Department of Transportation v. Hunziker

Case Date: 07/30/2003
Court: 3rd District Appellate
Docket No: 3-02-0525 Rel

No. 3--02--0525
(Consolidated with 3--02--0553)


IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2003

 
THE DEPARTMENT OF TRANSPORTATION, ) Appeal from the Circuit Court
for and in behalf of THE PEOPLE OF THE ) of the 10th Judicial Circuit
STATE OF ILLINOIS, ) Peoria County, Illinois,
)
                    Plaintiff-Appellee, )
)
                    vs. ) No. 02--ED--19
)
DALE K. HUNZIKER, as Trustee of the Barbara )
J. Hunziker Family Trust Dated October 10, 1999, )
)
                   Defendant-Appellant, )
)
                   and )
)
MELINDA WOSKOW MAYANI, as Trustee of )
the Melinda Mayani Trust, established under the )
Last will and Testament of Ann Woskow dated )
April 9, 2001; BURGER KING CORPORATION, )
a Florida Corporation; JOHN DRURY; CHARLES )
R. McLOCHLIN; NORBERT J. LUKAS; )
RICHARD O. DEIGNAN; ROBERT DEIGNAN; )
FREDRICK W. KAUFMAN; ROBERT S. )
COHEN; FIRST AMERICAN BANK, f/k/a )
COMMERCIAL NATIONAL BANK as )
Trustee of Trust No. 130-01908002, as )
Trustee of Trust No. 66-7792-0 and as Trustee )
of Trust No. 66-8033, n/k/a NATIONAL CITY, )
a Banking Corporation; TPC-CHI, INC., f/k/a )
CHART HOUSE, INC., a Delaware Corporation; )
TALMAN HOME FEDERAL SAVINGS AND )
LOAN ASSOCIATION OF ILLINOIS, n/k/a  )
LASALLE BANK, N.A., a National Banking  )
Association; EDWARD T. O'CONNOR, Peoria )
County Treasurer; and UNKNOWN OWNERS )
AND NON-RECORD CLAIMANTS, ) Honorable
) Stuart P. Borden,
                 Defendants. ) Judge Presiding
)
                 Consolidated with: )
)
THE DEPARTMENT OF TRANSPORTATION, )
for and in behalf of THE PEOPLE OF THE )
STATE OF ILLINOIS, )
)
                 Plaintiff-Appellee, )
)
                 vs. ) No. 02--ED--20
)
DALE K. HUNZIKER, as Trustee of the Barbara )
J. Hunziker Family Trust Dated October 10, 1999, )
)
                 Defendant-Appellant, )
)
                 and )
)
A.A. GREEN, Trustee under Trust No. 66-7792-0; )
DENNY'S, INC., a California Corporation; )
CENTRAL DINING, INC., an Illinois Corporation; )
MELINDA WOSKOW MAYANI, as Trustee of )
the Melinda Mayani Trust, established under the )
Last will and Testament of Ann Woskow dated  )
April 9, 2001; BURGER KING CORPORATION, )
a Florida Corporation; JOHN DRURY; CHARLES )
R. McLOCHLIN; NORBERT J. LUKAS; )
RICHARD O. DEIGNAN; ROBERT DEIGNAN; )
FREDRICK W. KAUFMAN; ROBERT S. )
COHEN; FIRST AMERICAN BANK, f/k/a )
COMMERCIAL NATIONAL BANK as )
Trustee of Trust No. 130-01908002, as )
Trustee of Trust No. 66-7792-0 and as Trustee )
of Trust No. 66-8033, n/k/a NATIONAL CITY, )
a Banking Corporation; TPC-CHI, INC., f/k/a )
CHART HOUSE, INC., a Delaware Corporation; )
TALMAN HOME FEDERAL SAVINGS AND )
LOAN ASSOCIATION OF ILLINOIS, n/k/a )
LASALLE BANK, N.A., a National Banking )
Association; EDWARD T. O'CONNOR, Peoria )
County Treasurer; PROFESSIONAL REALTY )
SERVICES, LTD.; SOUTH SIDE TRUST & )
SAVINGS BANK OF PEORIA, a Banking  )
Corporation; and UNKNOWN OWNERS AND )
NON-RECORD CLAIMANTS, ) Honorable
) Joe R. Vespa,
                      Defendants. ) Judge Presiding.

