City of Chicago v. Harris Trust & Savings Bank

Case Date: 02/11/2004
Court: 1st District Appellate
Docket No: 1-02-3213 Rel

FOURTH DIVISION
February 11, 2004



1-02-3213

 

THE CITY OF CHICAGO, a Municipal
Corporation,

                     Plaintiff-Appellee,

                             v.

HARRIS TRUST AND SAVINGS BANK, T/U/T
38310, PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey Corporation,
as Mortgagee, WALGREEN COMPANY; LASALLE
NATIONAL BANK, Successor Trustee to
Exchange National Bank of Chicago, T/U/T
22872, MIDWEST NEWSREEL THEATER, INC.;
JUST CLASS, INC., LEONARD SEARCY,
Individually and d/b/a Popeye's Famous
Fried Chicken; AETNA LIFE INSURANCE
COMPANY; WABASH RANDOLPH PARTNERSHIP;
HELGA M. DOBBS, Individually and as
Trustee of George R. Dobbs, Trust;
MISERICORDIA HOME d/b/a Heart of Mercy;
AKTIEN VEREIN, DES ZOOLOGISHEN GARTENS,
a Foreign Corporation, COLE TAYLOR BANK,
T/U/T 38310, DEAN E. PARKER, MORT
COOPER, LTD., an Illinois Corporation,
COMMONWEALTH TRADING, INC., a Delaware
Corporation, d/b/a Hit or Miss; SUNG
KIM, Individually, and d/b/a Wig
Fashions of Chicago; STATE-RANDOLPH
CURRENCY EXCHANGE; DESMOND'S FORMAL
WEAR, INC.; WORLD'S MONEY EXCHANGE,
INC., DMS HAIR DESIGN, INC., MURPHY'S
CAP AND GOWN COMPANY, PAMELA KEITH,
d/b/a Glorious Hair; and UNKNOWN
OTHERS,

                    Defendants

(Whiteco Outdoor Advertising, a
Division of Whiteco Industries, Inc.,
Successor Assignee of All-Sign
Corporation, Assignee of Diamond Vision,
Inc.,

                    Defendant-Appellant).

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Appeal from the
Circuit Court of
Cook County.







































Honorable
Alexander P. White,
Judge Presiding.

 

PRESIDING JUSTICE QUINN delivered the opinion of the court:

This appeal arises from a declaration and motion to abandonfiled by plaintiff, City of Chicago (the City), seeking to abandonits taking of a leasehold interest in an outdoor billboard signutilized by defendant, Whiteco Outdoor Advertising, now known asLamar Advertising Company (Whiteco).(1) Whiteco sells space on itsbillboards to third parties in order to convey commercial and non-commercial advertisements to the public. The circuit courtapproved the declaration, granted the City's motion to abandon andordered the City to pay the reasonable expenses incurred byWhiteco. Whiteco appeals. For the following reasons, we affirm.

BACKGROUND

On July 13, 1999, the City instituted condemnation proceedingsto acquire property located at the northeast corner of Randolph andState Streets (subject premises) as part of the Central Loop TaxIncrement Financing Redevelopment Project (the project). Thesubject premises consist of an improved, two-story and basementcommercial building with an outdoor, roof-top advertising sign. The then-legal owner of the subject premises was Harris Trust andSavings Bank, as trustee under trust number 38310, the beneficiaryof which is Helga M. Dobbs, individually and as trustee of theGeorge R. Dobbs Trust (collectively,the owner). The owner leasedto 11 tenants, including 10 retail spaces within the building andWhiteco, which utilized the outdoor advertising sign on the roof. All the tenants, except Whiteco and Walgreen Company (Walgreens),had leases that contained condemnation clauses.

On March 2, 2000, pursuant to an agreed partial judgment, theCity agreed to pay the owner compensation in the amount of $7.9million for all right, title and interest in the subject premises,with the exception of the leasehold interests of tenants Whitecoand Walgreens. Whiteco's lease expired on November 20, 2001, whileWalgreens' lease terminates on October 31, 2009.

