Save the Prairie Society v. Greene Development Group, Inc.

Case Date: 06/18/2001
Court: 1st District Appellate
Docket No: 1-00-3758 Rel

FIRST DIVISION
June 18, 2001



No. 1-00-3758


SAVE THE PRAIRIE SOCIETY, an Illinois
Not-For Profit Organization,

                  Plaintiff-Appellant,

          v.

GREENE DEVELOPMENT GROUP, INC., an
Illinois Corporation, and FOUNDERS
BANK, as Trustee under Trust Agreement
dated April 9, 1996, and known as Trust
No. 5-1180,

                    Defendants-Appellees

(Midwest Trust Services, Inc., as
Trustee under Trust Agreement dated
January 12, 2000, and known as Trust
Agreement No. 00-107633, American
National Bank and Trust Company of
Chicago, as Trustee under Trust
Agreement dated July 28, 1966, and
known as Trust No. 23730, Continental
Community Bank & Trust Company, as
Trustee under Trust Agreement dated
May 17, 1999, and known as Trust No.
10401, Constantine P. Xinos, Marika P.
Xinos, and John Romanelli,

                    Intervenors-Appellees).

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Appeal from the
Circuit Court of
Cook County
























Honorable
Aaron Jaffe,
Judge Presiding

 

PRESIDING JUSTICE MCNULTY delivered the opinion of thecourt:

Save the Prairie Society sued to enforce a restrictivecovenant in the deed for property Greene Development Group(defendant) owned. Plaintiff sought a preliminary injunctionagainst development of the property pending determination of thesuit to enforce the restrictive covenant. The trial court deniedthe motion for a preliminary injunction. Plaintiff now bringsthis interlocutory appeal pursuant to Supreme Court Rule307(a)(1) (155 Ill. 2d R. 307(a)(1)).

Greene's property is a five-acre lot in the southwest cornerof a 200-acre area Fred'k H. Bartlett & Co. (Bartlett & Co.) onceowned. On November 14, 1942, Bartlett & Co. deeded ten acres toBernard Ferrari. The deed provided that it was

"Subject to the following restrictions *** whichshall be construed as a covenant running with the land:

The minimum cost of any principal building erectedor placed on said property shall be $5,000. ***

Property is restricted to residence and gardenfarming. Property shall not be used for hog, goat ormushroom farming."

The same day Bartlett & Co. deeded all of the remainingproperty to Frederick Bartlett (Bartlett) as trustee under atrust agreement for an entity he called "Fred'k H. BartlettRealty Co. (not incorporated)."

Two months later Bartlett began distributing the remainingproperty to numerous other persons. He signed 21 separate deedsover the following 30 months, finally distributing the last 5parcels between July 1945 and June 1947. Three of the deeds hadno restrictive covenants. The wording of the covenants in theother deeds varied somewhat, but all included covenantsforbidding any principal building other than a residence costingmore than $5,000, and forbidding hog or mushroom farming.

Despite the restrictive covenants, owners eventuallydeveloped most of the 200-acre tract either with buildings otherthan residences, or with many separate residences on each lot. But the properties in the area south of 26th Street largelyabided by the covenants. All lots remained about five acres, andno property had more than one principal building, which was, inall cases, a single-family residence. In 1988 the owners of thelots on the southernmost 60 acres filed articles of incorporationfor the Hickory Lane Homeowners Association, to operate the"Hickory Lane residential community" for the common benefit ofits members, the owners of the properties. The communityconsisted of just the 12 lots in the 60-acre southern area.

Thirty-First Street is the southern boundary of the HickoryLane residential community. Across 31st Street lies a forestpreserve. On the west the residential community abuts a largevacant area operated as a landfill. An estate named Ashley Woodsforms the northern boundary. On the east, the community bordersthe Wolf Road Prairie, an 80-acre nature preserve that is one ofthe largest black-soil prairies in Illinois.

Late in the 1980s, the owners of Ashley Woods sought todevelop the property with a housing development. Plaintiff, anorganization with approximately 1,200 members, sued to preventthe development because of its potentially adverse impact on thenearby prairie. Plaintiff sought to enforce the restrictivecovenant in Bartlett's original deed for Ashley Woods. But plaintiff owned no property subject to the restrictive covenant,so it lacked standing to enforce the covenant. See WestgateTerrace Community Associates, Inc. v. Burger King Corp., 66 Ill.App. 3d 721, 726, 383 N.E.2d 1355 (1978). Accordingly, plaintiffabandoned that count of its suit and eventually settled the case. Under the settlement the owners of Ashley Woods agreed to buildin compliance with some constraints designed to reduce the impacton the prairie.

