Terracom Development Group, Inc. v. Village of Westhaven

• Decision Date: 08 February 1991
• Docket Number: No. 1-90-1054,1-90-1054
• Citation: 154 Ill.Dec. 376,568 N.E.2d 376,209 Ill.App.3d 758
• Parties: , 154 Ill.Dec. 376 TERRACOM DEVELOPMENT GROUP, INC., Plaintiff-Appellant, v. VILLAGE OF WESTHAVEN, et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 376

568 N.E.2d 376

209 Ill.App.3d 758, 154 Ill.Dec. 376

TERRACOM DEVELOPMENT GROUP, INC., Plaintiff-Appellant, v. VILLAGE OF WESTHAVEN, et al., Defendants-Appellees.

No. 1-90-1054.

Appellate Court of Illinois First District, Sixth Division.

Feb. 8, 1991.

William D. Maddux & Assoc., Chicago (William D. Maddux, of counsel), for plaintiff-appellant.

Lord, Bissell & Brook, Chicago (Hugh C. Griffin, Daniel J. Zollner and Nancy Shaw, of counsel), Klein, Thorpe & Jenkins, Ltd. Chicago (Dennis G. Walsh, of counsel), for defendants-appellees.

Justice McNAMARA delivered the opinion of the court:

Plaintiff, Terracom Development Group, appeals from an order of the circuit court of Cook County dismissing Terracom's complaint against defendants as being duplicative of a pending federal action.

Terracom is a real estate developing company. In the early 1970s, Terracom began planning the development of 35 acres of land in the Village of Westhaven ("Village"), now known as Orland Park, to occur in four phases: Phase I, involving the "Hunter Subdivision," 21 acres of private, single family homes; Phase 2, involving the "Hunter Apartment Complex," 1.22 acres; Phase 3, involving the "Pheasant Ridge" apartments, 9.23 acres; and Phase 4, involving 6.5 acres of additional single family homes.

In January 1976, the Village's Board of Trustees adopted an ordinance which authorized the execution of a pre-annexation agreement with Terracom in which the Village expressed its desire that Terracom develop the property as proposed. Pursuant to the agreement, the Village issued building permits for the single family homes and plaintiff began construction. Terracom executed a contract in November 1975 with the Orland Park School District ("School District") in which it agreed to pay the School District $44.57 per dwelling not to take any action to oppose Terracom's development project. Terracom also relied upon two letters from the Orland Fire Protection District ("Fire District"), in which the Fire District confirmed that it could adequately protect the phase III development and approved the plans.

Terracom thereafter submitted to the Village a final plan for the apartments, which the Village's Planning Commission approved on May 24, 1977, and on November 6, 1978 as in compliance with the agreement and Village ordinances. Terracom applied to the Village for building permit fees for the apartments in September 1978, and applied to the Illinois Housing Development Authority ("IHDA") and the U.S. Department of Housing and Urban Development ("HUD") for mortgage financing, mortgage insurance and Section 8 rental subsidies for the Hunter and Pheasant Ridge apartments. Terracom alleged that after being notified of its application for Section 8 rental subsidies in January 1979, as required by federal law, the Village engaged in a course of conduct designed to prevent construction of the apartments, which included: refusing to approve final plans in March 1979, which the Planning Commission had previously approved; refusing to issue or calculate fees for building permits; and erroneously claiming that Terracom failed to comply with the ordinances and the agreement as its basis for refusal.

In August 1979, Terracom and its trustee, LaSalle National Bank, sought a writ of mandamus in the circuit court of Cook County requiring the Village to approve the final plans and issue the building permits. In April 1980, the circuit court entered judgment for plaintiffs against the Village, finding that Terracom's plans for the apartments fully complied with the agreement and the ordinances. The court ordered that Terracom was entitled to construct the apartments as proposed and was entitled to the issuance of building permits upon payment of appropriate fees and presentation of a loan commitment.

Although Terracom thereafter presented a loan commitment and permit fees to the Village, the Village did not issue the permits, claiming that the application was incomplete and that Terracom failed to pay the requisite fees. In June 1980, plaintiffs filed a petition for rule to show cause based upon the Village's refusal to issue the permits. After a hearing, the parties entered into an agreed order in August 1980 requiring the Village to deposit the permits with the court, which the court would release pursuant to conditions in the order. Terracom alleges, however, that it was unable to obtain the requested financing commitment from IHDA and HUD because of the Village'sconduct. The Village did not deposit the permits with the court, and in March 1982, plaintiff filed a motion for enforcement of the agreed order in the circuit court. In April 1982, the court ordered the Village to deposit the permits by May 11, 1982, which the Village failed to do. On May 17, 1982, the court entered an order stating that the order itself constituted the requisite building permits.