The lease under which Whiteco maintained its billboardoriginally was executed between the owner and Diamond Vision, Inc.(Diamond), for a term of seven years, from December 1, 1984, untilNovember 30, 1991 (subject lease). The subject lease provided thatthe lessee, Diamond, had the right to erect and maintainadvertising signs and further stated that such signs were to remainthe personal property of the lessee and were to be removed by thelessee upon termination of the lease. In addition, the subjectlease stated that the lessor had the right to terminate the lease"to demolish or add to the Building by the erection of anadditional floor or floors above the existing roof level," providedthat the lessee is given 365 days' notice.

On June 8, 1988, Diamond assigned the subject lease andconveyed the billboard to All-Sign Corporation (All-Sign). All-Sign entered into an agreement with the owner on August 23, 1988,extending the termination date of the subject lease to November 30,1996. In March 1995, the owner and All-Sign executed a leaseamendment and extension agreement to extend the termination date toNovember 30, 2001. The lease amendment provided, inter alia, thatthe lessee was required to remove its trade fixtures within sevendays prior to the expiration of the lease.

On April 16, 1996, Whiteco paid All-Sign $225,000 for theassignment of the subject lease and conveyance of the billboard.

Thereafter, on February 7, 1999, the city council (theCouncil) adopted an ordinance approving the project and definingthe project area, which included the subject premises. On May 1,2000, the City deposited $7.9 million into the Cook County treasurypursuant to the March 2, 2000, agreed partial judgment. On August30, 2000, the Council enacted the ordinance, which authorizedacquisition of all interests in the subject premises on or beforeOctober 15, 2000.

On October 12, 2000, in order to facilitate the existingschedule of the project, the City sought to acquire Walgreens' andWhiteco's leasehold interests by a quick-take proceeding, pursuantto section 7-103 (735 ILCS 5/7-103 (West 2002)) of the Code ofCivil Procedure (Code). Following a hearing, the circuit courtdetermined the preliminary just compensation for Whiteco'sleasehold interest totaled $92,400 and ordered the City to depositthat sum with the Cook County treasurer. The City deposited thefunds with the treasurer on February 6, 2001.

On February 15, 2001, the circuit court entered an ordervesting title to Whiteco's leasehold interests in the City andrequiring that Whiteco vacate the subject premises and tenderpossession to the City on or before June 15, 2001. The courtentered a similar order with respect to Walgreens after determiningthe preliminary just compensation for Walgreens' leasehold andordering the City to deposit that sum with the Cook Countytreasurer.

On April 6, 2001, Whiteco filed a petition for withdrawal ofaward of preliminary just compensation to obtain the $92,400deposited with the Cook County treasurer. The City then moved toabandon its taking of Whiteco's leasehold interest on April 10,2001, arguing that a condemnor may abandon a taking at any timeuntil it has taken both title and possession of the property to beacquired. The City explained in its motion that the redevelopmentproject for which the City required title and possession of thesubject leasehold had experienced a significant delay, therebypermitting continued possession by Walgreens and Whiteco of theirleasehold premises beyond June 15, 2001, and beyond the November30, 2001, termination date of Whiteco's lease. The City sought thereturn of the $92,400 preliminary just compensation it haddeposited with the Cook County treasurer and asked the circuitcourt to determine the reasonable attorney fees, costs and expensesincurred by Whiteco in defending the condemnation proceeding. Whiteco objected to the abandonment, asserting the City is notauthorized to abandon after it had acquired title of Whiteco'sleasehold.

On May 21, 2002, the circuit court conducted an evidentiaryhearing on the economic impact of the taking upon Whiteco. Bothparties presented evidence regarding the value of Whiteco'sleasehold interest. Rodolfo Aguilar, a real estate appraiser,testified on behalf of Whiteco that the fair market cash value ofthe billboard is $753,000. Aguilar's opinion was unclear withrespect to whether he based his findings on the assumption thatWhiteco's lease would have been extended indefinitely. Fred R.Tadrowski, a real estate appraiser, testified on behalf of the Citythat the value of the billboard on the date of the taking was$92,400 and that the depreciated value of the billboard on thesubject lease's termination date was $31,600.