In 1991 plaintiff acquired an interest in a five-acre lot inthe Hickory Lane residential community. The lot is half of theparcel Bartlett & Co. deeded to Ferrari in November 1942.Defendant also purchased a five-acre lot in the southwest cornerof the Hickory Lane residential area. Defendant proposed adevelopment consisting of five buildings, including fourresidential buildings with 32 units in each building. In May2000 defendant obtained municipal approval for the proposal.

Plaintiff brought this suit to enforce the restrictivecovenant in the chain of title for defendant's property. Thecovenant provides:

"[T]he following restrictions *** shall each beconstrued as a covenant running with the land:

Except for outbuildings and auxiliary buildings,no building shall be erected, placed or maintained uponthe premises herein described unless it shall be asingle-family residence costing not less than $5,000***.

Said premises shall not be used for themaintenance, breeding or raising of hogs or goats orfor the growing or production of mushrooms."

Defendant admitted that it knew of the covenant when it acquiredthe property.

Constantine Xinos, a member of the Hickory Lane HomeownersAssociation, petitioned to intervene, alleging that the outcomeof the suit could affect his plan for developing his property. The court granted the petition. In answer to the complaint,Xinos claimed that the restrictive covenants were unenforceable.

Plaintiff moved for a preliminary injunction to prevent defendant from beginning development of the property prior todecision on plaintiff's suit to enforce the restrictive covenant. At the hearing on the motion, the superintendent of the ForestPreserve District of Cook County (the District) explained theDistrict's responsibility for the Wolf Road Prairie. Because thelargely undeveloped area of the Hickory Lane residentialcommunity provided a valuable buffer for the prairie, theDistrict preferred to see no new developments in that area. Whenthe District learned of a plan to build a school on one of theHickory Lane properties, the District participated in discussionsabout ways to minimize the damage the school would cause theprairie.

The trial court recounted uncontested evidence that Bartlett& Co. deeded plaintiff's property to Ferrari on the same day itdeeded the remainder of the 200-acre tract, including defendant'sparcel, to Bartlett himself as trustee for the "Fred'k H.Bartlett Realty Co. (not incorporated)." Because the deed to thetrust had no restrictive covenant, the court held that plaintiff's land lacked privity of estate withdefendant's land,and therefore plaintiff lacked standing to enforce therestrictive covenant.

The court also found multi-unit residences and commercialuses of property in the northern part of the 200-acre tract, andheld that violations of the restrictive covenants in the deedsfor those properties rendered the restrictive covenant in defendant's deed unenforceable. The court denied the motion fora preliminary injunction due to the likelihood that plaintiffwould not succeed on the merits.

Courts grant preliminary injunctions to preserve the statusquo in a controversy pending a decision on the merits. HeritageStandard Bank & Trust Co. v. Steel City National Bank, 234 Ill.App. 3d 48, 54, 599 N.E.2d 1283 (1992). To show that the courtshould grant the injunction, a plaintiff must show (1) she has aright in need of protection; (2) legal remedies will notadequately protect the right; (3) without the injunction, shewill suffer irreparable harm; and (4) if the proof sustains herallegations, she will likely succeed on the merits. HeritageStandard Bank, 234 Ill. App. 3d at 54-55. The trial court hasdiscretion to grant or deny the request, and we limit our reviewto determining whether the court abused that discretion. Schweikart v. Powers, 245 Ill. App. 3d 281, 288, 613 N.E.2d 403(1993). But the court abuses its discretion if it ignoresrecognized legal principles. State Farm Fire & Casualty Co. v.Leverton, 314 Ill. App. 3d 1080, 1083, 732 N.E.2d 1094 (2000).

In showing a right in need of protection, "[p]laintiffs onlyneed show they raised a 'fair question' about the existence oftheir right and that the court should preserve the status quountil the cause can be decided on the merits." Schweikart, 245 Ill. App. 3d at 290. Courts will enforce reasonable restrictivecovenants. Mertel v. Howard Johnson Co., 191 Ill. App. 3d 114,117, 547 N.E.2d 670 (1989). Owners of all similarly encumberedlots subject to the same general plan have the right to enforcesuch covenants. O'Neill v. Wolf, 338 Ill. 508, 514-15, 170 N.E.669 (1930).

The trial court here found that plaintiff had no right toenforcement of the covenant because plaintiff's property lackedprivity of estate with defendant's land. But a plaintiff neednot prove privity of estate for equitable enforcement of arestrictive covenant. Wiegman v. Kusel, 270 Ill. 520, 524, 110N.E. 884 (1915). Defendant concedes on appeal that covenantsremain enforceable in equity without privity of estate. Thetrial court here failed to apply recognized legal principles.

