City of Elgin v. Elgin Memory Care, LLC

2020 IL App (2d) 200070-U

• Court: Appellate Court of Illinois
• Decided: February 3, 2020
• Docket: 2-20-0070
• Status: Unpublished

Opinion

2020 IL App (2d) 200070-U No. 2-20-0070 Order filed February 3, 2020

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

CITY OF ELGIN, an Illinois Municipal ) Appeal from the Circuit Court Corporation, ) of Kane County. ) Plaintiff-Appellee, ) ) v. ) No. 17-CH-846 ) ELGIN MEMORY CARE, LLC, ) ) Defendant-Appellant ) ) (Mace Iron Works, Inc., Accurate Housing ) Systems, Inc., Global Builders, Inc., and ) Honorable Elgin Memory Care Property Owners ) Kevin T. Busch, Association, Inc., Defendants). ) Judge, Presiding. ______________________________________________________________________________

JUSTICE SCHOSTOK delivered the judgment of the court. Justices Hutchinson and Hudson concurred in the judgment.

ORDER

¶1 Held: The trial court did not abuse its discretion in denying the defendant’s motion for a temporary restraining order because the defendant failed to raise a fair question as to the likelihood of success on the merits of its claims.

¶2 On September 21, 2017, the plaintiff, City of Elgin, filed a complaint against the

defendants, Elgin Memory Care, LLC (EMC), Mace Iron Works, Inc., Accurate Housing Systems,

Inc., Global Builders, Inc., and Elgin Memory Care Property Owners Association, Inc. The City 2020 IL App (2d) 200070-U

sought an order to demolish improvements on property owned by EMC in Elgin. In May 2018,

the parties reached an agreement on the issue, requiring EMC to take certain actions by June 15,

2019. EMC was unable to comply with the terms of the agreement. On January 13, 2020, EMC

filed a motion for a temporary restraining order (TRO) and preliminary injunction to prevent the

City from demolishing the improvements on its property. On January 22, 2020, the trial court

denied EMC’s motion for TRO. EMC appeals from this order. We affirm.

¶3 I. BACKGROUND

¶4 In August 2015, EMC was issued a building permit to construct a proposed 69,000-square-

foot nursing and personal care facility on a parcel of land located at 3271 U.S. Highway 20 in

Elgin. The permit expired on April 27, 2016. On June 20, 2016, a permit extension was approved

with said extension expiring on December 21, 2016. At some point during this time frame, a

general contractor, Global Builders, entered a construction agreement with EMC and commenced

construction on the project.

¶5 On September 23, 2016, Global Builders filed a complaint against EMC for breach of

contract and to foreclose its mechanic’s lien on the subject property. That case was docketed in

Kane County as case No. 16-CH-964. The complaint indicated that Global Builders had entered

into a construction agreement with EMC. Global Builders had completed some construction on

the subject property and EMC owed Global Builders over $2 million dollars. The record indicates

that a concrete slab was poured, utilities were brought to the site, and framing and partial sheathing

of the exterior and interior walls and the roof of the structure had been completed. The record

indicates that additional parties were named as counter-plaintiffs to the mechanic’s lien claim:

Mace Iron Works and Accurate Housing Systems.

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¶6 EMC failed to complete construction of the proposed facility by the time the permit expired

in December 2016. On September 21, 2017, the City filed a two-count verified complaint against

EMC and the lien claimants, Global Builders, Mace Iron Works, and Accurate Housing Systems.

The City sought demolition or repair of the uncompleted facility pursuant to the provisions of the

Illinois Municipal Code (Code) governing the demolition of private property (65 ILCS 5/11-31-1

et seq. (West 2016)). The City argued that, if EMC could not complete construction of the

proposed facility, the improvements should be demolished, and the property restored to its

preconstruction condition. The City filed a later statement in support of its complaint alleging that

the subject property, in its current condition, was not only “dangerous and unsafe” but also

“uncompleted and abandoned” within the meaning of section 11-31-1 of the Code.

¶7 On May 15, 2018, the City and EMC entered a stipulation and agreed order. The agreed

order imposed two obligations upon EMC. First, EMC agreed that it would demolish the

previously constructed above-ground elements of the proposed facility and perform other site

restoration activities by July 15, 2018. If EMC failed to meet this deadline, the agreed order

provided that the City would be authorized to perform that above-ground demolition work.