On May 29, 2002, the parties stipulated that Whiteco couldcontinue its possession of the leasehold premises under the termsof the subject lease pending 30 days' written notice of terminationby either party. The parties further agreed that the stipulationcould not be considered as evidence in connection with the existingdispute between the parties relative to the propriety of the City'sabandonment of its acquisition of the leasehold, or its valuation. On September 19, 2002, the circuit court entered a memorandumdecision and judgment, which included numerous findings regardingthe City's motion to abandon. With respect to the issue of whetherthe City took possession of Whiteco's leasehold interest, the courtfound that the City "did not take possession of the leaseholdinterest when it condemned the fee. The Order Vesting Titlereserved transfer of possession to June 15, 2001. The Cityabandoned the acquisition of [Whiteco's] interest on April 10,2001, prior to the June 15, 2001 transfer date." Although thecourt agreed that the billboard is a trade fixture, it disagreedthat the City had taken possession. The court noted that Whitecopresently has possession and control of the billboard and theadvertisements of its clients, which have appeared withoutinterruption. According to the court, under the express terms ofthe subject lease, Whiteco has the right and obligation to removethe billboard at its own expense when the lease terminates, butthat right and obligation did not vest until termination of thelease. The court noted that payment of rent to the managementcompany designated by the City and use of the billboard withadvertising provided by a Whiteco client are evidence that thesubject lease was not terminated.

In addition, the circuit court ruled that the City had theauthority to abandon the taking of Whiteco's leasehold after it hadacquired title. The court held:

"A condemnor can abandon a condemnation after it hasacquired title through a quick-take proceeding. Inconventional eminent domain proceedings possession ofproperty cannot be transferred until final compensationhas been determined, but the proceeding entered intobetween Whiteco and the City was a quick-take. *** Thequick-take proceeding is a separate proceeding within thecondemnation case, and provides a methodology for vestingof title and tender of possession upon payment of apreliminary award by the Court, all prior to thedetermination of final just compensation by a jury, ifrequired, and entry of a final judgment. *** Under thequick-take statutory scheme, possession is the last stepin the relief sought by the condemnor."

Finally, concerning Whiteco's contention that the City actedin bad faith, the circuit court stated, "[t]he plans of the [C]itydid change, particularly with respect to the timing of thedevelopment, [which] was the basis for the City's then perceivedneed to implement the quick-take proceeding, but while title wasvested possession has still not occurred. Further evidence thatthe City did not act in bad faith is the inclusion, in itsabandonment of the acquisition of the leasehold interest, a requestthat the Court determine those reasonable expenses incurred by[Whiteco]." The court approved the City's declaration ofabandonment, granted the City's motion to abandon and ordered theCity to pay the reasonable expenses incurred by Whiteco. Whitecofiled a timely notice of appeal.

Before addressing the merits of Whiteco's appeal, the Citycontests this court's jurisdiction to review this case because theSeptember 19, 2002, order approving the City's abandonment was nota final judgment. The City notes that the order contains noexpress finding by the circuit court pursuant to Supreme Court Rule304(a) (155 Ill. 2d R. 304(a)) that there is no just reason todelay an appeal. The City maintains that the proceedings beforethe circuit court were not yet concluded because condemnationproceedings against Walgreens were ongoing.(2) The City also arguesthat this case is not appealable under the supreme court rulegoverning interlocutory appeals (166 Ill. 2d R. 307(a)(7)). Inaddition, the City asserts that this court should dismiss Whiteco'sappeal because it failed to include a jurisdictional statement inits brief, in violation of Supreme Court Rule 341(e) (188 Ill. 2d341(e)).

Whiteco has not responded to these arguments, but in oralargument before this court, Whiteco's counsel stated that Rule307(a)(7) is inapplicable. Whiteco's notice of appeal states thatit appeals the September 19, 2002, memorandum decision and judgmentpursuant to Supreme Court Rules 301 and 303 (155 Ill. 2d Rs. 301,303). A review of the record shows that the September 19, 2002,circuit court decision contains no language indicating a finaljudgment pursuant to Rule 304(a).

