Oak Run Prop. Owners Ass'n, Inc. v. Basta

2019 IL App (3d) 180687

145 N.E.3d 513

437 Ill.Dec. 940

The OAK RUN PROPERTY OWNERS ASSOCIATION, INC., an Illinois Not-for-Profit Corporation, Plaintiff and Counterdefendant-Appellee,

v.Ray BASTA, Kris Basta, K.B. Farms of Montana, L.L.C., Michael Zagardo, Janice Zagardo and the Spoon Valley Lake Sanitary District, Defendants

(Michael Zagardo and Janice Zagardo, Defendants, Counterplaintiffs, and Cross-Plaintiffs-Appellants;

Ray Basta, Kris Basta, and K.B. Farms of Montana, L.L.C., Defendants and Cross-Defendants-Appellees;

The Spoon Valley Lake Sanitary District, Defendant-Appellee).

Appeal No. 3-18-0687

Appellate Court of Illinois, Third District.

Opinion filed November 5, 2019

James E. Skinner, of Skinner & Associates, L.L.C., of Galesburg, for appellants.

John W. Robertson, of Statham & Long, LLC, of Galesburg, for appellee Oak Run Property Owners Association, Inc.

Daniel S. Alcorn and Elisa M. Nelson, of Alcorn Nelson LLC, of Galesburg, for appellees Ray Basta, Kris Basta, and K.B. Farms of Montana, L.L.C.

James D. Blake, of Blake Law Office, LLC, of Galesburg, for other appellee.

JUSTICE WRIGHT delivered the judgment of the court, with opinion.

¶ 1 The Oak Run Property Owners Association, Inc. (ORPOA), initiated a declaratory action against Ray and Kris Basta, The Spoon Valley Lake Sanitary District (Sanitary District), and Michael and Janice Zagardo to determine the rights, duties, and responsibilities of the parties in relation to a retaining wall built by the Bastas near their shared property line with the Zagardos. The Zagardos appeal the circuit court's findings relating to the declaratory action and the denial of their cross/counter-claims seeking injunctive relief.

¶ 2 I. BACKGROUND

¶ 3 Defendants, the Bastas, and defendants-appellants, the Zagardos, own adjoining lots in the Forest Ridge Subdivision (Subdivision). On June 4, 2014, the Bastas applied for a permit to construct a residence on their lot No. 392.¹ Article VI, sections 1 and 2, of the Subdivision's covenants, provide the Architectural and Environmental Control Committees with the authority to approve construction plans in the Subdivision. In practice, these two committees operate as one, known as the AEC. The Bastas were approved for the June 4, 2014, permit.

¶ 4 On August 3, 2015, the Bastas applied for a second permit for purposes of landscaping and tree removal on lot No. 392. This permit application broadly sought approval for "retaining walls." The AEC approved this second permit at a meeting on August 5, 2015.

¶ 5 On September 17, 2015, the subcontractor for the Bastas, Scot Thompson, submitted drawings to the AEC's inspector, Daniel Russell, to append a retaining wall to the landscaping and tree removal permit approved by the AEC on August 5, 2015. The drawings indicated the retaining wall would, at least in part, be situated within one of the 10-foot utility easements that exist between the Subdivision's lots.²

¶ 6 On September 22, 2015, the Bastas applied for a third permit from the AEC to build a detached garage on lot No. 392. This third permit, approved by the AEC on October 7, 2015, granted the Bastas permission to build a detached garage with "2x6 walls, concrete wall found[ation]."

¶ 7 On September 28, 2015, the Bastas' subcontractor, Chris Courtright, began constructing the retaining wall. The retaining wall was constructed, at least in part, within the 10-foot utility easement, approximately 2 feet from the property line with the Zagardos' lot No. 391 and 10 feet from the Zagardos' home.³ Lot No. 391 is not the Zagardos' primary residence, so they did not observe the Bastas' retaining wall until mid-October 2015. By that time, the concrete for the retaining wall was poured and cured, and the forms on the retaining wall had been removed. However, the ground near the retaining wall was not yet backfilled or landscaped. Shortly after discovering the retaining wall, the Zagardos expressed their objections by lodging a complaint with the AEC.

¶ 8 On November 4, 2015, the AEC considered the Zargardos' objections to the retaining wall.⁴ Further, in mid-November to early December 2015, the Zagardos e-mailed the manager of plaintiff-appellee, the ORPOA, met with the ORPOA board, and met with the AEC to request the removal of the retaining wall. No action was taken by these entities to remove the retaining wall.

¶ 9 However, on December 3, 2015, the ORPOA filed a complaint for declaratory judgment in the circuit court of Knox County under section 2-701 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-701 (West 2014) ), seeking guidance on whether the construction of the retaining wall violated the Subdivision's covenants and/or the AEC's rules and regulations and, if so, whether any remedies existed after the retaining wall was completed.