Second, EMC agreed that if it did not recommence construction of the proposed facility by June

15, 2019, then it would remove the remaining improvements by July 15, 2019. The remaining

improvements were defined as, but not limited to, “the slab, foundation, light standards, parking

facilities, curb and gutter, and utilities to the property line.” The agreed order provided that if

EMC failed to recommence construction by the agreed deadline, then the City would be authorized

to perform the demolition and removal of the remaining improvements.

¶8 As of June 14, 2019, EMC had performed the required demolition of the above-ground

improvements and other site restoration but had not recommenced construction of the proposed

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facility. On that date, EMC filed a motion to modify the agreed order, seeking a six-month

extension of time in which to recommence construction or perform demolition of the remaining

improvements. EMC alleged that it was in the process of obtaining the necessary financing to

complete construction. EMC explained that its efforts to obtain funding had been hindered because

it was named as a defendant in a civil suit filed by the Securities and Exchange Commission (SEC)

(case no. 1:17-cv-04686) in the U.S. District Court for the Northern District of Illinois, Eastern

Division. However, as of May 13, 2019, EMC had been dismissed from the civil suit and, since

that time, EMC alleged that it had been diligently pursuing the steps necessary to recommence

construction on the project. At a status hearing on July 18, 2019, EMC voluntarily withdrew its

motion to modify the agreed order.

¶9 On January 13, 2020, EMC filed its emergency motion for TRO and preliminary

injunction. EMC alleged that the subject property had undergone substantial improvement with

almost $3 million of site utility and concrete work. On information and belief, EMC believed the

City had entered into a contract to complete the demolition of the remaining improvements on the

subject property. EMC argued that the City had not provided proper notice to all interested parties

of the proposed demolition of the subject property. EMC also argued that there was no urgent

basis to demolish the subject property as the City had waited almost seven months to enforce its

right to do so under the agreed order. Finally, EMC alleged that preservation of the subject

property was an ascertainable right in need of protection, irreparable harm would occur if the

remaining improvements were demolished, and there was no other adequate remedy at law. EMC

requested that the trial court enjoin the City from demolishing the remaining improvements and

schedule a hearing on his motion for preliminary injunction.

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¶ 10 On January 14, 2020, a hearing was held on EMC’s emergency motion. A transcript from

that hearing is not included in the record on appeal. In a written order on that date, the trial court

stayed demolition and indicated that EMC was required to provide the following by 5 p.m. on

January 21, 2020: (1) a detailed plan for resolving the mechanic’s lien claim filed by Global

Builders; (2) a written agreement by all parties that provided for Global Builders to recommence

construction of the proposed facility by February 14, 2020; and (3) written evidence of proof of

financing for the complete construction of the proposed facility.

¶ 11 On January 22, 2020, following a hearing, the trial court entered a written order lifting the

stay and denying EMC’s motion for a TRO and a preliminary injunction. The record does not

contain a transcript from this hearing. In its written order, the trial court stated that the agreed

order was in the nature of a settlement agreement and that EMC had not performed what was

required even though it had additional time to perform. The trial court found that EMC had not

complied with the agreed order and the City was entitled to enforce its rights. EMC filed a timely

notice of interlocutory appeal from this order pursuant to Illinois Supreme Court Rule 307(d) (eff.

Nov. 1, 2017).

¶ 12 II. ANALYSIS

¶ 13 On appeal, EMC argues that the trial court erred in denying its motion for a TRO and not

allowing a hearing on a preliminary injunction. A temporary restraining order is a drastic remedy

that should only be granted in exceptional circumstances and for a brief duration. Capstone

Financial Advisors, Inc. v. Plywaczynski, 2015 IL App (2d) 150957, ¶ 10. As the party seeking

the injunction, EMC must demonstrate that there is a “fair question” as to each of the following:

(1) a clearly ascertained right in need of protection, (2) irreparable injury in the absence of an

injunction, (3) no adequate remedy at law, and (4) a likelihood of success on the merits of the case.

