Village of Bloomingdale v. CDG Enterprises, Inc.

• Decision Date: 21 June 2000
• Docket Number: No. 2-99-0400.,2-99-0400.
• Court: United States Appellate Court of Illinois
• Parties: The VILLAGE OF BLOOMINGDALE, Plaintiff and Counter-defendant-Appellee, v. C.D.G. ENTERPRISES, INC., Defendant and Counter-plaintiff-Appellant.

732 N.E.2d 633

314 Ill. App.3d 210

247 Ill.Dec. 578

The VILLAGE OF BLOOMINGDALE, Plaintiff and Counter-defendant-Appellee, v. C.D.G. ENTERPRISES, INC., Defendant and Counter-plaintiff-Appellant.

No. 2-99-0400.

Appellate Court of Illinois, Second District.

June 21, 2000.

Michael J. Morrisroe, C. Kent Frederick, Michael J. Morrisroe, Ltd., Bloomingdale, for C.D.G. Enterprises, Inc.

Richard T. Ryan, Mark F. Smolens, Flynn, Murphy, Ryan & Seyring, Chicago, for Village of Bloomingdale. Justice INGLIS delivered the opinion of the court:

Plaintiff, the Village of Bloomingdale (Village), sued defendant, C.D.G. Enterprises, Inc., for breach of contract, alleging that defendant had not paid for services the Village provided in reviewing defendant's application for rezoning and site plan approval. Defendant answered and filed a counterclaim alleging tortious interference with business expectancy and for recovery under a quasi-contract theory. The gist of defendant's counterclaim was that the Village corruptly misused its governmental powers to prevent defendant's plans from going forward and appropriated the benefits of defendant's plans for developing the properties at issue for its own ends.

On the Village's motion (see 735 ILCS 5/2-619(a)(9) (West 1998)), the trial court dismissed the counterclaim, holding that both counts were barred by the Local Governmental and Governmental Employees Tort Immunity Act (Tort Immunity Act or Act)(745 ILCS 10/1-101 et seq. (West 1998)). After the Village voluntarily dismissed its complaint, defendant timely appealed.

On appeal, defendant argues that (1) the Tort Immunity Act does not bar either count of its counterclaim because the Act does not immunize governmental actions undertaken for corrupt or malicious motives; and (2) the Act does not bar the second count of the counterclaim, for quasi-contract, because section 2-101(a) of the Act (745 ILCS 10/2-101(a) (West 1998)) specifically preserves municipal liability based on contract. We reverse and remand.

The Village's complaint alleged the following. By a written agreement, defendant promised to pay the Village for the services of various professionals who advised it concerning defendant's application for rezoning and site plan approval. The Village had repeatedly billed defendant, but defendant had not paid.

Defendant's counterclaim alleged the following facts in support of both counts. Defendant was the contract purchaser of five parcels of land in unincorporated Du Page County. In March 1995, defendant petitioned the Village's plan commission to rezone the five properties so that defendant could build a subdivision between the Glendale Golf Course on the west and Medinah Road on the east. The rezoning would be subject to the Village's annexation of the properties. Before negotiating the contracts to buy the five properties, defendant's representatives met with the Village mayor, who told them the project would be approved. Beginning in September 1994, defendant's agents met with the Village's land planner and other officials to review defendant's development plan. Following those meetings, defendant submitted its revised land plan, which sought the rezoning and annexation of the properties to permit their development.

The counterclaim alleged further that, between April and October 1995, defendant repeatedly appeared before the planning commission for public hearings on its petition. However, in June or July 1995, the Village secretly formed a "task force" with the aim of insinuating the Village or its chosen developers into the development of the five parcels. Toward this end, the Village pursued the acquisition of the Glendale Golf Course; commissioned Planning Resources, Inc., the Village's consultant in charge of reviewing defendant's petition, to prepare a plan to redesign the golf course so that some of the holes would be on the properties defendant had agreed to acquire; and secretly met with nonresident property owners to create opposition to defendant's plan. The Village kept all these acts secret and never revealed that Planning Resources, Inc., was working in a dual capacity. In August 1995, the planning commission voted down the project, with the chairman pressuring other members to vote no. In October 1995, at a public hearing, the Village's board of trustees voted down defendant's petition. Soon afterward, the Village revealed that it planned to acquire the golf course; it later did so.

Defendant alleged that its petition met all the Village's requirements for rezoning and annexation; that defendant took all the action the Village required; that defendant had spent heavily in reliance on its meetings with the Village; and that, after the Village denied the petition, defendant had to cancel its purchase contracts and forfeit some of what it had paid. Defendant's projected gross profits from the project were $4.8 million.

