Hot Light Brands, L.L.C. v. Harris Realty, Inc.

912 N.E.2d 258, 392 Ill. App. 3d 493
CourtAppellate Court of Illinois
DecidedJune 23, 2009
Docket2-07-0694
StatusPublished
Cited by13 cases

This text of 912 N.E.2d 258 (Hot Light Brands, L.L.C. v. Harris Realty, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hot Light Brands, L.L.C. v. Harris Realty, Inc., 912 N.E.2d 258, 392 Ill. App. 3d 493 (Ill. Ct. App. 2009).

Opinion

JUSTICE McLAREN

delivered the opinion of the court:

Plaintiff, Hot Light Brands, L.L.C., 1 appeals from the order of the trial court entering declaratory judgment in favor of defendants Harris Realty, Inc., Harris Seven Bridges, Inc., Forest City Enterprises, Inc., Seven Bridges Development, L.L.C., and LaSalle Bank National Association, as trustee under trust No. 65033. 2 We reverse.

On March 28, 2000, Hot Light and defendants entered into an agreement to purchase real property (agreement), in contemplation of Hot Light’s purchase of an outlot in the Seven Bridges Development in Woodridge, Illinois. In July 2000, Hot Light paid defendants $915,000 for the property. The property was conveyed subject to certain covenants, conditions, and restrictions, which were attached to the trustee’s deed (many of which were also contained in the agreement). Development of the property was subject to approval by an architectural review committee (ARC). The “current members” of the ARC, appointed by defendants, were listed in article 8 of the agreement as Tom Beaulieu, Fred Petermans, Bill Wittkamper, Peter Martin (chairman), and Jack Polsky. The members were not listed in the deed. The purpose of the ARC was to ensure that improvements to the property were “constructed in a first-class manner and in a manner that is functionally and architecturally consistent and compatible with all improvements constructed within the Development.” Hot Light’s “Contemplated Improvements” and its development of the property were, “and at all times shall remain, subject to the [ARC’s] ongoing authority and rights.” The ARC’s rights included “the right to review and approve the specific uses” that Hot Light established for the property, “in furtherance of the Contemplated Use (as hereinafter defined)”; the right to determine that adequate parking was provided for “all uses established (or to be established)”; and the right to review and approve “all exterior building elevations, building materials, easement plans and plans for landscaping and signage.” In addition, “any subsequent modifications made to, or deviation from, an approved use of land or plan” was subject to “further review and approval of’ the ARC. The “Contemplated Use” of the property was defined as “the operation of a Krispy Kreme Doughnut retail store with drive-thru and delivery facilities.” The “Contemplated Improvements” were a 4,200-square-foot, one-story building with drive-through facilities, a loading and delivery zone, and related parking, walkways, landscaping, lighting, signage, and other site improvements. Hot Light then developed the property by building and operating a Krispy Kreme Doughnut shop.

On June 22, 2004, Forest City-Harris Group (FC-HG), Moser Enterprises, and Hagge Group 7 LLC formed Seven Bridges Development, L.L.C. (Seven Bridges), in order to “acquire a vacant parcel consisting of approximately 25.668 acres of land, located in the Seven Bridges Development,” develop the property “with a first-class, upscale retail, commercial and/or office development, a hotel and possibly condominiums or townhomes,” and “lease, sell, develop or otherwise manage the Property, for investment purposes.” The planned acquisition did not include the Hot Light property. Section 5.24 of the Seven Bridges operating agreement provided that, upon the conveyance of the land to the venture, “the existing architectural committee shall be disbanded as it relates to the [Seven Bridges] Property, and FC-HG will cause a new architectural review committee (‘Committee’) to he established for only the [Seven Bridges] Property” (emphases added). The new ARC was to be comprised of four members: Peter Martin (chairman) and Tom Beaulieu from FC-HG; and John Zediker and Scott Hagge from Moser. If an ARC member from either FC-HG or Moser left the committee, notice of a new appointment was to be given to the other side.

In March 2006, Hot Light executed a letter of intent to sell its property to Citibank for $2,765,000. Citibank intended to convert the doughnut shop into a bank, retaining the drive-through window. Negotiations among representatives of Hot Light, Citibank, and defendants ensued. On August 27, a meeting was held involving three of the original ARC members (Martin, Beaulieu, and Wittkamper), two representatives from Hot Light, and three representatives from Citibank. On September 1, Martin sent a letter withholding approval of the proposed changes, stating that such changes would be “a material deviation from what was planned for the Seven Bridges Development.” In addition, the letter noted that the Village of Woodridge did not think that a Citibank branch “was an appropriate use for this particular location within the Seven Bridges Development.” Hot Light asked for specific reasons for the denial of its request for approval. In a letter dated September 20, 2006, Martin informed Hot Light that, while Hot Light had failed to make a formal request for approval, the September 1 letter “may be considered the formal action” of the ARC. Citing section la of exhibit C of the trustee’s deed, the ARC found that the use of the property “as a financial services institution is a material departure from the previously granted approval for use as a doughnut store.” The ARC concluded that the requested changes “will negatively impact the traffic patterns and use of the parking spaces in the vicinity of the Property.” The denial of the request was “based in part on this belief.” The ARC’s concern was not with Citibank but with “a financial services institution occupying space that was set aside for a food services establishment.”

Hot Light filed a complaint for declaratory judgment, seeking a declaration that the ARC’s refusal to approve the changes was unreasonable, improper, invalid, and void and that Hot Light had the right to sell the property for use as a bank. The trial court found in favor of defendants. This appeal followed.

Hot Light first contends that the ARC that purported to make the decision was composed of people who lacked authority over the property. Hot Light argues that neither the agreement nor the trustee’s deed with attachments allowed defendants to unilaterally change, without notice to Hot Light, the composition of the ARC. Therefore, the trial court erred in finding that the requested changes were properly denied by the ARC. We agree.

Paragraph 8.1(a) of the agreement “informed” Hot Light that the “current members” of the ARC were Tom Beaulieu, Fred.Peterman, Bill Wittkamper, Peter Martin, and Jack Polsky. Martin’s address and telephone number were also given, as he was ARC chairman. The ARC representatives at the August 27, 2006, meeting'with Hot Light and Citibank were Martin, Beaulieu, and Wittkamper. The September 1 letter denying the requested changes was signed by Martin on behalf of the ARC. Carbon copies of the letter were sent to Beaulieu and Wittkamper, along with John Zediker and Scott Hagge.

At trial, Zediker testified that there was only one ARC, which consisted of Martin, Beaulieu, Zediker, and Hagge. Béaulieu testified regarding an e-mail from Wittkamper to Martin, sent before the August 27 meeting, regarding Hot Light’s requested changes. Hagge testified that he had never seen any document that gave the ARC named in the Seven Bridges operating agreement authority over the Hot Light property.

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Bluebook (online)
912 N.E.2d 258, 392 Ill. App. 3d 493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hot-light-brands-llc-v-harris-realty-inc-illappct-2009.