Legal case studies in this issue:

• No commission due to broker on 2017 sale after discussions broke off in 2014
• Owner whose roof encroached over common wall was not required to remove it
• Inverse condemnation suit against village airport allowed to continue
• Large lot owner unable to develop property at highest and best use
• Legal description in final annexation cannot be corrected after one year

Research and analysis by Lisa Harms Hartzler,
Sorling Northrup Attorneys

No commission due to broker on 2017 sale after discussions broke off in 2014.

In Maly Commercial Realty, Inc. v. Maher, 582 S.W.3d 905 (Ct. App. Mo. 2019), Thakkar, a local businessperson who owned Dunkin’ Donuts franchises, was looking for property on the north side of Columbia, Missouri, to build a new store. He asked plaintiff, a licensed real estate broker, about property referred to as the “Blue Ridge Property,” which was owned by an LLC. Defendant was a member of the LLC and also a licensed real estate broker with a listing agreement for the Blue Ridge Property.

Plaintiff arranged for Thakkar to meet the defendant at the end of November 2014. The meeting was short because it soon became clear that the LLC was only interested in ground leasing the property to a big box store, not selling any part of it. There were some later emails indicating that defendant had not completely cut off a sale, as he wrote to Thakkar that “no price for sale” had been set and that he would “look at any possibility.”  Nevertheless, by mid-December it was clear that the LLC was just not interested in selling any portion of the property. Plaintiff had no further involvement with the Blue Ridge Property from that point through 2015 and 2016.

However, Thakkar casually ran into another member of the LLC in 2016, who suggested Thakkar check out the Blue Ridge Property. Thakkar “reintroduced” himself to the defendant and finally agreed in January 2017 on a price for the sale of one acre, signed a contract in March, and closed on the sale in September. Defendant received a six percent commission. Plaintiff filled a petition against defendant and the LLC, asserting that he was the procuring cause of the sale and claimed one-half of the commission under a theory of quantum meruit.

To recover a real estate commission under quantum meruit, the plaintiff has the burden to prove he provided brokerage services to the seller, the seller accepted the services, and the plaintiff was the procuring cause of the sale. “Procuring cause of the sale” means that the broker’s initial efforts in calling the prospective purchaser’s attention to the property must have set in motion a series of events which, without break in continuity or interruption in negotiations, eventually culminates in the sale.

In this case, the court held that the unsuccessful end to negotiations in December of 2014 was a definitive break in negotiations that resumed in 2016 only through the operation of an independent cause:  the casual meeting with a different member of the LLC. No commission was due to plaintiff.

Owner whose roof encroached over common wall was not required to remove it.

JCRE Holdings, LLC v. GLK Land Trust, 2019 IL App (3d) 180677, involved two adjacent properties sharing a common support wall. Predecessor owners of each orally agreed in 1996 that the south property owner could construct a sloped metal roof that would hang off the common wall and over the north property by about 32 inches. Defendant purchased the south property in 2001. Plaintiff acquired the north property in 2013, whereupon it sued defendant, alleging trespass and asking for an injunction ordering defendant to remove the roof encroachment. Defendant claimed it possessed an apparent easement for the roof.

The appellate court first explained that an easement is an interest in land that cannot be created by oral agreement. It may be created only by grant or prescription. Defendant, therefore, did not have an easement.

What defendant did have was a license, which is permission to do an act or a series of acts upon the land of another without possessing any interest in the land. A license protects against an action for trespass for acts done under it before termination. However, a license terminates when title is transferred. Upon termination of a license, the licensee’s failure to remove its property from the licensor’s land constitutes a trespass.

In this case, the license to build the roof over the north property terminated when the defendant bought the south property. Consequently, the roof encroachment was a trespass over plaintiff’s building.

That’s not the end of the story, however. The court held that plaintiff was not entitled to injunctive relief because defendant did not intentionally encroach onto plaintiff’s property because the roof was built only after permission was obtained by the owner at that time. In balancing the equities, the court found that the cost of removing the roof was great and the damage to plaintiff was minimal, making an order to remove the roof encroachment inappropriate. The plaintiff won on the law but lost its requested remedy.

Inverse condemnation suit against village airport allowed to continue.

In Jackiewicz v. Village of Bolingbrook, 2020 IL App. (3d) 180346, the defendant village had operated a small airport since the 1970’s. The plaintiffs’ homes near the airport were built in the 1990’s. In 2015 the village renovated the runway by raising the elevation 7 to 8 feet, increasing the width from 50 to 75 feet, and shifting it 75 feet to the west. When the renovated airport opened, plaintiffs sued the village for just compensation under a theory of inverse condemnation of private property under the U.S. and Illinois Constitutions.

Plaintiffs alleged that the renovation dramatically and negatively impacted their quality of life through a substantial increase in noise levels and vibrations from the frequency of low-flying aircraft. They also alleged a $37,000 decrease in their property values as supported by a report submitted by “a licensed Illinois realtor and attorney.”  The village claimed that fuel sales reports and aircraft leases showed that no change in the frequency or type of aircraft had occurred since the runway renovation. It argued that without showing conditions different from when the airport was built, the 5-year statute of limitations on plaintiffs’ suit had long expired. The trial court agreed with the village and granted summary judgment in its favor.

The appellate court reviewed case law from the U.S. Supreme Court discussing how “avigation easements” can result in takings of private property. Flights above private land constitute a taking when they are “so low and so frequent as to be a direct and immediate interference with the enjoyment and use of the land.”  Public avigation easements can, therefore, take private property and require just compensation to be paid to owners. Increasing the number of flights or introducing noisier aircraft can expand the scope of an existing avigation easement and result in a second compensable taking.