A plaintiff has an equitable right to enforce a restrictivecovenant on a defendant's property "when it can be shown,expressly or by fair implication from the circumstances, that therestriction or covenant is part of a general scheme or plan forthe mutual benefit of the owners of all lots in the particulartract." Wallace v. Hoffman, 336 Ill. App. 545, 548-49, 84 N.E.2d654 (1949). To determine whether a general scheme incorporatesthe restrictive covenant, courts

"consider whether (1) the restrictions are included inall deeds to the subdivision; (2) the restrictions havebeen previously violated; (3) the burdens imposed aregenerally equal and for the mutual benefit andadvantage of all lot owners; and (4) notice of therestrictions is given in the recorded plat ofsubdivision." Krueger v. Oberto, 309 Ill. App. 3d 358,370-71, 724 N.E.2d 21 (1999).

Defendant argues that the court must look to the entire 200-acre tract, and not to the Hickory Lane residential community, todetermine whether a general scheme supports enforcement of thecovenants. We disagree. In Wallace, which defendant cites insupport of its argument, the court said that "a general plan maybe found to exist even though there are violations *** ofrestrictions in the deeds to some of the lots in the areaaffected by the plan." Wallace, 336 Ill. App. At 552. Oursupreme court similarly adopted a holding that "acquiescence inviolations of building restrictions is not material where theyoccur on other streets than the one directly involved." O'Neill,338 Ill. at 523. Thus, even when owners throughout most of asubdivision have violated their restrictive covenants, a propertyowner may have the right to enforce a restrictive covenantagainst the owner of a nearby property.

In O'Neill, the plaintiff and the defendant owned homes onDover Street. A considerable business development, withbuildings that violated the restrictive covenants, arose withintheir subdivision, but the businesses were not "in the immediatevicinity" of the parties' homes. 338 Ill. at 526. The courtsaid:

"[W]here the property involved has so changed in itscharacter and environment and in the uses to which itmay be put as to make it unfit or unprofitable for useif the restriction be enforced, or where to grant therelief asked would be a great hardship on the owner andof no benefit to complainant, equity will refuse tointervene in complainant's behalf.

* * *

*** But the character and condition of theadjoining property must have been so changed as torender the building restriction inapplicable accordingto the intent and spirit of the contract." O'Neill,338 Ill. at 526-32.

Applying these principles, the court held:

"It is not shown here that the neighborhood is sochanged as to make it impossible to accomplish thepurpose intended by the restriction, nor have therebeen any changed conditions resulting from the factorssuggested and which render the property undesirable forthe residence purposes for which it was restricted." O'Neill, 338 Ill. at 531.

Accordingly, the court found the restrictive covenantenforceable. See also N.H. Engle & Sons, Inc. v. Laurich, 98Ill. App. 2d 18, 28-30, 240 N.E.2d 9 (1968).

Here, too, the extensive violation of the restrictivecovenants on other parts of the 200-acre tract had little effecton the character or condition of the land usage in the immediatevicinity of the parties' properties. The Hickory Laneresidential area, on largely undeveloped land, retained the kindof residential character Bartlett sought in imposing therestrictive covenant on all purchasers of the properties. UnderO'Neill the violations of restrictive covenants in the deeds forproperties outside of the Hickory Lane area did not suffice todefeat plaintiff's right to enforce the restrictive covenant. The court may look to the Hickory Lane area to decide whether acommon scheme supports the restrictive covenants.

The deeds for all properties in the Hickory Lane residentialcommunity include restrictive covenants similar to thosepertaining to the parties' properties. Each five-acre lot in thearea holds exactly one single-family home costing more than$5,000, and no one engages in hog or mushroom farming. Therestrictions on the property owners within the Hickory Lane areaappear to benefit and burden all property owners equally. Although all property owners have notice of the restrictions intheir deeds, the recorded plat of the area does not give noticeof the restrictions.

While the absence of notice in the recorded plat is a factorfor the court to consider, that factor alone is notdeterminative. Wallace, 336 Ill. App. at 553; LoBianco v. Clark,231 Ill. App. 3d 35, 38, 596 N.E.2d 56 (1992). Recording in theplat of a subdivision may establish constructive notice of arestriction (see Krueger, 309 Ill. App. 3d at 371), but here defendant admitted it had actual notice of the restrictivecovenant before it purchased the property.

We need not here decide whether plaintiff has the right toenforce the restrictive covenant. We hold only that plaintiffhas raised a fair question about the existence of such a right.

Next, we must consider whether plaintiff has an adequateremedy at law and whether plaintiff will suffer irreparable harmwithout the injunction. Plaintiff seeks to protect theresidences in the Hickory Lane residential community fromdevelopments that would greatly increase the population of thearea. The residential community also protects the borderingprairie land and its wildlife. Xinos, a second owner in thearea, intervened in this case as a defendant, indicating theresult here may affect his plan to develop his lot. Without defendant's development, only the northern boundary of theHickory Lane area abuts developed property. But defendant'sdevelopment on the southern end of the Hickory Lane area wouldsurround the area with high density developments, probablychanging the character of the area and encouraging further densedevelopments of the kind Xinos plans. No remedy at law canadequately protect plaintiff from the likely damage to thecharacter of the area.

