Shodeen v. Chicago Title and Trust Co., 2-87-0640

• Decision Date: 20 November 1987
• Docket Number: No. 2-87-0640,2-87-0640
• Citation: 162 Ill.App.3d 667,114 Ill.Dec. 68,515 N.E.2d 1339
• Parties: , 114 Ill.Dec. 68 Kent W. SHODEEN, Plaintiff-Appellee, v. CHICAGO TITLE AND TRUST COMPANY, as Trustee Defendant-Appellant (Collins Development Corporation, a Delaware Corporation, Defendant).
• Court: United States Appellate Court of Illinois

Page 1339

515 N.E.2d 1339

162 Ill.App.3d 667, 114 Ill.Dec. 68

Kent W. SHODEEN, Plaintiff-Appellee, v. CHICAGO TITLE AND TRUST COMPANY, as Trustee Defendant-Appellant (Collins Development Corporation, a Delaware Corporation, Defendant).

No. 2-87-0640.

Appellate Court of Illinois Second District.

Nov. 20, 1987.

Portes, Sharp, Herbst & Kravets, Ltd., David I. Herbst, Jodi I. Firfer, Chicago, for Chicago Title and Trust Co.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Robert S. Minetz, Chicago, Casey & Krippner, Robert F. Casey, Geneva, for Kent W. Shodeen.

Justice UNVERZAGT delivered the opinion of the court:

The defendant, Chicago Title & Trust Company (Chicago Title), as trustee under trust No. 1081582, appeals from the order of the circuit court which granted the motion of the plaintiff, Kent Shodeen, for a preliminary mandatory injunction ordering the defendant to convey 26 real estate lots to the plaintiff. On appeal, the defendant contends that the trial court erroneously granted this relief where: (1) the court order was, in effect, a decree of specific performance as well as a disruption of the status quo; (2) the plaintiff failed to present evidence that the circumstances necessitated such relief; and (3) the court based its decision to enter an injunction on improper considerations, namely, the possible damage incurred by individuals who had previously contracted to purchase homes from the plaintiff. For the reasons set forth below, we reverse.

The following facts form the basis of this appeal. On September 6, 1974, the Collins Development Corporation (Collins), as seller, and the plaintiff, as buyer, entered into an installment contract for the sale of 126 acres of vacant land in St. Charles, Illinois, which was part of a proposed development to be known as Fox Chase. This contract, which stated that time was of the essence, provided that the plaintiff would make full payment of the purchase price on or before 10 years from the date that the St. Charles city council approved the preliminary development plan for Fox Chase. The contract further provided that the seller would be responsible for several on-site costs such as engineering and utilities as well as the off-site costs of water and sewer connections. In addition, paragraph 20 of the installment contract stated, in part:

"Seller further agrees to construct a new boulevard (Fox Chase Boulevard) along the North and West sides of Buyers subject property at no expense to the Buyer."

Paragraph 23 of the contract contained a notice provision which provided:

"In the event Buyer shall fail to make any of the payments required herein * * * and provided such failure is not cured or remedied within ninety (90) days after the receipt by Buyer of a written notice from Seller describing said failure, then this Agreement shall be forfeited at the option of Seller, and all sums heretofor paid shall be retained * * * by the Seller."

In 1982, Collins experienced financial difficulties and transferred the property which had not already been conveyed under the installment contract to the defendant, Chicago Title, as trustee pursuant to a settlement agreement between Collins, Continental Bank and others. Thereafter, on December 17, 1984, the city council of St. Charles passed a resolution stating that the preliminary plan entitled "Preliminary Plan, Unit 1 of Hunters Field" was approved subject to the following condition:

"4. Concurrent with the submittal of any Final Engineering Plans and Final Plat for Phases 3 or 4 (as shown on the plan received November 9, 1984), developer shall submit plans for the construction of Fox Chase Boulevard for approval, subject to the codes and regulations of the City. No final plat for Phase 3 or 4 shall be approved until the design, location, or construction planning of Fox Chase Boulevard are approved by the City."

After the transfer of ownership to Chicago Title, the plaintiff and Chicago Title amended the original installment contract four times by extending its completion date to May 15, 1987. During the pendency of the agreement between the plaintiff and Collins, as well as thereafter between the plaintiff and Chicago Title, the plaintiff paid a unit price per lot and the then seller conveyed the individual lots. Through May 28, 1987, the plaintiff had paid over $1.6 million to either Collins or Chicago Title for 273 lot purchases. This amounted to 60% of the total contract. During the 13-year pendency of this installment contract, it was not uncommon for the plaintiff to contract with third-party purchasers for the construction of houses on lots prior to his actually paying the lot price and having the lot conveyed to him.