Count I of the counterclaim alleged that the Village knew of defendant's business expectancy and deliberately frustrated that expectancy by secretly working to force defendant out of the planned development while ostensibly reviewing defendant's petition in order to usurp for itself or for cronies of certain Village officials the benefits of defendant's plans for developing the five parcels. Count II alleged that, when defendant filed its rezoning petition and paid the required fee, the Village became obligated to process defendant's application reasonably and in good faith, which it failed to do. Both counts sought $4.8 million in damages.

In seeking the dismissal of the counterclaim, the Village relied on various provisions of the Tort Immunity Act (see 745 ILCS 10/2-103, 2-104, 2-109, 2-201, 2-205 (West 1998)), arguing that none of the relevant provisions of the Act contained an exception to the immunity from liability bestowed by the Act. Eventually, the trial court granted the Village's motion and dismissed the counterclaim. Defendant timely appealed.

This case comes before us following a dismissal under section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1998)), which provides a means to obtain the summary disposition of issues of law or of easily proved issues of fact. Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill.2d 112, 115, 189 Ill.Dec. 31, 619 N.E.2d 732 (1993). Under section 2-619(a)(9) of the Code, a court may dismiss an action if the claim is barred by affirmative matter avoiding the legal effect of or defeating a claim. 735 ILCS 5/2-619(a)(9) (West 1998). A section 2-619 motion to dismiss admits the legal sufficiency of the cause of action. Hodge, 156 Ill.2d at 115, 189 Ill.Dec. 31, 619 N.E.2d 732. Our review is de novo. Hodge, 156 Ill.2d at 116, 189 Ill.Dec. 31, 619 N.E.2d 732.

On appeal, defendant asserts that the Tort Immunity Act bars neither its claim for tortious interference with a business expectancy nor its claim for recovery in quasi-contract. Relying principally on this court's opinion in River Park, Inc. v. City of Highland Park, 281 Ill.App.3d 154, 217 Ill.Dec. 410, 667 N.E.2d 499 (1996), appeal after remand, 295 Ill.App.3d 90, 229 Ill. Dec. 596, 692 N.E.2d 369 (1998), aff'd in part & rev'd in part on other grounds, 184 Ill.2d 290, 234 Ill.Dec. 783, 703 N.E.2d 883 (1998), defendant maintains that the Act's protections do not extend to acts a municipality performs in bad faith or out of corrupt or malicious motives. Defendant also argues that count II of the counterclaim, for quasi-contract, survives any tort immunity challenge because section 2-101(a) of the Act (745 ILCS 10/2-101(a) (West 1998)) states that nothing in the Act affects municipal liability that is based on contract. We agree.

The Illinois Constitution of 1970 abolished the doctrine of sovereign immunity, which immunized all governmental units in Illinois from tort liability, except as the legislature may thereafter provide by statute. Ill. Const.1970, art. XIII, § 4; Barnett v. Zion Park District, 171 Ill.2d 378, 385-86, 216 Ill.Dec. 550, 665 N.E.2d 808 (1996). Thus, governmental units are liable in tort on the same basis as private tortfeasors (Barnett, 171 Ill.2d at 386,216 Ill.Dec. 550,665 N.E.2d 808), and the Tort Immunity Act defines the situations and circumstances in which governmental units are immune from liability. Harinek v. 161 North Clark Street Ltd. Partnership, 181 Ill.2d 335, 340, 230 Ill.Dec. 11,692 N.E.2d 1177 (1998). In construing the Act, we must ascertain and give effect to the intention of the legislature, and we may not depart from the plain language of the Act by reading into it exceptions, limitations, or conditions that conflict with the express legislative intent. Harinek, 181 Ill.2d at 340,230 Ill.Dec. 11,692 N.E.2d 1177.

Here, defendant has alleged that the Village displaced defendant from the envisioned development and thereby gathered to itself (or to the cronies of certain Village officials) the profit and benefit the defendant expected to earn. The gravamen of defendant's complaint, therefore, is the Village's theft of defendant's opportunity. Thus, defendant is not complaining of the denial of its petition per se but, rather, of the Village's abuse of the governmental process and power to hijack defendant's plans. An examination of the relevant provisions of the Act (sections 2-103, 2-104, 2-109, 2-201, and 2-205) does not indicate any willingness on the part of the legislature to immunize a local governmental unit from the consequences of misusing its powers to oppress its constituents and appropriate to itself or its cronies the expected benefits of the constituents' business ventures.

In addition, we note that, from the earliest cases interpreting the Act, Illinois courts have uniformly held that malicious and corrupt actions are not covered by the Act. See, e.g., Young v. Hansen, 118 Ill. App.2d 1, 9, 249 N.E.2d 300 (1969) (immunity of Act does not extend to misuse of official power); Idlehour Development Co. v. City of...