Next Door Storage, LLC v. DSW Enterprises, LLC

2023 IL App (3d) 200303-U
CourtAppellate Court of Illinois
DecidedMay 5, 2023
Docket3-20-0303
StatusUnpublished

This text of 2023 IL App (3d) 200303-U (Next Door Storage, LLC v. DSW Enterprises, LLC) 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
Next Door Storage, LLC v. DSW Enterprises, LLC, 2023 IL App (3d) 200303-U (Ill. Ct. App. 2023).

Opinion

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

2023 IL App (3d) 200303-U

Order filed May 5, 2023 _____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

NEXT DOOR STORAGE, LLC, and WOLF ) Appeal from the Circuit Court ROAD STORAGE, LLC, ) of the 12th Judicial Circuit, ) Will County, Illinois, Plaintiffs-Appellees and ) Cross-Appellants, ) ) v. ) Appeal No. 3-20-0303 ) Circuit No. 10-L-393 ) DSW ENTERPRISES, LLC; DANIEL S. ) WHEATON; KEITH J. WARPINSKI; and ) WHEATLAND STORAGE, INC., ) ) Honorable Defendants-Appellants and ) Roger D. Rickmon, Cross-Appellees. ) Judge, Presiding. _____________________________________________________________________________

JUSTICE DAVENPORT delivered the judgment of the court. 1 Justices McDade and Brennan concurred in the judgment. _____________________________________________________________________________

ORDER

¶1 Held: The trial court’s determination that plaintiffs failed to prove their damages was against the manifest weight of the evidence. The amount of attorney fees awarded to plaintiffs was reasonable. Plaintiffs are entitled to their reasonable attorney fees

1 This case was originally assigned to a different panel, and oral arguments were heard on December 7, 2021. On December 23, 2022, the case was reassigned to the current panel, which has listened to the oral arguments. incurred in relation to this appeal. Affirmed in part, reversed in part, and remanded with directions.

¶2 This appeal and cross-appeal—the second appeal and cross-appeal in this case (see Next

Door Storage, LLC, v. DSW Enterprises, LLC, 2019 IL App (3d) 160473-U)—arises out of a

breach-of-contract claim involving the sale of a storage business and the land upon which it

operated. We must determine whether the trial court erred, on remand from our prior order, when

it (1) found plaintiffs, Next Door Storage, LLC, and Wolf Road Storage, LLC, failed to prove their

breach-of-contract damages; (2) awarded plaintiffs, under an indemnity provision in the parties’

contract, $410,557.80 in attorney fees; and (3) denied defendants, DSW Enterprises, LLC, Daniel

S. Wheaton, Keith J. Warpinski, and Wheatland Storage, Inc., fees under a prevailing-party fee-

shifting provision in the contract. For the following reasons, we affirm in part, reverse in part, and

remand for the trial court to award plaintiffs their reasonable attorney fees incurred in connection

with this appeal.

¶3 I. BACKGROUND

¶4 The litigation in this case was protracted and has produced a record exceeding 4000 pages.

Though the issues on appeal are limited, we set forth additional facts to provide context to the

parties’ contentions, borrowing from our prior decision.

¶5 A. The Land

¶6 The land at issue is located in unincorporated Will County. It consists of two separate,

adjacent tracts, each having its own property index number (PIN). The southern tract is

approximately 5 acres, and the northern tract is approximately 2½ acres. At the time of the sale,

the southern tract was improved by eight self-storage buildings, a small office building, and 54

gravel parking spaces for outdoor recreational vehicle (RV) storage. The northern tract was

unimproved. 2 ¶7 At all pertinent times in this matter, there existed a county lot-coverage ordinance. Under

the ordinance, impervious lot coverage (i.e., buildings and paved areas, including gravel) is limited

to 50%. A property owner can obtain an administrative variance from this limit, up to 60%. A

formal variance, which requires full county board approval, is required to obtain lot coverage

exceeding 60%.

¶8 B. Defendants’ Purchase and Development of the Land

¶9 In 1999, Wheaton, a general contractor, and Warpinski, a commercial real estate broker,

purchased the two tracts and later decided to develop a self-storage facility. In 2000, they engaged

Geotech, Inc., to develop construction plans. The plans contemplated 11 self-storage buildings,

driveways, and parking lots on the southern tract and a single 12,000 square foot building and

parking lot on the northern tract. If completed, the northern and southern tracts would have 23.12%

and 66.30% lot coverage, respectively. However, the southern tract “borrowed” lot coverage from

the northern tract, and the tracts combined had approximately 50% lot coverage, as to comply with

the lot-coverage ordinance.

¶ 10 The county approved the plans, rezoned the land to “I1” (industrial), and issued a special-

use permit that allowed the operation of a self-storage business on the property. Thereafter, the

county treated the two tracts as one lot for purposes of zoning, including the lot-coverage

ordinance. Defendants developed the land but constructed only eight self-storage buildings and a

separate, small office building on the southern tract, leaving the northern tract unimproved.

Wheatland began operating the storage business in 2000, after the first buildings were constructed.

At some point, it began renting gravel parking spaces for outdoor RV storage where the three

never-built self-storage buildings were laid out in the plans.

3 ¶ 11 In 2004, defendants received notice from the county’s land use department that outdoor

storage was not permitted on the land. In response, defendants obtained a temporary special-use

permit allowing outdoor storage, which expired on June 1, 2005. Defendants continued outdoor

storage after the permit expired but never received any additional notices of violation regarding

outdoor storage or other aspects of the development.

¶ 12 C. Defendants’ Sale of the Land to Plaintiffs

¶ 13 Beginning in 2007, Wheaton and Warpinski explored options for further developing or

selling the property. They engaged Geotech to prepare construction plans for the northern tract. In

March 2008, Geotech delivered final construction plans to Wheaton and Warpinski. The plans

contemplated a 27,200 square foot building and parking on the northern tract with 64.32% and

66.30% lot coverages on the northern and southern tracts, respectively. Combined, the tracts would

have 65.65% lot coverage, meaning a formal variance would be required to go forward with the

plans.

¶ 14 Defendants placed a sign on the northern tract, advertising the planned 27,200 square foot

building, which could be either bought or leased and used as office, retail, or warehouse space.

But defendants never sought formal approval of the plans. Instead, they marketed the land and

self- and outdoor-storage business for sale. They listed each tract separately, assigning prices of

$3.5 million to the southern tract and $700,000 to the northern tract. Warpinski assumed the tracts

could be sold separately because the tracts had separate PINs. He did not, however, investigate

potential problems that would arise from separately selling the tracts. At trial, Warpinski said he

and Wheaton were marketing the property in any way that could generate interest in it.

¶ 15 In September 2008, plaintiffs’ principal, Phil Murphy, and his father, Jack Murphy, took

interest. According to Phil, all options were on the table—buy both tracts together or either tract

4 separately. In an email dated September 1, Warpinski told Phil, “We have built 48000 sq ft with

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2023 IL App (3d) 200303-U, Counsel Stack Legal Research, https://law.counselstack.com/opinion/next-door-storage-llc-v-dsw-enterprises-llc-illappct-2023.