Once the developments change the neighborhood and thehabitats for local wildlife, the law may be powerless to returnthe lands to their predevelopment condition. Here, as in ForestPreserve District v. Mount Greenwood Bank Land Trust 5-0899, 219 Ill. App. 3d 524, 529, 579 N.E.2d 1066 (1991), "Destruction ofthe flora, fauna and scenic beauty would be irreparable, andindeed, final." Plaintiff will suffer irreparable damage withoutthe injunction.

Next, we address the likelihood of success on the merits.

"There are exceptions to the necessity ofestablishing probable success on the merits, however. [Citations.] If the subject of the injunction isproperty which may be destroyed, or if, as here, theplaintiff seeks only to maintain the status quo untilthe ultimate issue is decided, the injunction isproperly allowed or maintained even where there may beserious doubt as to the ultimate success of thecomplaint." Blue Cross Ass'n v. 666 North Lake ShoreDrive Associates, 100 Ill. App. 3d 647, 650-51, 427N.E.2d 270 (1981).

Defendant contends that plaintiff is not likely to succeedon the merits because it waived the right to enforce the covenantwhen it settled its complaint against the Ashley Woodsdevelopment. But plaintiff owned no property in the 200-acretract when it sued Ashley Woods, and therefore it had no right toenforce the restrictive covenant. See Westgate Terrace, 66 Ill.App. 3d 721. Since it purchased its property in the Hickory Laneresidential community, plaintiff has consistently soughtenforcement of the restrictive covenants.

Plaintiff purchased a lot that was a subdivided part of theten-acre lot Bartlett & Co. deeded to Ferrari in 1942. The deedincluded the same restriction Bartlett later imposed on five-acrelots in the neighborhood. The owner subdivided the ten-acreproperty and permitted construction of a second residence on thenew five-acre lot, apparently in violation of the restrictivecovenant. But the technical violation of a restrictive covenantwill not always render the covenant unenforceable. O'Neill, 338Ill. at 522. If a plaintiff's violation of a covenant does notappreciably conflict with the general plan for the area and thepurpose of the restriction, the plaintiff may still obtain reliefagainst a party who threatens to abrogate the general plan morecompletely. O'Neill, 338 Ill. at 522. The technical violationhere left each five-acre lot in the Hickory Lane area with onesingle-family home on largely undeveloped land. The violationhere does not undermine plaintiff's right to enforce thecovenant.

Defendant also contends that the character of theneighborhood has already changed so much that plaintiff is notlikely to convince a court to enforce the covenant.

"A change in a neighborhood such as will preventenforcement of a restrictive covenant must be soradical and complete as to destroy the purposes forwhich the restriction was imposed and to render therestriction unreasonable, confiscatory anddiscriminatory. The burden of proving such a change inthe neighborhood is on the party attacking therestrictive covenant." Hanna v. American National Bank& Trust Co., 266 Ill. App. 3d 544, 557, 639 N.E.2d 1326(1994).

See also Paquette v. Coble, 271 Ill. App. 3d 1110, 1115, 653N.E.2d 1262 (1995). Defendant has not met that burden here. Wecannot say that the character of the Hickory Lane residentialcommunity has changed so radically that enforcing the covenantswill no longer achieve the purposes for which the grantorsimposed the covenants. See Hanna, 266 Ill. App. 3d at 554.

Finally, the court should weigh the balance of the harmsfrom granting or denying the preliminary injunction. HeritageStandard Bank, 234 Ill. App. 3d at 55. Without the injunction,the development will likely alter the character of theneighborhood irrevocably, even if the court later decides infavor of plaintiff on the merits. If the court issues thepreliminary injunction, defendant will be unable to develop theproperty, thereby preventing defendant from earning the profitsought from the property. But if the court decides in favor of defendant on the merits, the only harm from the injunction willbe a delay in realizing the earnings. On balance, plaintiff'sinterests stand in greater need of protection pending thedecision on the merits.

Plaintiff raised a fair question of a right, in need ofprotection, to enforcement of the restrictive covenant. Legalremedies cannot adequately protect the right, which could sufferirreparable harm without the injunction. And plaintiff showed asufficient possibility of success to warrant maintenance of thestatus quo pending trial on the merits. The trial courterroneously assumed that plaintiff could not enforce therestrictive covenant absent privity of estate. We find that thetrial court abused its discretion by denying the motion for apreliminary injunction. Accordingly, the decision of the courtis reversed and the cause is remanded for the entry of apreliminary injunction prohibiting further development pendingtrial on the merits of plaintiff's claim.

Reversed and remanded.

TULLY and COHEN, JJ., concur.