JUSTICE SLATER delivered the opinion of the court:


Plaintiff Department of Transportation (the Department)filed complaints for condemnation of two contiguous parcels ofproperty (the property) owned by defendant Dale Hunziker. Theother defendants also have an ownership or other interest in theproperty. Hunziker filed a traverse and motion to dismiss eachcomplaint which the trial courts denied. On appeal Hunzikercontends that the Department was required to disclose theappraisal reports which it used to determine the amount ofcompensation offered for the property. We agree.

Facts

In February of 2002 the Department notified Hunziker thatits plans to widen Interstate 74 made it necessary to acquire hisproperty. A separate letter was sent for each parcel. Theletters set forth the amount of compensation that had beenestablished by the Department and included a document entitled"Basis for Computing Total Approved Compensation and Offer toPurchase" (the basis document). Because the informationcontained in the basis document is critical to our resolution ofthis case, the relevant parts of one of those documents is setforth below:

"1. Existing Property:

Total area 31, 467 square feet, more or less.

Highest and best use as appraised, Fast food restaurant

 

2. Land to be Acquired as Permanent Right of Way:

Estate or interest to be acquired fee simple.

additional right of way 1,443 square feet

Existing right of way (when applicable) 0 square feet

Total right of way 1,443 square feet

3. Improvements and/or Fixtures to be Acquired:

Removal of a portion of the asphalt paving, concrete curbing, andlandscaping, along with removal of two parking lot light fixtures mountedon light poles with concrete bases, an on-premise advertising sign, andelimination of 12 parking spaces.

4. Compensation for Permanent Right of Way:

Fair market value of the 1,443 square feet to be acquired including allimprovements as part of the whole property, based on an analysis ofmarket data in the vicinity of the acquisition. $35,000.00

Damage to the remaining property as a result of the acquisition

(Relocation of sign, loss of parking) $35,000.00

Total compensation for permanent right of way $70,000.00

Less cost of construction to be offset against total compensation $ 0.00

Net Compensation $70,000.00

Benefits in the amount of $ NONE have been estimated to the remainingproperty. These benefits have been offset against any possible damagesbut have not been offset against any part of the compensation for the partacquired.

5. Compensation for the Removal of Signs Located on the Proposed Right ofWay:

A description of the sign to be removed by the owners $ 0

Total compensation for sign removal $ 0

6. Compensation for Temporary Construction Easements:

Parcel No. 415PO23TE -- 355 square feet $ 2,000.00 for grading, shaping, and sidewalk construction Parcel No. $ 0

Total compensation for easements $ 2,000.00

7. Total Compensation for Entire Acquisition, which includes all interests in the land required for thehighway improvement ad damages to the remainder, if any. (sum of 4+5+6) $ 72,000.00"

In response to the Department's offers, Hunziker requestedcopies of the appraisal reports on which the offers had beenbased. The department refused, stating that it was its policynot to release appraisals except in response to an appropriatediscovery request. On May 9, 2002, the Department filed itscomplaints for condemnation, along with motions for immediatevesting of title under the "quick-take" provisions of the EminentDomain Act (the Act). See 735 ILCS 5/7--103 (West 2002). Hunziker filed a traverse and motion to dismiss each case, alongwith a motion for expedited discovery. The discovery motion wasgranted and plaintiff thereafter furnished Hunziker with theappraisal reports for the property. Following a hearing on June12, 2002, Hunziker's traverses and motions to dismiss weredenied. In each case the trial judge found that plaintiff was notrequired to furnish Hunziker with copies of its appraisals duringnegotiations, although one judge noted his belief thatplaintiff's actions "smack[ed] of arrogance" and were contrary tothe spirit of sections 7--102 and 7--102.1 of the Act. 735 ILCS5/7--102, 7--102.1 (West 2002). Hunziker now appeals, and wereverse.

Analysis

Jurisdiction

The Department has raised the issue of this court'sjurisdiction over this appeal in light of Southwestern IllinoisDevelopment Authority v. National City Environmental, L.L.C., 304Ill. App. 3d 542, 710 N.E.2d 896 (1999), aff'd, 199 Ill. 2d 225,768 N.E.2d 1 (2002). In Southwestern the fifth districtappellate court held that the issue of whether the condemningauthority had made a good faith attempt to negotiate could not beconsidered in an interlocutory appeal brought pursuant to SupremeCourt Rule 307(a)(7) (166 Ill. 2d R. 307(a)(7)) and section 7--104(b) of the Act (735 ILCS 5/7--104(b) (West 2002)). Southwestern relied on Southwestern Illinois DevelopmentAuthority v. Vollman, 235 Ill. App. 3d 32, 600 N.E.2d 926 (1992),which held that an interlocutory appeal pursuant to section 7--104 of the Act was limited to the three issues delineated insubsection 7--104(b), which states in part:

"(b) At the [quick-take] hearing, ifthe court has not previously, in the sameproceeding, determined [1] that the plaintiffhas authority to exercise the right ofeminent domain, [2] that the property soughtto be taken is subject to the exercise ofsuch right, and [3] that such right is notbeing improperly exercised in the particularproceeding, then the court shall first hearand determine such matters. The court'sorder thereon is appealable, and an appealmay be taken therefrom by either party within30 days after the entry of such order, butnot thereafter[.]" 735 ILCS 5/7--104(b)(West 2002).

