Cnty. of Cook v. Kellogg Co.

374 F. Supp. 3d 744
CourtDistrict Court, E.D. Illinois
DecidedMarch 19, 2019
Docket16 C 3399
StatusPublished
Cited by1 cases

This text of 374 F. Supp. 3d 744 (Cnty. of Cook v. Kellogg Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cnty. of Cook v. Kellogg Co., 374 F. Supp. 3d 744 (illinoised 2019).

Opinion

JOHN Z. LEE, U.S. District Judge *747In this diversity case, Cook County ("the County") has sued Kellogg Company ("Kellogg") under Illinois law for unjust enrichment, as well as for a declaratory judgment that the County is not obligated to provide free steam heat to Kellogg. Kellogg, in turn, has countersued the County for a declaratory judgment that the County is so obligated and for breach of a covenant running with the land. The County has moved for summary judgment on its claims. Kellogg has cross-moved for summary judgment as to the County's claims, as well as Kellogg's own declaratory judgment claim. For the reasons provided below, the County's motion is denied, and Kellogg's motion is granted. Because Kellogg has not moved for summary judgment on its breach-of-covenant counterclaim, it is the only claim that remains for trial.

Facts 1

Prior to December 27, 1973, the City of Chicago ("the City") owned a municipal heating plant. Def.'s LR 56.1(b)(3)(C) Stmt. ¶ 1, ECF No. 94. On that date, the City and the County entered into an agreement entitled, "Contract for the Sale of a Municipal Heating Plant from the City of Chicago to the County of Cook" ("1973 Agreement"). Pl.'s Ex. 1, 1973 Agreement at 10, ECF No. 88-1. The County Board of Commissioners approved the 1973 Agreement on December 20, 1973. Id.

At the time of the 1973 Agreement, seventy percent of the steam output manufactured by the heating plant was used by the County for its existing facilities, while the remaining thirty percent was used by the City. Id. at 2. The County, however, planned to build and rehabilitate additional facilities that would require significantly more steam heat. Id. at 1. To service these additional facilities, the plant needed to undergo the construction of an addition as well as other improvements. Id. Given this, the City and the County agreed that it would be better for the County to possess fee title to the plant, rather than the City. Id. at 4.

In pertinent part, the 1973 Agreement provides:

1. The City will sell certain real property as legally described in Exhibit "A", to the County and that the County shall in perpetuity, or so long as the City in its sole discretion may require, furnish steam heat for the property described in Exhibit "B" presently owned by the City. The City shall have the right to receive steam heat for the existing buildings, or any other building which may be constructed by the City within the complex described in Exhibit "B".
2. The City, its successors or assigns shall have the right to receive the same quantity of steam heat servicing the property located on Exhibit "B" from the County at no cost to the City for as long as the City in its discretion shall require.
3. The right of the City to receive steam heat from the Municipal Heating Plant shall be a "covenant running with the land" for the benefit of those properties delineated in Exhibit "B".

Def.'s LR 56.1(b)(3)(C) Stmt. ¶ 2.

One of the sixteen properties listed in Exhibit "B" is a building described as "WARE HOUSE." Id. ¶ 5; 1973 Agreement, Ex. B. The warehouse is located *748south of W. 31st Street and west of Sacramento Avenue in Chicago, Illinois, on a parcel assigned PIN 16-36-100-056-0000 by the County Recorder ("Warehouse Property"). Def.'s LR 56.1(b)(3)(C) Stmt. ¶¶ 6-7.

From 1973 to 2015, the County provided steam heat to the Warehouse Property at no cost. Id. ¶ 29. During this time, various private entities owned, leased, or otherwise occupied the Warehouse Property. Pl.'s LR 56.1(a)(3) Stmt. ¶ 31, ECF No. 88. For example, the City subleased the Warehouse Property to Farley Candy Co. ("Farley") in 1992, and the sublease was recorded with the County Recorder. Def.'s LR 56.1(b)(3)(C) Stmt. ¶¶ 9-10. At some point thereafter, the City conveyed the deed to the Warehouse Property to Farley, which was succeeded by Favorite Brands International, Inc. ("Favorite Brands"). See id. ¶ 11. Favorite Brands then conveyed the deed in the Warehouse Property to Nabisco, Inc., and the transfer was recorded with the County Recorder in 1999. Id. ¶¶ 12-13. Nabisco, Inc. then was succeeded in interest by Kraft Foods Global Inc. ("Kraft").Id. ¶ 14.

Finally, in 2005, Kraft entered into an asset purchase agreement with Kellogg. And, as part of that transaction, Kraft conveyed its fee simple interest in the Warehouse Property to Keebler Company, a wholly owned subsidiary of Kellogg, by special warranty deed, which was recorded with the County Recorder in June 2005. Id. ¶¶ 15, 16.

Prior to purchasing the Warehouse Property, Kellogg learned, as part of its due-diligence inquiry, that the owner of the Warehouse Property is entitled to steam heat free of charge as in past practice with prior owners. Id. ¶ 17. Not surprisingly, this affected the purchase price. Id. ¶ 19.

To date, neither the City nor Kellogg has notified the County that steam heat is no longer required at the Warehouse Property. Id. ¶¶ 50-51. Nonetheless, the County ceased providing steam heat to Kellogg in 2015. Id. ¶ 53. On May 15, 2015, the County sent a letter demanding payment of $ 2,116,800 for steam heat the County had provided Kellogg from 2005 to 2015. Pl.'s LR 56.1(a)(3) Stmt. ¶¶ 70-71.

Legal Standard

Summary judgment is proper when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In ruling on a motion for summary judgment, a court must "view the facts in the light most favorable to the nonmoving party." Plumhoff v. Rickard , 572 U.S. 765, 134 S.Ct. 2012, 2017, 188 L.Ed.2d 1056 (2014). A district court gives the nonmoving party "the benefit of conflicts in the evidence and reasonable inferences that could be drawn from it." Grochocinski v. Mayer Brown Rowe & Maw, LLP , 719 F.3d 785, 794 (7th Cir. 2013). The Court must not make credibility determinations or weigh conflicting evidence. McCann v. Iroquois Mem'l Hosp. , 622 F.3d 745, 752 (7th Cir. 2010). "The judge must ask whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
374 F. Supp. 3d 744, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cnty-of-cook-v-kellogg-co-illinoised-2019.