Strauss v. City of Chi.

2022 IL 127149

215 N.E.3d 87

465 Ill.Dec. 291

Brian J. STRAUSS et al., Appellants,

v.The CITY OF CHICAGO, Appellee.

Docket No. 127149

Supreme Court of Illinois.

Filed September 22, 2022

Robert Robertson and Marko Duric, of Robertson Duric, and James Patrick McKay Jr., both of Chicago, for appellant.

Celia Meza, Corporation Counsel, of Chicago (Myriam Zreczny Kasper and Suzanne M. Loose, Assistant Corporation Counsel, of counsel), for appellee.

William J. Seitz, of Law Offices of William J. Seitz, LLC, of Chicago, for amici curiae Station Place Townhouse Condominium Association et al.

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

¶ 1 The building at issue in this case is located at 1572 North Milwaukee Avenue in Chicago. The 1572 North Milwaukee Avenue Building Corporation (Corporation) owned the building, and plaintiff Brian J. Strauss¹ was the Corporation's president. Double Door Liquors (Double Door)—a music venue—was a tenant in the building. Numerous difficulties arose with Double Door, including lease violations, excessive noise levels, illegal drug use, alcohol abuse, and property damage. These problems resulted in the termination of Double Door's lease. The Corporation filed an eviction action against Double Door, which led to Double Door's eviction from the building. Subsequently, defendant, the City of Chicago (City) enacted a zoning ordinance that changed the types of establishments that were allowed in the building.

¶ 2 Plaintiffs’ second amended complaint asserted claims challenging the zoning ordinance as well as claims based on certain conduct of Proco Joe Moreno—the local alderman—and the City that occurred before the zoning ordinance was enacted. Plaintiffs alleged several constitutional rights violations, as well as claims for money damages in tort. The circuit court dismissed the entirety of the complaint with prejudice. The appellate court affirmed the circuit court's dismissal, finding that, pursuant to section 2-615 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-615 (West 2016) ), plaintiffs failed to state a claim for substantive due process or equal protection violations, as the complaint described the noise levels, drug and alcohol abuse, and property damage associated with Double Door, thereby establishing that the enactment of the zoning ordinance satisfied the rational basis test, as it was reasonably related to a legitimate government interest. 2021 IL App (1st) 191977, ¶¶ 42, 46, 449 Ill.Dec. 907, 180 N.E.3d 832. The appellate court further found the plain language of section 2-201 of the Local Governmental and Governmental Employees Tort Immunity Act (Act) ( 745 ILCS 10/2-201 (West 2016) ) provided absolute immunity to the City on the tort claims. 2021 IL App (1st) 191977, ¶ 67, 449 Ill.Dec. 907, 180 N.E.3d 832. For the following reasons, we affirm the judgment of the appellate court, albeit on different grounds.

¶ 3 BACKGROUND

¶ 4 I. Federal Court

¶ 5 On July 20, 2017, plaintiffs filed a complaint against Moreno and the City in the United States District Court for the Northern District of Illinois Eastern Division (Northern District). Subsequently, on January 8, 2018, plaintiffs filed a complaint against the City in the circuit court of Cook County, requesting declaratory, injunctive, and other relief. The case was removed from the circuit court and joined with the Northern District case, as both related to the same issues and set forth many of the same causes of action. The Northern District concluded the complaint did not state a federal claim that was ripe for adjudication. Strauss v. City of Chicago , 346 F. Supp. 3d 1193, 1211 (N.D. Ill. 2018). Accordingly, the litigation was dismissed without prejudice to plaintiffs’ state law claims and remanded to the circuit court for plaintiffs to file a second amended complaint to conform with the Northern District's memorandum opinion and order. See id.

¶ 6 II. Plaintiffs’ Second Amended Complaint

¶ 7 A. Allegations

¶ 8 On February 19, 2019, plaintiffs filed a 10-count, second amended complaint in the circuit court, alleging as follows. The building is located at 1572 North Milwaukee Avenue in Chicago and had been owned by Strauss's family for nearly 40 years. Ownership of the building was incorporated as 1572 North Milwaukee Avenue Building Corporation, with Strauss named as president of the Corporation. The four-story building is in the heart of the Milwaukee-North-Damen corridor of Chicago—a thriving business district—and encompasses nearly 20,000 square feet of commercial businesses and residential apartments. The complaint alleged that, before the underlying litigation commenced, the estimated market value of the building was roughly $10 million.