We believe that the Southwestern court construed subsection7--104(b) too narrowly. One of the findings that is expresslyappealable is whether the right of eminent domain is "beingimproperly exercised in the particular proceeding." 735 ILCS5/7--104(b) (West 2002). Since good faith negotiation by thecondemnor is a condition precedent to exercising that right (seeDepartment of Transportation v. 151 Interstate Road Corp., 333Ill. App. 3d 821, 777 N.E.2d 369 (2002), appeal allowed, 202 Ill.2d 669, 787 N.E.2d 172 (2003) and cases cited therein), review ofthe good faith issue is proper as part of the larger issue of thepropriety of exercising the power of eminent domain. 151Interstate, 333 Ill. App. 3d 821, 777 N.E.2d 369. In the samemanner, the question of whether the Department must disclose itsappraisal reports is appealable because of its relationship tothe issue of good faith negotiations. We find no jurisdictionalimpediment to this appeal.

Standard of Review

Generally, a trial court's ruling on a traverse and motionto dismiss is subject to a manifest weight standard of review. See, e.g., 151 Interstate, 333 Ill. App. 3d 821, 777 N.E.2d 369;City of Naperville v. Old Second National Bank, 327 Ill. App. 3d734, 763 N.E.2d 951 (2002). More particularly, the manifestweight standard has been applied to a trial court's finding thatthe condemnor acted in good faith. See 151 Interstate, 333 Ill.App. 3d at 834, 777 N.E.2d at 381. However, while this caseinvolves the question of good faith negotiations by theDepartment, it does not involve a factual dispute. The soleissue is whether the Department is required, as part of itsobligation to negotiate in good faith, to disclose its appraisalreports to property owners. The resolution of that issuerequires interpreting section 7--102.1 of the Act. Statutoryinterpretation is a question of law (Branson v. Department ofRevenue, 168 Ill. 2d 247, 659 N.E.2d 961 (1995)), and questionsof law are reviewed de novo (151 Interstate, 333 Ill. App. 3d at833, 777 N.E.2d at 380).

We now consider the substantive issue presented by thiscase: Must the Department, as part of its duty to negotiate ingood faith, disclose the appraisal reports it uses in determiningthe amount of compensation offered to a property owner? Webelieve that it must.

Section 7--102 of the Act enables a public body to initiatecondemnation proceedings when "the compensation to be paid for orin respect of the property to be appropriated *** cannot beagreed upon by the parties." 735 ILCS 5/7--102 (West 2002). "Thus, the attempt to reach an agreement with a property owner isa condition precedent to the exercise of the power of eminentdomain." 151 Interstate, 333 Ill. App. 3d at 834, 777 N.E.2d at380; see also City of Naperville, 327 Ill. App. 3d 734, 763N.E.2d 951; Department of Transportation v. Brownfield, 221 Ill.App. 3d 565, 582 N.E.2d 209 (1991); Department of Transportationv. Walker, 80 Ill. App. 3d 1039, 400 N.E.2d 956 (1980). Theattempt to agree must be made in good faith. 151 Interstate, 333Ill. App. 3d 821, 777 N.E.2d 369; City of Naperville, 327 Ill.App. 3d 734, 763 N.E.2d 951.

Of course, a good faith attempt to agree may arguably takemany forms. For example, in County Board of School Trustees v.Boram, 26 Ill. 2d 167, 170, 186 N.E.2d 275, 277-78, (1962), oursupreme court held that an attempt to agree does not necessarilyrequire the condemnor to make an offer for the property:

"The statute does not require an offerbut only requires that before exercising theright of eminent domain the authorities shallfirst attempt to agree on the amount ofcompensation. The making or not making of anoffer is an important factor in determiningwhether a bona fide attempt to agree had beenmade, but an offer is not necessary where, ashere, it is clear from the acts of theparties that it would be futile."

