallagher, Eastern & Smith Manhattan, LLC, Gallagher Homes, LLC, Tramore Townhome Association, Inc., Commonwealth Edison Company, Ameritech Corporation, Illinois Bell Telephone Company, Unknown Owners, and Non–Record Claimants, Defendants). Republic Bank of Chicago, Plaintiff–Appellant, v. The Village of Manhattan, Defendant–Appellee (Eastern & Smith Manhattan, LLC, Lawrence W. Sisk, Jenell M. Sisk, Michael K. Gallagher, Route 52 Manhattan, LLC, E & S Development North, LLC, Krause Construction, LLC, Beary Landscaping, Inc., Zausa Development Corporation, Stonegate Duplex Association, Stonegate Phase I Homeowners Association, Stonegate Phase II Homeowners Association, Stonegate Phase III Homeowners Association, Stonegate Phase IV Homeowners Association, Stonegate Phase V Homeowners Association, Commonwealth Edison Company, Ameritech Corporation, Illinois Bell Telephone Company, Nicor Gas Company, Kraus Cable Television Systems, Lakeside Towns at Liberty Center Development, LLC, Unknown Owners, and Non–Record Claimants, Defendants).
• Court: United States Appellate Court of Illinois

32 N.E.3d 1141

REPUBLIC BANK OF CHICAGO, Plaintiff–Appellant

v.The VILLAGE OF MANHATTAN, Defendant–Appellee (Lakeside Towns at Liberty Center Development, LLC, Lawrence W. Sisk, Jenell M. Sisk, Michael K. Gallagher, Eastern & Smith Manhattan, LLC, Gallagher Homes, LLC, Tramore Townhome Association, Inc., Commonwealth Edison Company, Ameritech Corporation, Illinois Bell Telephone Company, Unknown Owners, and Non–Record Claimants, Defendants).

Republic Bank of Chicago, Plaintiff–Appellant

v.The Village of Manhattan, Defendant–Appellee (Eastern & Smith Manhattan, LLC, Lawrence W. Sisk, Jenell M. Sisk, Michael K. Gallagher, Route 52 Manhattan, LLC, E & S Development North, LLC, Krause Construction, LLC, Beary Landscaping, Inc., Zausa Development Corporation, Stonegate Duplex Association, Stonegate Phase I Homeowners Association, Stonegate Phase II Homeowners Association, Stonegate Phase III Homeowners Association, Stonegate Phase IV Homeowners Association, Stonegate Phase V Homeowners Association, Commonwealth Edison Company, Ameritech Corporation, Illinois Bell Telephone Company, Nicor Gas Company, Kraus Cable Television Systems, Lakeside Towns at Liberty Center Development, LLC, Unknown Owners, and Non–Record Claimants, Defendants).

Nos. 3–13–0379

3–13–0380.

Appellate Court of Illinois, Third District.

May 15, 2015.

Edward P. Freud (argued), Timothy S. Breems, Michael B. Bregman, Ruff, Freud, Breems & Nelson, Ltd., Chicago, for appellant.

James A. Murphy (argued), Mahoney, Silverman & Cross, Ltd., Joliet, for appellee.

OPINION

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

¶ 1 Plaintiff Republic Bank of Chicago filed two separate complaints against multiple defendants to foreclose on roads and outlots contained in two failed subdivisions located in the Village of Manhattan (Village). The Village filed motions to dismiss the complaints, arguing that the roads and common areas had been dedicated to the Village. The trial court granted the Village's motions to dismiss. On appeal, Republic Bank argues that (1) the roads and common areas were not properly dedicated to the Village, and (2) even if they were properly dedicated, Republic Bank is still entitled to foreclose on them. We affirm.

¶ 2 In 2006, Eastern & Smith Manhattan, LLC (Eastern & Smith), purchased 134.51 acres of land in the Village of Manhattan with plans to construct Stonegate Subdivision. Eastern & Smith obtained the funds to purchase the property from Republic Bank, which held an initial mortgage on the property in the amount of $8,351,646.66. The initial mortgage was executed in July 2006, but was later amended and modified on six occasions. Republic Bank recorded a junior mortgage on the property on February 26, 2007.

¶ 3 In preparation for development, Stonegate was subdivided and platted in five phases from August 30, 2007, to April 14, 2009. The plats showed 352 residential lots, as well as streets and common areas. The plats for Phases 1 through 3 were recorded on August 30, 2007. The plat for Phase 4 was recorded on December 6, 2007, and the plat for Phase 5 was recorded on April 14, 2009. Republic Bank signed each of the plats under a portion of the plat entitled, “Mortgagee's Certificate,” which states: “This is to certify that Republic Bank of Chicago as Mortgagee * * * consents to the recording of the subdivision as herein shown.”

¶ 4 Each plat identifies roads with names, followed by “(hereby dedicated),” and “(heretofore dedicated)”, as well as land identified as easements for stormwater draining and detention, public utility and drainage, and surface overland flow. Each plat contains provisions stating that stormwater draining and detention easements, public utility and drainage easements, and surface overland flow easements are “reserved for and granted to the Village of Manhattan.” The plats also contain a “Public Easement” provision, which states: “A public easement of ingress, egress, and the use and enjoyment of the Village of Manhattan over Outlots 5, 6, 7, 8, 9 and 10 is hereby reserved, granted and dedicated.”

¶ 5 Republic Bank released its lien on three lots located in Phase 1 of Stonegate Subdivision and recorded releases for those lots on October 29, 2007. The releases refer to the lot numbers contained in the plat for Phase 1 of the subdivision.