¶ 9 The building had been zoned as B3-2 since 1974. The B3-2 zoning classification allowed residential apartments in the building above the street level, as well as commercial property such as shopping centers, retail storefronts, and large stores at the street level. At all relevant times, all other buildings along the Milwaukee-North-Damen corridor were zoned at B3-2 or greater.

¶ 10 Double Door had been a commercial tenant in the building. In 2012, Moreno—who had a personal and financial relationship with Double Door's owners—informed plaintiffs that only Double Door would be allowed to rent the building. However, during Double Door's lease, problems occurred with continually high noise levels, illicit drug use and alcohol abuse by Double Door's patrons, and property damage by Double Door and its patrons. These problems, along with certain lease violations, resulted in the termination of Double Door's lease. In 2015, the Corporation filed an eviction action against Double Door.

¶ 11 On April 13, 2016—while the forcible entry and detainer litigation was pending—Moreno presented to the zoning committee² a downzoning amendment to apply solely to the building, leaving the zoning of the surrounding properties unchanged. The complaint alleged that Moreno introduced the downzoning amendment as a message for plaintiffs to keep Double Door as a tenant "or suffer the consequences." The complaint further alleged that one of Double Door's owners stated that Moreno planned the downzoning amendment to protect Double Door by making the property less appealing to potential future tenants.

¶ 12 Moreno's proposed amendment called for the zoning of the building to be changed from B3-2 to B1-1. The B1-1 zoning classification prohibited upper-level apartments and more than 30 types of businesses, including general restaurants, medium and large entertainment venues, and hotels. The complaint alleged that a zoning change to B1-1 would result in a significant decrease in property value and that the proposed amendment applied only to the building; treated the building differently from others in the neighborhood; amounted to illegal spot zoning; offered no benefit to the community; and was arbitrary, capricious, and indicative of Moreno's discriminatory intent.

¶ 13 On June 20, 2016, the zoning committee deferred the B1-1 downzoning proposal, making it available to be called for a vote at any time in the future. On July 19, 2016, Strauss met with Moreno, who again indicated that only Double Door would be allowed in the building. On August 15, 2016, the Corporation prevailed in the eviction against Double Door. The circuit court concluded that Double Door violated the lease and ordered Double Door to vacate the building by December 31, 2016. Double Door failed to comply with the order to vacate and consequently was evicted from the building on February 6, 2017.

¶ 14 The complaint alleged that on February 8, 2017—two days after Double Door was evicted—Strauss attended a city hall meeting. Present were, inter alia , the commissioner for the City's planning and development department, the chairman of the zoning committee, the zoning administrator, Moreno, and Double Door's owners. At the meeting, the commissioner attempted unsuccessfully to broker a sale of the building to Double Door for a purchase price of $7 million and/or to negotiate a new month-to-month lease between Double Door and the Corporation. Also at the meeting, Moreno warned Strauss that if Double Door were not allowed back in the building, Moreno would make the zoning process very lengthy and expensive and that the building could be vacant for two to five years. Moreno asserted that he decides what kind of tenant goes in the building and that Strauss could avoid problems if Double Door were allowed back in the building at a rent far less than what the market would bear.

¶ 15 The complaint alleged that on February 25, 2017, Moreno confronted Strauss at the building, advising that the building would not have a tenant for three years, that there would be inspectors in the building daily, that Strauss could "come back to [Moreno] on [his] knees," and that the building would be empty with no income for Strauss or his family.

¶ 16 According to the complaint, "conservatively speaking," the space formerly occupied by Double Door normally garnered $35,000 per month in rent. However, the space had been vacant since Double Door's eviction because Moreno's looming downzoning proposal prevented the Corporation from successfully leasing the space, as potential new tenants refused to enter leases unless the zoning classification of the building remained at B3-2.

¶ 17 The complaint alleged that efforts to sell the building were also unsuccessful. On May 10, 2017, a contract was prepared to sell the building to "Buyer A" for $9.6 million. However, Buyer A canceled the contract on June 8, 2017, after learning from Moreno of the pending downzoning amendment. Two days before Buyer A canceled the contract, Moreno proposed a second amendment that would downzone the building to RS-3, which accommodates the development of single-unit, detached houses on individual lots. Moreno proposed this amendment, notwithstanding that the building had never been used as a...