Falcon Funding v. City of Elgin

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State: Illinois

Court: 2nd District Appellate

Docket No: 2-09-0367 Rel

Case Date: 03/11/2010

Preview:No. 2-09-0367

Filed: 3-11-10

IN THE APPELLATE COURT OF ILLINOIS SECOND DISTRICT

FALCON FUNDING, LLC, Petitioner-Appellee, v. THE CITY OF ELGIN, Respondent-Appellant.

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Appeal from the Circuit Court of Kane County.

No. 06--MC--4 Honorable Michael J. Colwell, Judge, Presiding.

JUSTICE JORGENSEN delivered the opinion of the court: Respondent, the City of Elgin (City), appeals from the trial court's order granting summary judgment to petitioner, Falcon Funding, LLC, denying summary judgment to the City, and disconnecting certain property from the City's corporate limits. We affirm. I. BACKGROUND On November 6, 1991, petitioner1 and the City entered into an annexation agreement to

1

In the annexation agreement, the party referred to as the owner of the subject property is The

Northern Trust Company as trustee under the provisions of a trust agreement dated November 8, 1955, known as trust No. 22974. Subsequently, Galvin Family Partners, L.P., petitioned the trial court to disconnect the property. On August 18, 2008, in light of Falcon Funding, LLC's, purchase of the property, the trial court granted Galvin's motion to substitute Falcon as petitioner in this action. For simplicity, we refer to the property's record owner as petitioner.

No. 2--09--0367 annex 36.12 acres2 of real property (with parcel identification number 03--19--400--019) to the City. The annexation agreement provided that, as the property's owner, petitioner intended to develop the property, which is located at the southwest corner of Randall Road and Route 72, and further contained guidelines for the provision of sewer and water services to the property. The agreement provided that the City would pass an ordinance classifying the property as a B-3 Service Business District, but that farming would continue to be permitted on the land as a legal, nonconforming use. Plaintiff agreed to pay certain development and impact fees, to share the cost of water mains, and to pay for extensions of the sewer and any tap-on fees. The property was never developed, and the annexation agreement expired on November 5, 2001. On July 27, 2006, petitioner petitioned the trial court, pursuant to section 7--3--6 of the Illinois Municipal Code (Code) (65 ILCS 5/7--3--6 (West 2006)), to disconnect the subject property from the City. Petitioner alleged that the annexation agreement expired in November 2001 and that the property was never developed. Petitioner further alleged that: (1) the tract generated real estate tax revenues of $3,026 for the City, was vacant, and had been used for agricultural purposes both before and after annexation; (2) the tract is located on the border of the City's corporate limits; (3) disconnection from the City would not result in the isolation of any part of the City from the remainder of the City; (4) disconnection would not substantially disrupt any existing municipal service facilities or unreasonably disrupt the City's growth prospects and plan and zoning ordinances; and (5) disconnection would not unduly harm the City through the loss of future tax revenue. Petitioner attached to its petition a legal description of the property, real estate tax information, and data

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In petitioner's statement of facts filed in support of its summary judgment motion, it asserted

that the property consists of 37.0558 acres. -2-

No. 2--09--0367 reflecting that the City's 2006 budget exceeded $70 million each in revenues and expenditures. In its answer, the City admitted all of the allegations in petitioner's petition, except that it: (1) denied that disconnection of the property would not result in the isolation of any part of the City from the remainder of the City; (2) denied that fire protection is provided by the Rutland-Dundee Fire Protection District; and (3) demanded strict proof of ownership, of the legal description, of the real estate tax revenue the property generates for the City, and that the property is located on the border of the City's corporate limits for about 1,259.22 feet. The City also raised two affirmative defenses. In its first affirmative defense, the City alleged that the annexation agreement required the City to construct, for petitioner's and the property's benefit and without cost to petitioner, certain sanitary sewer and water system improvements; that it did so at a cost exceeding $8 million; that petitioner accepted all of the benefits under the agreement; that the City had not denied approval for any development of the property; and that petitioner was not entitled to disconnection under section 7--3-6 of the Code. In what it labeled as its second affirmative defense, the City re-alleged the foregoing and further asserted that the equitable estoppel doctrine barred disconnection. Accordingly, the City requested that the petition be dismissed with prejudice and that the City be awarded costs. Petitioner moved to strike the City's affirmative defenses, arguing that estoppel could not be raised as a defense to defeat a disconnection petition and that the fact that petitioner may have received benefits from the City while the property was located within its limits is not a defense to and does not bar disconnection. On January 3, 2007, the trial court denied petitioner's motion. On June 25, 2008, petitioner moved for summary judgment, arguing that there were no genuine issues of material fact because the six requirements enumerated in section 7--3--6 were satisfied and because equitable estoppel is not a valid basis for denying a disconnection petition.