Boram was decided, however, long before the legislaturecodified the duties imposed on a State agency prior to initiatingcondemnation proceedings. Effective January 1, 1992, section 7--102.1 provides in part:

"(d) At least 60 days before filing apetition with any court to initiate aproceeding under this Article, a State agencyshall send a letter by certified mail, returnreceipt requested, to the owner of theproperty to be taken, giving the propertyowner the following information:

(1) The amount ofcompensation for the taking of theproperty proposed by the agency, and the basis for computing it.

(2) A statement that theagency continues to seek anegotiated agreement with theproperty owner.

(3) A statement that in theabsence of a negotiated agreementit is the intention fo the agencyto initiate a court proceedingunder this Article." (Emphasisadded). 735 ILCS 5/7--102.1(d)(West 2002).

As the language emphasized above indicates, the Departmentis required to not only make an offer, but it must also providethe property owner with "the basis for computing" the offer. TheDepartment argues that the "basis documents" it provided toHunziker satisfied its statutory obligation and therefore it didnot have to provide the underlying appraisals. We disagree.

The basis document provides the following information: (1)the square footage of the entire property and a determination ofits highest and best use; (2) the square footage of the land tobe acquired and a description of any improvements or fixtures;and (3) the amount of compensation, broken down into variouscomponents such as value of the property, damage to theremainder, and the value of easements. While the Department iscorrect in asserting that a property owner could use thisinformation to compute the price per square foot of the offer(e.g., $35,000 divided by 1,443 square feet equals $24.255 persquare foot), what is missing is how that price was determined. Section 7--102.1(d)(1) requires the Department to provide thebasis for computing the amount of compensation. The term "basis"is defined as the "[f]undamental principle; groundwork; support;the foundation or groundwork of anything[.]" It has also beendefined as "the principle component parts of a thing." Black'sLaw Dictionary 151 (6th ed. 1990). The latter definition isfairly descriptive of the basis document, while the formerdefinitions are, we believe, more akin to what an appraisal wouldprovide. Which definition should we adopt? We find thatestablished principles of statutory construction, as well assound public policy considerations, compel us to hold thatsection 7--102.1(d)(1) requires the Department to provide aproperty owner with an appraisal where one has been performed.

Statutes authorizing the taking of property through eminentdomain are in derogation of individual rights (Village ofBolingbrook v. Citizens Utilities Co., 267 Ill. App. 3d 358, 642N.E.2d 182 (1994)) and must be strictly construed to protect therights of property owners (Village of Cary v. Trout Valley Ass'n,282 Ill. App. 3d 165, 667 N.E.2d 1082 (1996)). See also Villageof Round Lake v. Amann, 311 Ill. App. 3d 705, 723 N.E.2d 35(2000). Construing the term "basis" to include an appraisalwhere one has been performed protects the rights of propertyowners by providing full access to the information underlying theDepartment's compensation offer.

In addition, the primary rule of statutory construction isto ascertain and give effect to the intent of the legislature. In determining that intent, courts must read the statute as awhole, giving consideration to all relevant parts. Village ofCary, 282 Ill. App. 3d 165, 667 N.E.2d 1082. A review of theprovisions of the Eminent Domain Act leads us to conclude thatthe Act "evidences a clear public policy to encourage voluntary

acquisitions of property and to discourage forced appropriationsthrough the exercise of the right of eminent domain." PatrickMedia Group, Inc. v. DuPage Water Comm'n, 258 Ill. App. 3d 1068,1076, 630 N.E.2d 958, 964 (1994). In our opinion, section 7--102.1 is intended to further that policy and our interpretationis consistent with that aim. As Hunziker points out, withholdingthe appraisals left him with no basis to negotiate and forced himto either obtain his own appraisal or litigate the condemnationcase. Forcing a property owner to make such a choice doesnothing to encourage voluntary acquisition. On the contrary, theDepartment's policy would likely increase the volume ofcondemnation litigation because, as Hunziker notes, an offer topay compensation coupled with a refusal to disclose the appraisalon which the offer is based implies that the condemnor isattempting to acquire the property for less than fair marketvalue. This practice invites litigation which, assuming thecondemnor has offered the appraised value, is wholly unnecessaryand avoidable.

Finally, requiring the Department to disclose its appraisalreports helps to level the playing field between the condemnorand the property owner. As the court noted in City ofNaperville:

"The negotiations that precede acondemnation proceeding cannot be viewed inthe same manner as negotiations between aprivate buyer and seller. In a privatenegotiation, either party can walk away fromthe negotiation if the price is not right. However, in a condemnation proceeding, theproperty owner does not have the same luxury. If the property owner cannot agree tocompensation with the condemning authority,he will incur the cost and expense ofdefending against a condemnation proceedingin order to secure the payment of the fairmarket value of the property. It is for thisreason that the condemning authority mustmake a good faith effort to negotiate priorto filing suit." 327 Ill. App. 3d at 740-41,763 N.E.2d at 956.

