Mendez v. City of Chi.

228 N.E.3d 774

2023 IL App (1st) 211513

Leila MENDEZ and Alonso Zaragoza, Plaintiffs-Appellants,

v.The CITY OF CHICAGO, a Municipal Corporation; and Kenneth J. Meyer, in His Official Capacity as Commissioner of the City of Chicago Department of Business Affairs and Consumer Protection, Defendants-Appellees.

No. 1-21-1513

Appellate Court of Illinois, First District, First Division.

Filed March 31, 2023

Appeal from the Circuit Court of Cook County. No. 16 CH 15489, The Honorable Cecilia A. Horan, Judge Presiding.

Jacob Huebert and Jeffrey Schwab, of Liberty Justice Center, of Chicago, and Christina Sandefur, of Goldwater Institute, of Phoenix, Arizona, for appellants.

Celia Meza, Corporation Counsel, of Chicago (Myriam Zreczny Kasper, Susan Loose, and Elizabeth Mary Tisher, Assistant Corporation Counsel, of counsel), for appellees.

OPINION

PRESIDING JUSTICE LAVIN delivered the judgment of the court, with opinion.

¶ 1 Plaintiffs, Leila Mendez and Alonso Zaragoza, both Chicago homeowners, sued the City of Chicago and the commissioner of the Department of Business Affairs and Consumer Protection (collectively, the City) claiming the shared housing ordinance, which was enacted in 2016, violated the Illinois Constitution. Specifically, they challenged the provisions relating to home inspections, the primary-residence rule, excessive noise, and banning single night rentals. The circuit court granted the City’s motion to dismiss these claims, and plaintiffs now appeal. We affirm.

¶ 2 BACKGROUND

¶ 3 We set forth only those facts pertinent to this appeal. The shared housing ordinance of the Chicago Municipal Code (Code) (Chicago Municipal Code § 4-14-010 et seq. (amended at Chi. City Clerk J. Proc. 20,269 (Sept. 9, 2020))) regulates the rental of homes in Chicago through web- sites like Airbnb and requires hosts to register and pay an annual fee to the Department of Business Affairs and Consumer Protection.¹ Id. § 4-14-020. A "shared housing unit" is "a dwelling unit containing 6 or fewer sleeping rooms that is rented, or any portion therein is rented, for transient occupancy by guests." Id. § 4-14-010. The ordinance regulates everything from what is required on the advertised website listing to ensuring that guests have clean towels and utensils, while also mandating that hosts notify the police of any criminal activity, egregious condition, or nuisance taking place in the shared housing unit. Id. § 4-14-040. It also prohibits guests from making excessively loud noise during the evening and early morning hours or committing illegal acts like drug trafficking and prostitution. Id. §§ 4-14-010, 4-14-050. Registered homes are subject to inspection every two years; however, the building commissioner has not yet issued such rules and regulations. Id. § 4-16-230. Further, relevant to this appeal, the ordinance generally requires that single family homes and duplexes or row houses be the host’s "primary residence," meaning the place where the host lives most of the year (hereinafter, the primary residence rule).² Id. §§ 4-14-010, 4-14-060(d), (e). The Commissioner, however, may grant adjustments to the primary residence rule where it is an extraordinary burden to the host and the adjustment does not adversely impact the surrounding property owners or public. Id. § 4-14-060(d), (e); Chicago Municipal Code § 4-14-100(a) added June 22, 2016). Finally, the shared housing rules ban single-night rentals. Chicago Municipal Code § 4-14-050(e) (amended at Chi. City Clerk J. Proc. 20,-269 (Sept. 9, 2020)); see also id. § 4-14-050(f).

¶ 4 On November 29, 2016, plaintiffs filed a complaint against the City, raising various state constitutional claims as to the shared housing ordinance. Among them, plaintiffs alleged the inspection provision violated their right to be free from unreasonable searches and seizures and their right to privacy because they authorized the warrantless searches of their homes (count I). They also alleged the primary residence rule violated substantive due process because it was not rationally related to a legitimate governmental interest and the adjustment exception to the rule was impermissibly vague (count III). Finally, they alleged the noise rule violated substantive due process (count VI) insofar as it was vague and equal protection inso- far as it arbitrarily discriminated against shared housing units by subjecting them to harsher restrictions than hotels and bed- and-breakfasts (count VII).

¶ 5 Plaintiff Mendez alleged that she was injured because the ordinance basically precluded her from using the Airbnb platform to rent out her home, as she was avoiding being "subject to warrantless searches and other restrictions the Ordinance places on shared housing units." Plaintiff Zaragoza alleged that he owns a home and a three-unit residential building in Chicago. Plaintiff Zaragoza would be injured because he rents out a room in his home as a shared housing unit that could be subjected to warrantless searches, as well as the excessive noise rules. He further alleged that the ordinance precluded him from using the Airbnb platform to rent out the unit in his three-unit building because it is not his primary residence. The two plaintiffs finally alleged they suffered injury as Chicago taxpayers. They asked for declaratory and injunctive relief, and the award of attorney fees.

