Find Legal Information

THIRD DIVISION
December 10, 2003

JUSTICE KARNEZIS delivered the opinion of the court:

In this interlocutory appeal, plaintiff, the City of Chicago (City), appeals from anorder of the circuit court dismissing defendants Andrew A. Jahelka, Richard O. Nicholsand Leon A. Greenblatt III from the cause of action. The question presented in thiscase is whether the allegations in the City's complaint were factually sufficient to state acause of action against defendants. We affirm.

This cause of action arose as a result of the deteriorating exterior of acommercial building (the building) commonly known as 188-194 West Randolph Streetand 151-169 North Wells Street in Chicago.⁽¹⁾ The building had numerous crackedwindows and much of the exterior stone and terra cotta was in need of repair. As aresult of the building's dangerous condition, the City erected a "canopy" to preventpieces of the exterior from falling onto nearby sidewalks, streets and Chicago TransitAuthority elevated tracks. The City filed suit to impose fines against the building'sowners as well as to recover the costs of constructing the canopy, which totaled$3,200,667.

The City filed its third amended complaint on June 19, 2002, against defendantsas well as the building's owner, Telegraph Properties Limited Partnership (TPLP) andTPLP's general partner, Telegraph Properties, Inc. (TPI). Shortly thereafter, TPI filedits suggestion of bankruptcy. The complaint alleged that defendants Jahelka, Nicholsand Greenblatt III were, respectively, the president, treasurer and secretary of TPI, andeach had a "substantial ownership interest" in both TPI and TPLP. The City allegedthat because defendants were officers of TPI and were "substantial" owners in both TPIand TPLP, they could be held personally liable for the fines the City sought to imposeand for the costs of constructing the canopy. The City's derivative theory of liabilityincluded allegations that defendants, as owners and officers of TPI, controlled theassets of TPI and TPLP, and through their control and management of those entities,deprived the building of the resources necessary to maintain it in a safe condition. Thecomplaint also alleged various financial endeavors in which defendants engaged toshow their "control" over the building's assets. Counts I through III of the four-countcomplaint alleged defendants were personally liable for the condition of the buildingpursuant to several sections of the Chicago Municipal Code. Count IV allegeddefendants were personally liable under a theory of common law public nuisance.

Pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615(West 2000)), defendants moved to dismiss those allegations of the complaint thatsought to hold them personally liable for the building's condition.⁽²⁾ The circuit courtgranted the motion with prejudice, finding that the sections of the Chicago MunicipalCode (Code) upon which the City relied did not impose liability on corporate individualswho were not directly responsible for the building code violations. The court noted thatpursuant to the Code, liability could only be imposed upon owners, property managers,and those who were in possession or control of the property or those who collectedrents for the building. The court further stated that because the complaint failed toallege that defendants owned the building or were responsible for the management orcontrol of the building, the complaint failed to state a cause of action againstdefendants. The City now appeals from this ruling.

A motion to dismiss a complaint brought pursuant to section 2-615 of the Codeof Civil Procedure tests the legal sufficiency of a pleading. Universal Scrap Metals, Inc.v. J. Sandman & Sons, Inc., 337 Ill. App. 3d 501, 504 (2003). The court accepts as trueall well-pleaded facts and the inferences that can reasonably be drawn from thosefacts. Universal Scrap Metals, 337 Ill. App. 3d at 504. The relevant inquiry is whether,when viewed in the light most favorable to the plaintiff, the allegations are sufficient tostate a cause of action upon which relief can be granted. Universal Scrap Metals, 337Ill. App. 3d at 504. Our review on appeal is de novo. Neppl v. Murphy, 316 Ill. App. 3d581, 583 (2000).

On appeal, the City first argues that Counts I and II of the complaint stated acause of action against defendants because the Code provisions impose liability uponcorporate officers for violations for which they are directly responsible.

Count I of the complaint alleged in part:

"Pursuant to sections 13-196-03[6]⁽³⁾, 13-196-031, 13-12-020and 1-4-090 of the Code, [defendants] were jointly and severallyliable for the Code violations * * * because they were at all relevanttimes owners and officers of TPI, beneficial owners of thepremises, owner/agents of TPLP, and persons entitled to thecontrol and direction of the management or disposition of thepremises."

Count II alleged in part:

"Pursuant to Sections 13-196-03[6], 13-196-031, 13-12-020and 1-4-090 of the Code, [defendants] are jointly and severallyliable for the costs incurred by the City as a result of the Codeviolations * * * because they were at all relevant times owners andofficers of TPI, beneficial owners of the premises, owner/agents ofTPLP, and persons entitled to the control and direction of themanagement or disposition of the premises."

We set forth below the relevant Code sections. Section 13-196-036 of the Codeprovides in part:

"The owner/agent of any building which constitutes animminent danger and hazard to the public shall take immediateaction to have a critical examination performed upon such buildingand provide the ensuing report to the department of buildings. * * *

Any costs incurred by any department of the city in takingemergency actions due to the dangerous and hazardous conditionof an unsafe exterior wall * * * shall be a debt due and owing to thecity and recoverable from the owner/agent of such building." Chicago Municipal Code