Rule 301 allows appeals from final judgments of a circuitcourt in civil cases as a matter of right, and Rule 303 sets thetime frame for filing the notice of appeal after the entry of finaljudgment. 155 Ill. 2d Rs. 301, 303. "A judgment is consideredfinal 'if it terminates the litigation between the parties on themerits or disposes of the rights of the parties, either on theentire controversy or a separate part thereof.'" In re Curtis B.,203 Ill. 2d 53, 59, 784 N.E.2d 219 (2002), quoting R.W. DuntemanCo. v. C/G Enterprises, Inc., 181 Ill. 2d 153, 159, 692 N.E.2d 306(1998). "A final order is one which sets or fixes the rights of aparty." Curtis B., 203 Ill. 2d at 59.

Here, the circuit court determined whether the City had theright to abandon its eminent domain action to take Whiteco'sleasehold interest. The circuit court's memorandum decision andjudgment is a final order and not interlocutory under Rule307(a)(7). Further, Rule 304(a) is inapplicable because neithermultiple parties nor multiple claims were involved in the City'sdeclaration to abandon and motion to abandon its taking ofWhiteco's leasehold interest. Because the circuit court'smemorandum decision and judgment set the right of the City toabandon its right to Whiteco's leasehold, the order was finalpursuant to Rule 301 and Whiteco's notice of appeal, therefore, confers jurisdiction upon this court. While the circuit court'smemorandum decision and judgment did not specify the reasonableexpenses incurred by Whiteco, neither party raises this issue as abasis to find that the circuit court's memorandum decision andjudgment is not a final order. In addition, although Whiteco hasfailed to include a jurisdictional statement in violation of Rule341(e), in the interest of judicial economy, the merits ofWhiteco's appeal will be considered.

ANALYSIS

I

Whiteco initially asserts that the circuit court erred bygranting the City's motion to abandon its condemnation of Whiteco'sleasehold. Whiteco argues that, once the City acquired title ofthe subject premises, it had no authority to abandon. Whitecocontends that section 7-110 (735 ILCS 5/7-110 (West 2002)) of theCode specifically bars dismissal of a complaint in a condemnationor abandonment of a condemnation proceeding after the condemnor hastaken possession pursuant to an order of taking. Whiteco states inits opening brief, however, that "[n]o one disputes that [Whiteco]retained physical possession and use of the [billboard] - albeit atthe pleasure of the City." Whiteco argues that physical possessionof the billboard is irrelevant due to the City's destruction of thelease by its taking of the subject premises.

Whiteco, citing section 7-105 (735 ILCS 5/7-105 (West 2002))of the Code, contends that, in the context of this case, possessionfollowing a quick-take proceeding occurred after the payment ofpreliminary just compensation. Whiteco, without providing legalauthority, notes that the "typical chronology" of a quick-takescenario is as follows: (1) setting preliminary compensation; (2)deposit of the compensation with the county treasurer; (3) vestingof title; and (4) tender of possession that may occur "upon thevesting of title or at a mutually agreeable date in the future." Whiteco concedes that this framework "appear[s] to support theorder of the trial court," but nevertheless argues that legislativehistory relating to abandonment reflects that the court's order wasimproper.

The City, citing Code section 2-1009(a) (735 ILCS 5/2-1009(a)(West 2002)), responds that, at any time before trial or hearingbegins and upon notice to the opposing party, it is entitled todismiss its action without prejudice, by order filed in the cause. The City argues that, under section 2-1009(a), it obtained anappropriate dismissal. The City maintains that, because it nolonger needed to acquire Whiteco's leasehold on an expedited basis,it appropriately moved to abandon its condemnation of Whiteco'sleasehold. Relying upon section 7-110 of the Code, the Citycontends that a quick-take proceeding may be terminated by thecondemnor prior to the time that it takes possession of theproperty at issue.

The circuit court's decision to grant the City's motion toabandon will not be disturbed unless it is contrary to the manifestweight of the evidence. Southwestern Illinois DevelopmentAuthority v. Al-Muhajirum, 318 Ill. App. 3d 1005, 1007, 744 N.E.2d308 (2001). A decision is against the manifest weight of theevidence if the facts clearly demonstrate that the court shouldhave reached the opposite conclusion. In re D.M., 336 Ill. App. 3d766, 773, 784 N.E.2d 304 (2002). Whether the City's motion toabandon its eminent domain action is constitutionally sound isreviewed de novo. Al-Muhajirum, 318 Ill. App. 3d at 1008. Inaddition, a de novo standard of review is applied to issues ofstatutory construction. Paris v. Feder, 179 Ill. 2d 173, 177-78,688 N.E.2d 137 (1997). A court's primary objective in construinga statutory provision is to determine and give effect to thelegislature's intent. Kraft, Inc. v. Edgar, 138 Ill. 2d 178, 189,561 N.E.2d 656 (1990). The language of the provision is the bestevidence of that intent and must be given its plain and ordinarymeaning. Paris, 179 Ill. 2d at 177.