During the time from February 7 to April 27, 1987, the plaintiff entered into 23 contracts for the sale of individual lots in Fox Chase. He also possessed deposits from three other prospective purchasers. The plaintiff scheduled closing dates for these lots to commence on June 16, 1987, and to continue until November 16, 1987. Each of these lots was owned by Chicago Title and was subject to the installment agreement.

On May 15, 1987, the plaintiff filed a complaint for injunctive and other relief. On May 29, 1987, plaintiff filed a four-count amended complaint and motion for preliminary injunction wherein he requested, inter alia, the entry of a "preliminary injunction requiring Chicago Title to provide Shodeen with Trustee's Deeds in accordance with the past practices of the parties upon payment of the lot prepayment fee to the Clerk of the Court."

The complaint maintained, in substance, that the failure of Collins and Chicago Title to complete construction of the utility lines and the new boulevard described in paragraph 20 of the contract had resulted in a breach of that contract and had adversely affected the development of the real estate, since St. Charles would not permit further development until the new boulevard was constructed and the peripheral utilities were provided. The complaint also alleged that the final payment of the balance of the purchase price due on May 15, 1987, was less than the cost to complete the construction described in paragraph 20, and, although pursuant to paragraph 23 Chicago Title has the right to serve notice should the plaintiff fail to make any of the payments required by the contract, Chicago Title had not served the plaintiff with any notice of default. In this regard the plaintiff requested an order which barred Chicago Title from serving the plaintiff with any notice of default. The complaint also requested a mandatory injunction requiring the defendant to perform the obligations set forth in paragraph 20 and to convey the remainder of the real estate to the plaintiff as well as a judicial declaration that Chicago Title had a duty under the contract to construct the utility lines and the road, and also that its anticipatory breach of the contract released the plaintiff from any additional performance. Finally the plaintiff requested damages from Chicago Title for breach of contract in excess of $8 million plus costs and fees.

On June 11 and 13, 1987, the court held an evidentiary hearing on the plaintiff's motion for injunctive relief. At this hearing, Collins testified that it was now insolvent and had no assets to fulfill any of the seller's responsibilities under the original agreement. On direct examination, the plaintiff then described the development plan for Fox Chase and testified that Chicago Title had not installed the utilities or the boulevard pursuant to the contract. He also stated that there had been an adverse effect on the value of the remaining lots as a result of Chicago Title's failure to install utilities and complete Fox Chase Boulevard. The plaintiff also stated that the cost to complete the boulevard was more than the balance owed for the property under the installment contract. He also stated that the property which was intended to be Fox Chase Boulevard was not part of the property he was purchasing under the contract.

The director of city planning of St. Charles testified to the substance of the city council's resolution. He also stated that ordinarily when a developer puts in a subdivision, the developer and/or landowner completes an application for the roadway which includes its location, size, and capacity.

On cross-examination, the plaintiff stated that at the time the parties had signed the most current extension in March 1987, he had already signed contracts to build homes for third-party purchasers. He also stated that he had taken no action towards the completion of Fox Chase Boulevard, since pursuant to the contract he did not consider it his responsibility. Indeed, in his opinion, Chicago Title owned the property. He acknowledged that if the court failed to direct Chicago Title to relinquish the deeds, he would be in breach of all the contracts with his customers. Furthermore, with regard to count IV of his complaint for damages the plaintiff stated that $8 million would make him whole.

On June 13, 1987, the court issued an order for a preliminary injunction which ordered Chicago Title to execute and deliver trustee deeds to the 26 lots under the existing contract upon the plaintiff's depositing $7,200 per lot in an interest-bearing account. In deciding to enter the injunction with respect to those 26 lots, the court stated that the public interest was of particular concern in this case, as well as the number of homeowners who would be left "hanging in the winds" and the multiplicity of lawsuits if the injunction failed to issue. The court denied the plaintiff's request for an injunction for the conveyance of the balance of the real estate. The defendant then filed this timely appeal.

The sole issue in this appeal concerns the propriety of the trial court's decision to order Chicago Title to relinquish the 26 lots in question. In this regard defendant Chicago Title sets forth three arguments....