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Mohanty v. St. John Heart Clinic, S.C., 225 Ill. 2d 52, 62 (2006). The failure to establish any one

of these elements is a sufficient basis to deny a request for TRO. Yellow Cab Co. v. Production

Workers Union of Chicago & Vicinity, Local 707, 92 Ill. App. 3d 355, 356 (1980). A decision to

grant or deny a TRO is reviewed for an abuse of discretion. Bradford v. Wynstone Property

Owners’ Association, 355 Ill. App. 3d 736, 739 (2005). “The only question before the court of

review is whether there was a sufficient showing to sustain the order of the trial court.” Callis,

Papa, Jackstadt & Halloran, P.C. v. Norfolk & Western Ry. Co., 195 Ill. 2d 356, 366 (2001).

¶ 14 At the outset, we note that the record does not include transcripts from the January 14 and

22, 2020, hearings on the motion for TRO. It is the burden of the appealing party to provide the

reviewing court with a sufficiently complete record to allow for meaningful appellate review.

Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92 (1984). As a general rule, “[a]n issue relating to a

circuit court’s factual findings and basis for its legal conclusions obviously cannot be reviewed

absent a report or record of the proceeding.” Corral v. Mervis Industries, Inc., 217 Ill. 2d 144, 156

(2005). In the absence of a sufficiently complete record, a reviewing court will resolve all

insufficiencies apparent therein against the appellant and will presume that the trial court’s ruling

had a sufficient legal and factual basis. Foutch, 99 Ill. 2d at 391-92. While we will keep these

principles in mind, we observe that the trial court entered written orders which reveal in some part

its reasoning for the entered orders. Accordingly, we will review the propriety of the trial court’s

order denying the TRO, but any insufficiencies in the record will be construed against EMC. Id.

¶ 15 EMC first argues that the trial court abused its discretion in denying the TRO because it

raised a fair question that it could succeed on its request to modify the agreed order. However, the

record does not indicate that EMC ever requested to modify the agreed order as part of its motion

for TRO. Although EMC had filed a motion to modify the agreed order prior to filing its motion

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for TRO, the record indicates that EMC voluntarily withdrew the motion. Additionally, although

EMC’s written motion for TRO mentioned that, due to the suit for mechanic’s lien and the SEC

case, it was unable to obtain financing to complete the project, the TRO did not request

modification of the agreed order. Rather, EMC indicated in the TRO that the basis for relief was

that the City did not provide proper notice to all parties of the demolition, there was no urgent

basis for the demolition, and that EMC was in the process of resolving underlying litigation that

would allow it to resume construction on the subject property. Moreover, because there is no

transcript from the hearing on the TRO, we must presume that EMC did not verbally request a

modification of the agreed order at the hearing. Id. As such, EMC’s argument that the trial court

abused its discretion, because EMC had raised a fair question as to succeeding on the merits of a

request to modify the agreed order, is forfeited because the record does not indicate that EMC ever

raised such a request in the trial court as part of the TRO proceeding. Fauley v. Metropolitan Life

Insurance Co., 2016 IL App (2d) 150236, ¶ 55 (issues not raised in the trial court are forfeited and

may not be raised for the first time on appeal).

¶ 16 Even absent forfeiture, EMC’s argument is without merit. An agreed order is a recordation

of an agreement between the parties and is subject to the rules of contract interpretation. In re

Marriage of Tutor, 2011 IL App (2d) 100187, ¶ 13. Once an agreed order has been entered, it is

generally binding on the parties and cannot be amended or modified without the consent of each

party. In re Marriage of Rolseth, 389 Ill. App. 3d 969, 971 (2009). Agreed orders may be modified

or vacated by a court “only upon a showing that meets the standard applied to section 2-1401

petitions [735 ILCS 5/2-1401 (West 2018)].” Id. at 972. The guiding principle in the

administration of section 2-1401 relief is that the petition invokes the equitable powers of the trial

court, which should prevent enforcement of a judgment when it would be unfair, unjust, or

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unconscionable. Smith v. Airoom, Inc., 114 Ill. 2d 209, 225 (1986). Relief under section 2-1401

may be available to set aside an agreed order when there is newly discovered evidence, or the order

resulted from a gross disparity in the capacity or position of the parties, coercion, incompetence of

one of the parties or fraudulent misrepresentation. People ex rel. Devine v. Murphy, 181 Ill. 2d

522, 538 (1998).