Code section 7-110 provides, "[a]fter the plaintiff has takenpossession of the property pursuant to the order of taking, theplaintiff shall have no right to dismiss the complaint or toabandon the proceeding, as to all or any part of the property sotaken, except upon the consent of all parties to the proceedingwhose interests would be affected by such dismissal orabandonment." (Emphasis added.) 735 ILCS 5/7-110 (West 2002).

The statutory language provided in section 7-110 of the Codeis clear and unambiguous and, therefore, will be given effectwithout resort to other aids of construction. Lulay v. Lulay, 193Ill. 2d 455, 466, 739 N.E.2d 521 (2000). Following the plain andordinary language in section 7-110 (Lulay, 193 Ill. 2d at 466),abandonment of the condemnation proceeding is precluded only aftera plaintiff has taken possession of the property. 735 ILCS 5/7-110(West 2002). If the intent of the legislature was to precludeabandonment following the payment of preliminary just compensation,section 7-110 would have included such language.

Addressing the cases upon which Whiteco relies, St. Louis &Southeastern Ry. Co. v. Teters, 68 Ill. 144 (1873), City of Chicagov. Barbian, 80 Ill. 482 (1875), and City of Chicago v. Shepard, 8Ill. App. 602 (1881), none involved a quick-take action pursuant tosection 7-103 of the Code, which originally was enacted as part ofthe Eminent Domain Act (Act) on July 11, 1957 (Ill. Rev. Stat 1957,ch. 47, par. 2.1). Further, each of the cases actually favor theCity's position and reaffirm the propriety of the circuit court'sjudgment.

First, in Teters, the condemnor sought a railroad right of wayover private farm property and took possession of the propertyprior to judgment awarding the owner compensation. The supremecourt held that when the condemnor has taken possession of thesubject property before a trial to determine the depreciation valueof the property, the condemnor need not procure informationproviding the names of all persons interested in the subjectproperty, or provide for the court the amount of compensationrequested by the affected owners. If the condemnor takespossession of the subject property before such a trial, "right andjustice would require that a judgment should be rendered againstthe [condemnor] for the damages found by a jury, and an executionshould be awarded for its collection." Teters, 68 Ill. at 150. Pertinent to this case, however, the court also stated, "where the[condemnor] has not appropriated the land at the time of trial, itwould be improper to render a judgment for the recovery of themoney, or to award execution, because it could not be known thatthe [condemnor] will ever enter upon the land. *** Although thepetition [for condemnation] has been filed, the damages assessed,and the order of the court pronounced and entered, the money mustbe paid before the right to enter attaches, and until they pay thedamages, they have the right to abandon ***." (Emphasis added.) Teters, 68 Ill. at 150-51. Accordingly, Teters stands for theproposition that a condemnor can abandon the subject property untilhe or she has either taken possession or, if the condemnor has notyet taken possession, he or she has a right to abandon untildamages as assessed by a jury are paid. This proposition does notsupport Whiteco's argument.

Likewise, in Barbian, the supreme court held that a proceedingto condemn property for public use may be abandoned even afterdamages are assessed, if before payment thereof or deposit for theowner, the property has remained unmolested. 80 Ill. at 485, 487-88. The appellate court in Shepard followed both Teters andBarbian, stating that "the applicant for condemnation may, at anytime before payment of the compensation, or the appropriation ofthe property by taking and retaining possession, discontinue andabandon the improvement and all proceedings to carry it intoeffect." 8 Ill. App. at 608.

Whiteco argues that the City's deposit of $92,400 for thepreliminary just compensation of Whiteco's leasehold interestterminated the City's right to abandon the condemnationproceedings. Whiteco's reliance upon the above-discussed cases andits argument that payment of preliminary just compensationprecludes abandonment are misplaced.