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No. 2--09--0367 In response, the City filed: (1) a cross-motion for summary judgment; and (2) a memorandum of law in response to petitioner's summary judgment motion and in support of its cross-motion. In its cross-motion, the City argued that it was entitled to summary judgment because petitioner had not established compliance with one of the six enumerated statutory requirements, specifically, the isolation requirement, and because equitable estoppel principles precluded a showing that petitioner was otherwise entitled to disconnection. The City attached to its motion the affidavit of its engineer, who averred that he is familiar with the subject property and the parties' annexation agreement and that the City spent about $9 million to construct the water and sanitary system improvements referenced in the agreement. The City also attached to its motion the affidavit of its "GIS" planner and two maps he prepared depicting the subject area predisconnection and postdisconnection. In its memorandum, the City argued that disconnection of petitioner's property would result in the isolation of land within its corporate limits,3 noting that Route 72 and Randall Road border the property on the north and east sides and are within the City's corporate limits and will remain so in the case of disconnection, as allegedly reflected in the maps attached to petitioner's motion. In the City's view, disconnection would result in two strips of land projecting east and north from the City and meeting at a right angle. Alternatively, the City asserted its estoppel affirmative defense, arguing that petitioner voluntarily entered into the annexation agreement with the City and induced the City

3

Maps submitted by both parties reflect that the southwest quadrant of the intersection of

Randall Road and Route 72, including the subject property and the portions of Randall Road and Route 72 that border the subject property, is within the City's corporate limits. By this court's reading of the maps, disconnection would result in the creation of a hole near the northern edge of the municipality's corporate limits. -4-

No. 2--09--0367 to provide improvements. In the City's view, the statute permitted it to raise this affirmative defense to defeat the disconnection petition. On March 4, 2009, the trial court granted petitioner's motion for summary judgment and denied the City's cross-motion for summary judgment. On March 11, 2009, the court entered an order to that effect and ordered the subject property thereby disconnected from the City. The City appeals. II. STANDARD OF REVIEW We review de novo a ruling on a summary judgment motion. Ioerger v. Halverson Construction Co., 232 Ill. 2d 196, 201 (2008). Summary judgment is appropriate only when the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. 735 ILCS 5/2--1005(c) (West 2008); Ioerger, 232 Ill. 2d at 201. In deciding a motion for summary judgment, the court may draw inferences from undisputed facts to determine whether a genuine issue of material fact exists. Loyola Academy v. S & S Roof Maintenance, Inc., 146 Ill. 2d 263, 272 (1992). However, where reasonable persons could draw divergent inferences from undisputed facts, the issue should be decided by a trier of fact and the motion for summary judgment should be denied; the trial court does not have discretion to decide the matter on summary judgment. Loyola, 146 Ill. 2d at 272. Where parties file cross-motions for summary judgment, they invite the court to decide the issues as questions of law, and entry of summary judgment for one party or the other may be proper. Giannetti v. Angiuli, 263 Ill. App. 3d 305, 312 (1994). However, even where parties file crossmotions for summary judgment, the court is not obligated to grant summary judgment. Kellner v.

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No. 2--09--0367 Bartman, 250 Ill. App. 3d 1030, 1033 (1993). It is possible that neither party alleged facts, even if undisputed, that were sufficient to warrant judgment as a matter of law or to preclude a genuine issue of material fact, despite the parties' invitation to the court to decide the issues as legal questions. 735 ILCS 5/2--1005 (West 2008); Giannetti, 263 Ill. App. 3d at 312. III. ANALYSIS On appeal, the City does not challenge the trial court's findings concerning the six enumerated statutory requirements for disconnection. It challenges only the court's rejection of its equitable estoppel defense, which the court did in the context of finding that the subject property was otherwise "entitled to disconnection." A. General Disconnection Law The petitioners in disconnection cases have the burden of proving the statutory requirements. In re Petition to Disconnect Certain Territory from the Village of Campton Hills, Kane County, Illinois, 386 Ill. App. 3d 355, 361 (2008). Regardless of the petitioners' purpose, the disconnection statute is liberally construed in favor of disconnection. Campton Hills, 386 Ill. App. 3d at 361; see also Harris Trust & Savings Bank v. Village of Barrington Hills, 133 Ill. 2d 146, 154-55 (1989). "The common theme is to allow disconnection absent a hardship or impairment to the municipality." Campton Hills, 386 Ill. App. 3d at 361. The purpose of the disconnection statute is to allow property owners to avoid the burdens of municipal taxation and regulation by disconnecting property that is not being used for municipal purposes. LaSalle Bank National Ass'n v. Village of Bull Valley, 355 Ill. App. 3d 629, 638 (2005). The disconnection statute at issue here,4 which is section 7--3--6 of the Code and is entitled

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The two other methods by which property owners may have their property disconnected -6-

No. 2--09--0367 "Land disconnected by court procedure," provides, in relevant part: "

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