Terracom and J. Fred Creek, its partner in the Pheasant Ridge Complex, filed suit against the Village, the Fire District and the School District in November 1982, in the circuit court of Cook County. Defendants subsequently removed the action to the federal court for the Northern District of Illinois in March 1983, where the case is presently pending.

Count I of this complaint alleged that the Village breached its contract with plaintiffs by refusing to issue building permits for the multi-family apartment units, and by engaging in conduct to prevent Terracom from securing financial commitments for the development. Count II alleged that the School District breached its November 1975 contract with Terracom by sending letters to IHDA and a state representative opposing the development and claiming that Terracom did not notify or consult the School District about the development. Count III alleged that the Fire District sent a letter to the IHDA indicating that the apartment complex would be a fire hazard. By so doing, plaintiffs alleged that the Fire District breached its contract with the Village to provide services and also breached its representations to plaintiffs that the Fire District had approved the final plans for the development. Each count specifically referred to the two multi-family apartment units, Hunter and Pheasant Ridge. Counts I and II specifically alleged that defendants' conduct delayed the closing on the financial commitments for the apartment complexes. Both counts I and II also alleged that defendants' breach delayed the development of the single family homes and phase IV and requested damages therefore. Count II does not specifically refer to the single family homes.

On January 25, 1985, Terracom, along with Creek and Shell, who each had acquired an interest in the Pheasant Ridge Apartments, filed a first amended complaint in the federal action to add a negligence count. In February 1989, plaintiffs filed a second amended complaint to include a substantive due process claim, referring specifically to the apartment complexes. On March 31, 1989, 17 days before trial was set to begin, Terracom sought leave to file a third amended complaint in order to add counts for the damages to Phases I and IV of the development. The district court denied plaintiffs' motion in a memorandum order entered August 31, 1990, citing plaintiffs' "unjustified and extreme tardiness" and the resulting prejudice to defendants. On the next day, Terracom filed the present suit in the circuit court of Cook County seeking the damages which were precluded in the federal action. The trial judge dismissed the action on March 9, 1990.

On appeal, Terracom contends that the trial court erred in granting defendants' motion to dismiss pursuant to section 2-619(a)(3) of the Illinois Code of Civil Procedure. Terracom maintains that the state and federal actions are not "for the same cause" because the state action seeks damages for phases I and IV of the development plan while the federal action seeks damages for phases II and III. It also claims that even if the trial court properly applied section 2-619(a)(3) to this case, the court should have stayed, rather than dismissed, the action until disposition of the federal case.

Under section 2-619(a)(3) of the Code of Civil Procedure (Ill.Rev.Stat.1987, ch. 110, para. 2-619(a)(3)), a defendant may seek dismissal on the ground that "there is another action pending between the same parties for the same cause." Our supreme court in Skolnick v. Martin (1964), 32 Ill.2d 55, 57, 203 N.E.2d 428, 429, stated that two actions are for the same cause where "relief is requested on substantially the same state of facts." Moreover, according to this court, "the crucial inquiry is whether the two actions arise out of the same transaction or occurrence (citation omitted), not whether the legal theory, issues, burden of proof or relief sought materially differ between the two actions." (Tambone v. Simpson, (1980), 91 Ill.App.3d 865, 867, 46 Ill.Dec. 649, 651, 414 N.E.2d 533, 535.) The purpose of the two actions need not be identical, rather there need only be a substantial similarity of issues between them. (People ex rel. Phillips Petroleum Co. v. Gitchoff (1976), 65 Ill.2d 249, 2 Ill.Dec. 367 357 N.E.2d 534; Catalano v. Aetna Casuality and Surety Co. of Illinois (1982), 105 Ill.App.3d 195, 61 Ill.Dec. 94, 434 N.E.2d 31; Tambone v. Simpson.) The trial court in its discretion decides whether to grant the motion (Kellerman v. MCI Communications Corp. (1986), 112 Ill.2d 428, 98 Ill.Dec. 24, 493 N.E.2d 1045), and such decision will not be disturbed absent an abuse of discretion. Arthur Young and Co. v. Bremer (1990), 197 Ill.App.3d 30, 143 Ill.Dec. 736, 554 N.E.2d 671.

We conclude that the trial court properly dismissed the action under section 2-619(a)(3).

Both the federal and state actions involve the same operative facts and the same issues. Each action involves the same three agreements: Terracom's agreement with the Village, Terracom's November 1975...