¶ 17 In the present case, EMC has failed to raise a fair question as to a proper basis for modifying

the agreed order. EMC asserts that a fair question was raised based on two facts. First, when the

agreed order was entered it reasonably believed that it could secure financing but was hindered by

the SEC’s civil suit. Second, it substantially complied with the agreed order by completing the

demolition of the above-ground improvements. These assertions do not establish any newly

discovered evidence, inequitable bargaining position, coercion or fraud, and thus no basis for

modification of the agreed order. Id. With respect to the SEC civil suit, we can take judicial

notice, based on the case number, that the case was filed in 2017. Thus, the SEC litigation was

known to EMC at the time that it entered the agreed order. With respect to substantial compliance,

we acknowledge that EMC, pursuant to the agreed order, completed the removal of the above-

ground improvements. However, EMC also agreed to recommence construction by June 2019,

which it failed to do. Under the agreed order, this basis alone was sufficient for the City to seek

demolition of the remaining improvements. In re Marriage of McLauchlan, 2012 IL App (1st)

102114, ¶ 21 (parties are bound to the terms of their agreements). As such, EMC has failed to

raise a fair question that it could succeed on a claim to modify the agreed order.

¶ 18 EMC argues that, as a matter of equity, the City should be precluded from proceeding with

demolition because the remaining improvements no longer constitute a hazard. However, the

agreed order indicated that the City had the right to demolish the remaining improvements if

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construction did not recommence by a specific date. Moreover, section 11-31-1 of the Code (65

ILCS 5/11-31-1 (West 2016)), allows a municipality to seek to demolish structures that not only

constitute a hazard, but also structures that are “uncompleted and abandoned.” Accordingly,

merely because the remaining improvements and the condition of the property no longer pose a

hazard is not alone a sufficient reason to preclude the City from seeking the relief that it and EMC

specifically consented to in the agreed order. Although EMC argues that it will be irreparably

harmed if the remaining improvements are demolished, EMC specifically contracted for this

consequence in the agreed order and, as stated, has not raised a fair question that there is a reason

to modify or vacate the agreed order.

¶ 19 EMC next argues that the trial court abused its discretion in denying the TRO because it

failed to consider the equities of the parties with an interest in the subject property. EMC argues

that the City was on notice of the mechanic’s lien case and that the City would somehow be bound

by the decision in that case. This argument is without merit. The present demolition case and the

mechanic’s lien case have been proceeding independently and the City is not a party to the

mechanic’s lien case and does not appear to have any ownership interest in the subject property.

Any adjudication of rights in the mechanic’s lien case would not affect the rights of the City with

respect to proceeding with the demolition of the subject property. See City of Chicago v. General

Realty Corp., 133 Ill. App. 2d 662, 669 (1971) (a foreclosure action between private individuals

over a specific property would not preclude the city from seeking its own action in the demolition

court to enforce its ordinances as to that property).

¶ 20 Finally, EMC argues that denying the TRO was inequitable because the City failed to

provide notice to the mechanic’s lien claimants that it was proceeding with the demolition. EMC

asserts that this was improper since the demolition would effectively extinguish the lien claimant’s

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recorded interests in the subject property. EMC has failed to cite any authority for the proposition

that the City failed to provide any lawfully required notices and has thus forfeited this argument.

Gakuba v. Kurtz, 2015 IL App (2d) 140252, ¶ 19 (arguments not supported by relevant authority

are forfeited). Moreover, the City named the lien claimants as defendants in this demolition suit

and the record indicates that the City sent notice of the hearing for the entry of the agreed order to

the lien claimants. An order entered by the trial court on May 15, 2018, stated that Global Builders

and Mace Iron Works were present in court and objected to the entry of the agreed order. Further,

the agreed order expressly provided that “due notice has been given to the parties of record to this

suit of the proposed entry of this Stipulation and Agreed Order.” As such, the lien claimants were

on notice that if construction did not recommence by June 15, 2019, then the City would have the

right to pursue demolition of the remaining improvements. For the foregoing reasons, we cannot

say that the trial court abused its discretion in denying EMC’s motion for TRO and preliminary

injunction.

¶ 21 III. CONCLUSION

¶ 22 For the reasons stated, the judgment of the circuit court of Kane County is affirmed.

¶ 23 Affirmed.

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