[1] ¶ 6 Pursuant to the City’s motion (see 735 ILCS 5/2-619.1 (West 2016)), the circuit court dismissed with prejudice counts I, VI, and VII.³ The court also dismissed with prejudice plaintiffs’ due process and equal protection challenges in count III but denied the motion as to the primary residence rule adjustment provision in that same count.

¶ 7 Plaintiffs filed an amended complaint, again challenging the primary residence rule and its exception as violating the Illinois Constitution (count II). That also was dismissed pursuant to the City’s motion. Plaintiffs’ second-amended complaint resulted in cross-motions for summary judgment. The City prevailed after the court determined that plaintiffs lacked an injury-in-fact and, contrary to the court’s earlier finding, taxpayer standing; their claim also failed on the merits. Last, plaintiffs filed a third-amended complaint adding that the single-night ban violated separation of powers (count VIII) by unlawfully delegating legislative authority to administrative officials. Plaintiffs maintained they previously rented out their shared housing units for single nights and would do so but for the ban. The circuit court granted the City’s motion to dismiss the third-amended complaint, finding that plaintiffs lacked standing based on severability principles.

¶ 8 This appeal followed.

¶ 9 ANALYSIS

[2–7] ¶ 10 This appeal arises from an order granting defendants’ combined motion to dismiss filed under section 2-619.1 of the Code of Civil Procedure. 735 ILCS 5/2-619.1 (West 2016). Section 2-619.1 of the Code allows a party to file a combined section 2-615 and section 2-619 motion to dismiss. Henderson Square Condominium Ass’n v. LAB Townhomes, LLC, 2015 IL 118139, ¶ 32, 399 Ill.Dec. 387, 46 N.E.3d 706. A section 2-615 motion to dismiss attacks the legal sufficiency of the complaint. Carr v. Koch, 2012 IL 113414, ¶ 27, 367 Ill.Dec. 1, 981 N.E.2d 326. In other words, a section 2-615 motion to dismiss tests the legal sufficiency of the complaint based on defects apparent on the face of the pleading. Veazey v. Board of Education of Rich Township High School District 227, 2016 IL App (1st) 151795, ¶ 32, 406 Ill.Dec. 79, 59 N.E.3d 857. The rele- vant inquiry is whether the allegations of the complaint, construed in the light most favorable to the plaintiff, set forth sufficient facts to establish a cause of action upon which relief may be granted. Id. In making this determination, all well-pleaded facts must be taken as true. LAB Townhomes, LLC, 2015 IL 118139, ¶ 61, 399 Ill.Dec. 387, 46 N.E.3d 706. A section 2-619 motion to dismiss, on the other hand, admits as time all well-pleaded facts, along with all reasonable inferences that can be gleaned from those facts, but asserts an affirmative defense or other matter that avoids or defeats the claim. Id. ¶ 34; Carr, 2012 IL 113414, ¶ 27, 367 Ill.Dec. 1, 981 N.E.2d 326; see also Veazey, 2016 IL App (1st) 151795, ¶ 23, 406 Ill.Dec. 79, 59 N.E.3d 857 (noting, this encompasses standing, which is an affirmative defense). We interpret the pleadings and supporting documents in the light most favorable to the nonmoving party. LAB Toumhomes, LLC, 2015 IL 118139, ¶ 34, 399 Ill.Dec. 387, 46 N.E.3d 706. We review the trial court’s granting of a motion to dismiss under sections 2-615 and 2-619, as well as its determination on standing, de novo. Illinois Ass’n of Realtors v. Stermer, 2014 IL App (4th) 180079, ¶ 16, 378 Ill.Dec. 887, 5 N.E.3d 267.

[8–12] ¶ 11 Here, plaintiffs have moved for declaratory judgment, and thus, are bound to establish the elements of the cause of action: (1) a plaintiff with a legally tangible interest, (2) a defendant with an opposing interest, and (3) an actual controversy between the parties as to those interests. Beahringer v. Page, 204 Ill. 2d 363, 372, 273 Ill.Dec. 784, 789 N.E.2d 1216 (2003). These same elements must be proven to establish standing in this context. See Harris Bank of Roselle v. Village of Mettawa, 243 Ill. App. 3d 103, 109, 183 Ill.Dec. 287, 611 N.E.2d 550 (1993); see also Village of Chatham v. County of Sangamon, 216 Ill. 2d 402, 419, 297 Ill.Dec. 249, 837 N.E.2d 29 (2005) ("Standing is a preliminary question in all declaratory judgment actions."). An "actual controversy" requires a showing that the underlying facts and issues of the case are not moot or premature, such that a court must pass judgment on mere abstract propositions of law, render an advisory opinion, or give legal advice on future events. Beahringer, 204 Ill. 2d at 374-75, 273 Ill.Dec. 784, 789 N.E.2d 1216. Likewise, "interested parties" must possess a personal...