¶ 6 In 2007, Lakeside Towns at Liberty Center Development, LLC (Lakeside Towns), purchased 23 acres of land in the Village of Manhattan with plans to construct Tramore Subdivision. Lakeside obtained funds to purchase the property from Republic Bank, which held a mortgage on the property in the amount of $7,105,000. Republic Bank recorded its mortgage in February and May 2007.

¶ 7 In preparation for development, a final planned unit development plat of subdivision was recorded in August 2007, showing 26 residential lots, containing 150 townhomes, and areas designated for roadways and common areas. Republic Bank signed the plat for Tramore Subdivision under a section entitled, “Mortgagee's Certificate,” which states: “This is to certify that Republic Bank of Chicago as Mortgagee * * * consents to the recording of the subdivision as herein shown.”

¶ 8 The plat for Tramore Subdivision identifies general easements “granted to the Village of Manhattan,” and easements for stormwater retention, public utility and drainage, and emergency access. The plat states that all stormwater retention easements, public utility and drainage easements and emergency access easements “are reserved for and granted to the Village of Manhattan.” The plat also contains a provision for “Public Easement,” which states: “A public easement for ingress, egress, public utilities and storm water detention and drainage, and the use and enjoyment of the Village of Manhattan over lots 27–30, inclusive is hereby reserved, granted and dedicated.”

¶ 9 Republic Bank released its lien on one lot in Tramore Subdivision and recorded its release on April 13, 2010. The release refers to the lot number contained in the recorded plat for Tramore Subdivision.

¶ 10 By early 2011, both Eastern & Smith and Lakeside Towns had defaulted on their respective loans from Republic Bank. Although the infrastructure improvements had been started in each subdivision, they had not been completed, and the properties remained largely undeveloped.

¶ 11 In April 2012, Republic Bank filed complaints for partial foreclosure, seeking to foreclose on the roads and outlots of Stonegate Subdivision and Tramore Subdivision. The Village filed motions to dismiss the complaints, pursuant to section 2–619(a)(9) of the Code of Civil Procedure (Code) ( 735 ILCS 5/2–619(a)(9) (West 2012)), arguing that Republic Bank could not foreclose on the roads and common areas because they had been dedicated to the Village and Republic Bank had consented to their dedication. In October 2012, Republic Bank amended its complaint to include a count foreclosing on the roads and outlots of Stonegate Subdivision under its junior mortgage.

¶ 12 The trial court granted the Village's motions to dismiss, finding that the dedication of the roads and outlots in the plats and Republic Bank's acknowledgement of the plats amounted to “a conveyance in fee simple as donated to the public.” Republic Bank filed motions to reconsider the trial court's orders dismissing their complaints. Thereafter, in February 2013, the Village board of trustees passed resolutions confirming and ratifying their acceptance of the streets and easements set forth in the plats for Stonegate Subdivision and Tramore Subdivision. The trial court denied Republic Bank's motions to reconsider.

¶ 13 ANALYSIS

¶ 14 Section 2–619 of the Code allows a litigant to obtain an involuntary dismissal of an action or claim based upon certain defects or defenses. See 735 ILCS 5/2–619 (West 2012). The statute's purpose is to provide litigants with a method for disposing of issues of law and easily proven issues of fact early in a case. See Van Meter v. Darien Park District, 207 Ill.2d 359, 367, 278 Ill.Dec. 555, 799 N.E.2d 273 (2003) ; Advocate Health & Hospitals Corp. v. Bank One, N.A., 348 Ill.App.3d 755, 759, 284 Ill.Dec. 710, 810 N.E.2d 500 (2004). In a section 2–619 proceeding, the moving party admits the legal sufficiency of the complaint but asserts an affirmative defense or other matter to defeat the nonmoving party's claim. Van Meter, 207 Ill.2d at 367, 278 Ill.Dec. 555, 799 N.E.2d 273.

¶ 15 Under subsection (a)(9) of section 2–619, a litigant may obtain an involuntary dismissal of an action if it is “barred by other affirmative matter avoiding the legal effect of or defeating the claim.” 735 ILCS 5/2–619(a)(9) (West 2012). An “affirmative matter” is something in the nature of a defense which negates the cause of action completely. Van Meter, 207 Ill.2d at 367, 278 Ill.Dec. 555, 799 N.E.2d 273. In ruling on a section 2–619 motion to dismiss, the court must construe all of the pleadings and supporting documents in the light most favorable to the nonmoving party. Id. at 367–68, 278 Ill.Dec. 555, 799 N.E.2d 273. On appeal, a dismissal pursuant to section 2–619 is reviewed de novo. Id. at 368, 278 Ill.Dec. 555, 799 N.E.2d 273.

¶ 16 I. DEDICATION

¶ 17 A private party may make either a statutory or common-law dedication of property to a municipality or other entity. First Illinois Bank of Wilmette v. Valentine, 250 Ill.App.3d 1080, 1091, 189 Ill.Dec. 133, 619 N.E.2d 834 (1993). Statutory dedications of property are governed by the Plat Act (765 ILCS 205/1.01 et seq. (West 2012)). Bigelow v. City of Rolling Meadows, 372 Ill.App.3d 60, 64–65, 309 Ill.Dec. 858, 865 N.E.2d 221 (2007). Section 3 of the Plat Act provides that acknowledgement and recording of a plat shall be a conveyance in fee simple of such portions of the premises platted “as are marked or noted on such plat as donated or granted to the public.” 765 ILCS 205/3 (West 2012).

¶ 18 In a statutory dedication, acknowledgement and recording of the plat constitutes a...