Requiring appraisal disclosure as part of that good faitheffort enables the property owner to assess the reasonableness ofthe Department's offer without incurring the expense of hiringhis own appraiser. This increases the likelihood of an amicableagreement between the parties. Nondisclosure, on the other hand,forces the property owner to either hire an appraiser andlitigate the condemnation case, or blindly accept the offer.

The Department argues that the property owner does notbenefit from disclosure of the Department's appraisal becausemost citizens, lacking the knowledge or expertise to value realestate, will still have to hire their own appraiser to evaluatethe Department's offer. We disagree. Many adults have gained atleast some familiarity with appraisal reports when obtaining amortgage, a not uncommon occurrence. While appraisals can becomplex, the frequently employed method of using comparableproperties to ascertain value is not highly technical and canprovide useful information even to the unsophisticated propertyowner. In any event, even if only a few property owners decideto accept the Department's offer because they have reviewed anappraisal report, those few have been spared the cost andinconvenience of litigation, as has the Department. Indeed, theDepartment has offered only two reasons to justify its policy ofnondisclosure. The first, additional administrative costs, seemsfairly insignificant in view of the fact that the Department isalready required to send property owners a "60 day letter" priorto filing a condemnation action. See 735 ILCS 5/7--102.1(d)(West 2002). The second justification offered by the Departmentfor refusing to disclose its appraisal reports is that theEminent Domain Act does not require it. On the contrary, as wehave explained, section 7--102.1(d)(1) mandates disclosure of thebasis for computing the amount of the Department's offer, whichincludes an appraisal where one has been prepared. Accordingly,because the Department refused to disclose the appraisal reportsto Hunziker prior to filing its condemnation actions, theDepartment failed to negotiate in good faith, and Hunziker'straverses and motions to dismiss should have been granted.

For the reasons stated above, the judgments of the circuitcourt are reversed. We remand these causes with directions tothe trial courts to vacate the orders finding preliminary justcompensation and vesting title in the Department. The courts mayalso consider the issue of defendant's fees and costs as providedin the Act.

Reversed and remanded with directions.

McDADE, P.J., concurs.

JUSTICE LYTTON, dissenting:

Under the Eminent Domain Act (735 ILCS 5/7-101 et seq.) (Act),a condemning party must first negotiate in good faith with acondemnee in an attempt to settle the case prior to initiatingcourt action. 735 ILCS 5/7-102 (West 2003). Section 102.1 of theAct places additional negotiating responsibilities on stateagencies, such as the plaintiff Department of Transportation (DOT). Among other things, state agencies must send a certified lettergiving the property owners the "basis" for computing thecompensation offered. 735 ILCS 5/7-102.1(d)(1).

The majority labors over a definition of "basis," picks onethat suits it, and decides that "basis" means "appraisal." Although I will address this definitional wrangling in Section II,I believe that it sidesteps the critical approach to the issue.

I.

We must examine statutory language as it is. See People v.Pullen, 192 Ill. 2d 36 (2000). We do not need to apply rules ofconstruction or dictionary definitions here. None are needed. This court should not read exceptions, limitations or conditionsinto an unambiguous statute. Certain Taxpayers v. Sheehen, 45 Ill.2d 75 (1970). The statute does not require a letter enclosing anappraisal; it requires the letter to give the property owner thebasis for the compensation. A "basis" is simply that ... a basis. "Basis" is not "appraisal."

The leading case on this issue is Wise v. United States, etal., 369 F. Supp. 30 (W. D. Ky 1973). In Wise, the court analyzedthe language of section 4651 of the federal Uniform RelocationAssistance and Real Property Acquisition Policies Act of 1970 (42U.S.C. 4651), which requires that "The head of the Federal agency... shall provide the owner of real property to be acquired with awritten statement of, and summary of the basis for, the amount heestablished as just compensation."

Like the defendant in this case, the plaintiff in Wise arguedthat the word "basis" really means "appraisal." The courtdismissed Wise's argument, saying that the statute was clear:"[t]he plain wording of the statutes above is persuasive that theCorps of Engineers is not required to furnish to the real estateowner a full appraisal report. It is, however, required to furnisha written statement of the basis for the amount established of justcompensation and a summary of that basis." (emphasis added) Wise, 369 F. Supp. at 32. "The language of 42 USC