¶ 10 The Zagardos answered the complaint for declaratory judgment and filed cross-claims and a counterclaim against the Bastas, the ORPOA, and the Sanitary District.⁵ The Zagardos alleged sections 3 and 4 of article VII of the Subdivision's covenants forbid the construction of retaining walls in the 10-foot utility easements. The Zagardos also claimed the ORPOA, by allowing the Bastas to construct the retaining wall without accurately describing its scope and dimensions, violated the Subdivision's covenants and the AEC's rules and regulations. The Zagardos sought monetary damages and a permanent injunction for the removal of the retaining wall. The relevant sections of the Subdivision's covenants and the AEC's rules and regulations are recited below.

¶ 11 A. The Bench Trial

¶ 12 A bench trial was held on June 1 and 6, 2018. Both parties presented multiple witnesses.

¶ 13 1. Ray Basta

¶ 14 Ray explained he acted as his own general contractor for the construction of the retaining wall. Ray relied upon his subcontractor, Thompson, to obtain AEC approval and permitting for the retaining wall. It was Ray's understanding that Thompson took all necessary steps to amend the landscaping and tree removal permit, approved on August 5, 2015, to include the retaining wall.

¶ 15 Ray knew the retaining wall was being constructed in a utility easement, and he did not request permission from the AEC or the Sanitary District to construct the retaining wall in that location. Ray knew he and his wife would be required to remove the retaining wall if the Sanitary District found that to be necessary for the sewer system maintenance.

¶ 16 According to Ray, the Bastas always intended to abate the visual impact of the retaining wall. He and his wife considered various landscaping options. Eventually, the Bastas landscaped the retaining wall with Boston ivy and sky pencil hollies that would grow in size to entirely cover the retaining wall. This plan was effectuated without access to the Zagardos' lot.

¶ 17 2. Janice Zagardo

¶ 18 In mid-October 2015, Janice first saw the retaining wall when she arrived at lot No. 391. She was immediately upset about the sight of the retaining wall, so she contacted the ORPOA to lodge a complaint and inquire about whether the retaining wall was approved by the AEC.

Eventually, Janice spoke with AEC inspector Russell. In mid-October 2015, Russell viewed the retaining wall and informed Janice that it had been approved by the AEC on a landscaping permit. Russell also told Janice that the Bastas planned to landscape the retaining wall.

¶ 19 Janice testified that the retaining wall was only 10% complete in mid-October 2015, due to the lack of landscaping and unconstructed connection to the Bastas' detached garage. According to Janice, in spite of her objections, construction continued on the retaining wall after she met with Russell in mid-October 2015. She agreed in mid-October 2015, the retaining wall "was up * * * and the concrete forms had been removed."

¶ 20 3. Daniel Russell

¶ 21 Russell testified that the retaining wall was not described in the Bastas' landscaping and tree removal permit, approved by the AEC on August 5, 2015. However, in late-September 2015, after the landscaping and tree removal permit was issued, Thompson provided drawings of the retaining wall to be appended to that permit. The drawings did not indicate the scope or dimensions of, and no formal application was filed with the AEC for, the retaining wall.

¶ 22 After viewing the drawings, Russell, in his discretion as AEC inspector, approved the retaining wall and told Thompson he could begin construction. Russell assured Thompson that he would do what was necessary to add the retaining wall to the existing landscaping and tree removal permit. Russell confirmed it is common practice and procedure for him to grant minor changes to construction plans without consulting the AEC. According to Russell, neither the Subdivision's covenants nor the AEC's rules and regulations restrict his authority to approve such changes. Russell did not believe he was required to consult the AEC before advising Thompson and the Bastas that they could construct the retaining wall.

¶ 23 Russell received a phone call from Janice about the retaining wall, causing him to travel to the Zagardos' lot. Russell was surprised by the height of the retaining wall. He told the circuit court that he felt the drawings provided by Thompson were misleading as to the elevation and topography of lot Nos. 391 and 392. In Russell's opinion, the retaining wall, as constructed, involved major changes to the landscaping and tree removal permit approved by the AEC on August 5, 2015. If Russell had been more informed of the scope and dimensions of the retaining wall, as constructed, he would have presented the drawings to the AEC.

¶ 24 4. Scot Thompson

¶ 25 Thompson said the retaining wall was not described in the landscaping and tree removal permit approved by the AEC on August 5, 2015, because the Bastas had not yet instructed him to build a retaining wall. On September 17, 2015, after the prospect of constructing a retaining wall arose, Thompson provided drawings of the retaining wall...