In Department of Public Works & Buildings v. Vogt, 51 Ill.App. 3d 770, 778, 366 N.E.2d 310 (1977), the State appealed acircuit court judgment granting defendant's motion to dismiss apetition to take certain land pursuant to the Act (Ill. Rev. Stat.1975, ch. 47, par. 1 et seq.). The State petitioned to take landowned by defendants to construct a bridge. The court entered anorder finding that the State had the authority to exercise a quick-take and set an amount for preliminary just compensation. Afterthe State deposited the requisite amount with the county treasurer,the court entered an order vesting the State with title to theproperty.

The Vogt court addressed the finality of the quick-take orderwith respect to the State's right to proceed. The State argued onappeal that the quick-take order was a final order which could notbe vacated absent an appeal in accordance with the Act. Notingsection 2.8 of the Act (Ill. Rev. Stat. 1971, ch. 47, par. 2.8),which preceded section 7-110 of the Code and contained nearlyidentical language, the court found that the State "can abandon itsproject or dismiss the proceeding up to the time when possession ofthe questioned premises has taken place." Vogt, 51 Ill. App. 3d at777. According to the court, because the State had neither takenpossession nor initiated construction on the property in question,it could dismiss its suit for defendant's property and recover itsmoney even though more than five years had passed since titlebecame vested in the State. Vogt, 51 Ill. App. 3d at 777; see alsoDepartment of Public Works & Buildings v. Greenlee, 63 Ill. App. 2d425, 431, 211 N.E.2d 771 (1965).

In Chicago, St. Louis & Western R.R. Co. v. Gates, 120 Ill.86, 91, 11 N.E. 527 (1887), another case relied upon by Whiteco,the landowner had filed a cross-petition to recover damages toproperty not actually taken. The Gates court held, "[h]ad therights of the parties, - the petitioner and the landowner, - become fixed by the proceedings which had been instituted, adifferent question might arise ***. The filing of the petitionconferred no rights in the land sought to be taken on the railroadcompany, except the bare right to proceed and condemn." 120 Ill.at 91.

In the instant case, the City filed its motion to abandon itscondemnation of Whiteco's leasehold on April 10, 2001. TheFebruary 15, 2001, order vesting title fixed the rights of theparties by vesting the City with title in Whiteco's leasehold, butreserving the City's right to possession until June 15, 2001. There is no record evidence showing the City has ever takenpossession of the billboard. Instead, the record shows thatWhiteco enjoyed possession of the billboard and utilized theadvertising space for its clients until the date the leaseterminated, November 30, 2001, and beyond. Because the City hasnot yet taken possession of Whiteco's leasehold pursuant to theorder vesting title, the City can abandon its taking of Whiteco'sleasehold and recover the amount deposited as preliminary justcompensation. 735 ILCS 5/7-110 (West 2002). Following section 7-110 of the Code and the above-discussed Illinois authority, thecircuit court's decision to grant the City's motion to abandon andapprove the City's declaration to abandon was not against themanifest weight of the evidence.

II

Whiteco next contends that it must be given the opportunity toseek just compensation because the City has taken its leaseholdinterest. Whiteco argues that by paying just compensation to theowner on May 1, 2000, the City acquired title to the subjectpremises, which constituted "one taking" of the entire subjectpremises. Whiteco maintains that this taking destroyed the lease,requiring the City to remove the billboard for the project toproceed. In support of its argument, Whiteco notes the circuitcourt's finding that the billboard was a trade fixture. Whitecoavers it was entitled to just compensation because, as a tenant ofthe leasehold property, Whiteco had a compensable interest in boththe subject lease and the billboard that is protected by both thefederal and state constitutions.

The City responds that Whiteco is not entitled to anycompensation because the City did not take Whiteco's property. TheCity maintains that Whiteco has never been deprived of the use orenjoyment of the billboard on the roof of the subject premises. The City argues that because it never had possession of Whiteco'sleasehold, Whiteco's attempt to recover compensation for thisproperty should be rejected.

The fifth amendment of the United States Constitution andarticle I, section 15 of the Illinois Constitution both prohibitthe taking or damaging of private property for a public purposewithout payment of just compensation. U.S. Const., amend. V; Ill.Const. 1970, art. I,