In this case, the court ruled that both sides presented competing evidence regarding whether the airport renovation brought about more flights or noisier aircraft that caused an increased interference with plaintiffs’ enjoyment and use of their property. Those questions of material fact needed to be answered to determine whether the statute of limitations precluded the plaintiffs’ suit. The court reversed the trial court’s decision and sent the case back to the trial court.

Large lot owner unable to develop property at highest and best use.

In First American Bank v. Village of Wilmette, 2019 IL App (1st) 181436, the plaintiffs owned a large lot of nearly 38,000 square feet in a suburb north of Chicago. They purchased the lot and single-family house in 1979 for around $100,000, which was now worth over $450,000. Because property taxes were so high, they hired a firm to design a subdivision of the property into four lots, each potentially worth over $300,000. However, the wedge-like character of the lot required several zoning variances to allow reduced lot widths from 60 feet to around 50 feet and to permit a common private drive and one common out lot fronting the street.

The village zoning board voted 4 to 2 to recommend approving the variance requests. The Village Board voted 6 to 1 to deny them. Plaintiffs filed an action in circuit court seeking a declaratory judgment that their plan should be approved. That court found that the village properly denied the variances. Plaintiffs appealed.

The appellate court explained that a “variance is authority extended to a property owner to use his property in a manner forbidden by the zoning enactment, generally upon a showing of hardship.”  The village governing body has the discretion to determine the use and purpose to which property may be devoted. Courts generally will not interfere with that discretion unless the village action “is shown to be arbitrary, capricious or unrelated to the public health, safety and morals.”  A court’s inquiry will be limited to deciding whether there is any rational basis for the village’s decision.

In making this determination, a court will apply the “La Salle factors,” which are six factors outlined by the Illinois Supreme Court in 1957. The court discussed the factors extensively and applied the facts to each one to conclude that the village’s denial of plaintiffs’ requests for variances was not arbitrary or capricious.

1. The existing uses and zoning of nearby property. All of the nearby lots were improved with single-family houses and the majority met the 60-foot lot-width requirement. The village was affirmatively trying to establish a more uniform character in neighborhoods. Variances of the width requirement would be inconsistent with the village plan.
2. The extent to which property values are diminished by the particular zoning restrictions. The plaintiffs had already realized substantial appreciation of their property. The estimated value of the additional lots was somewhat speculative, as it was not based on actual homes to be built. In addition, even if there was some loss in value, the more significant issue was whether the loss was not required by the public welfare.
3. The extent to which the destruction of property values of plaintiff promotes the health, safety, morals or general welfare of the public. The village presented compelling testimony that the plaintiffs’ proposed plan raised fire safety and utility concerns. The private drive, which could not be used by fire trucks, and the distance of the proposed homes from the street, were problematic. Further, water, sewer, electric and cable lines for all of the homes had to connect to utility lines through the one out lot fronting the street, which was unusual. The property was heavily wooded, creating additional construction and maintenance issues for utility lines and pipes.
4. The relative gain to the public as compared to the hardship imposed upon the individual property owner. Hardship occurs when a property owner is unable to use property profitably, not when the maximum profit cannot be obtained. Plaintiffs would still be able to use the existing lot for a single-family home and could, consistent with the zoning code, replace that home with a much larger house.
5. The suitability of the subject property for the zoned purposes. Plaintiffs used the property for a single-family home since 1979. That their yard is much larger than surrounding properties does not mean the property is not suitable for current zoning, which was the same when the plaintiffs purchased the lot.
6. The length of time the property has been vacant as zoned when considered in the context of land development in the area in the vicinity of the subject property. The plaintiffs’ property may have been underdeveloped but it was not vacant. The relevant question was not whether they should be able to develop its highest and best use, but whether that use complies with the health, safety, and general welfare of the community.

Finally, the court applied two other factors posited in another zoning variance case. It found that plaintiffs had not demonstrated a community need for the proposed subdivision of lots on substandard width not located adjacent to a public street, nor had they shown that the village lacked a careful land use development plan. Balancing all of the factors, the court held that the village’s denial of plaintiffs’ zoning variance requests was not arbitrary or capricious and affirmed the trial court’s decision upholding the denial.

Legal description in final annexation cannot be corrected after one year.

In Coldwater v. Village of Elwood, 2020 IL App (3d) 190247, the appellate court answered a narrow question:  does 65 ILCS 5/7‑1‑46 bar parties to an annexation from correcting errors in the legal description of annexed property after the one-year statutory period has passed?

Section 7‑1‑46 of the Municipal Code requires that an action contesting either directly or indirectly the annexation of any territory to a municipality must be commenced within one year after the date such annexation becomes final. This time limitation applies to “any annexation irrespective of whether such annexation may otherwise be defective or void” (unless the annexed territory was not contiguous and remained not contiguous at the time the lawsuit is brought). The court held that the Legislature intended this language “to have a broad reach.”  Once an annexation is final, defective or not, parties to the annexation cannot correct errors in the legal description if the one-year statutory period has passed. The court distinguished another section in the Municipal Code that allows parties to enforce performance of an annexation agreement within the effective term of the agreement or within five years from the date the cause of action accrued, whichever is later. That section applies only to annexation agreements, not to final annexations.

The court explicitly left open the question of when an annexation is “final,” which was likely relevant in this case. The original annexation ordinance was recorded in 2007 with a legal description inconsistent with the annexation agreement. Between 2008 and 2017, the village re-recorded the ordinance with either a correct or an incorrect legal description at least five different times. Whether the re-recordings indicated final or non-final annexations was left to the trial court to decide.