Xtra Corp. v. Illinois Commerce Commission

509 N.E.2d 542, 156 Ill. App. 3d 297, 108 Ill. Dec. 846, 1987 Ill. App. LEXIS 2567
CourtAppellate Court of Illinois
DecidedMay 18, 1987
DocketNo. 86—0136
StatusPublished
Cited by1 cases

This text of 509 N.E.2d 542 (Xtra Corp. v. Illinois Commerce Commission) 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
Xtra Corp. v. Illinois Commerce Commission, 509 N.E.2d 542, 156 Ill. App. 3d 297, 108 Ill. Dec. 846, 1987 Ill. App. LEXIS 2567 (Ill. Ct. App. 1987).

Opinion

PRESIDING JUSTICE QUINLAN

delivered the opinion of the court:

This is an appeal from a judgment of the circuit court of Cook County reversing an order entered by the Illinois Commerce Commission (Commission) that had approved a proposed sale of certain real estate owned by Commonwealth Edison Company (Edison) to Transamerica Transportation Services, Inc. (Transamerica).

The issue presented on appeal is whether the Commissioner’s findings were, as determined by the circuit court, against the manifest weight of the evidence and, hence, properly reversed by the trial court. For the reasons set forth below, we find that they were not and, therefore, reverse the judgment of the circuit court.

The subject matter of this appeal is Edison’s Crawford terminal site, approximately 37.5 acres of real estate, located near the intersection of 35th Street and Pulaski Road in Chicago, Illinois. Edison originally purchased the property in 1972 for its future needs. In 1982, Edison determined that it did not need the property, declaring it to be “excess.” Pursuant to a lease agreement, X-L-Company, Inc., a subsidiary of XTRA Corporation (XTRA), occupied 15 acres of the property. Subsequent to declaring the land to be excess, Edison began to look for a potential buyer. Edison offered to sell the 37.5 acres to XTRA for $3.025 million. XTRA expressed interest in the property, specifically the 15 acres currently leased, but rejected Edison’s offer. Edison also placed two ads in an industrial journal and sent letters to occupiers of nearby properties indicating that the property was for sale with an asking price of $3.28 million.

In early 1983, Edison told XTRA that no third parties were interested in the property. In February of 1983, Edison offered to sell 21 acres to XTRA for $1.8 million; the 21 acres contained the 15 acres currently leased. In the alternative, Edison offered to sell the 37.5 acres to XTRA for $2.45 million. XTRA counteroffered to purchase the 15 acres for $1 million. In March, Edison informed XTRA that it lowered its asking price for the 37.5 acres to $2.4 million. Edison also informed XTRA that another party was interested in the property. Again, XTRA renewed its million-dollar offer to purchase the 15 acres; Edison rejected the offer.

In January of 1984, Edison and XTRA commenced negotiations to renew the lease for the 15 acres. In addition to a rent increase, the final agreement contained a new provision which would permit either party to terminate the lease upon 90 days’ written notice. A copy of the new lease was executed by XTRA on May 15, 1984. Pursuant to section 27 of the Public Utilities Act (Ill. Rev. Stat. 1983, ch. lll⅔, par. 27), Edison filed a petition with the Commission seeking approval of the new lease with XTRA.

In March of 1984, Edison met with Transamerica regarding Transamerica’s possible purchase of the 37.5 acres. Transamerica is XTRA’s competitor. On March 21, Transamerica verbally agreed to purchase the property for Edison’s asking price of $2.75 million. This agreement was conditioned upon the results of soil and engineering tests, approval by Transamerica’s board of directors, and approval by the Commission. Additionally, despite this tentative agreement with Transamerica, Edison continued to negotiate the terms of the new lease with XTRA, and Edison’s representatives were instructed not to inform XTRA during the lease negotiations of the proposed sale to Transamerica. Edison and Transamerica then executed a written sale agreement on May 29.

In June of 1984, XTRA was informed by Edison’s in-house counsel of the May 29 agreement between Edison and its competitor. XTRA then submitted an offer to purchase the 37.5 acres for $2.85 million with a $50,000 cashier’s check as earnest money. This offer surpassed Transamerica’s offer by $100,000. Edison rejected XTRA’s offer based upon its agreement with Transamerica and, on July 3, filed a second section 27 petition with the Commission seeking approval of the proposed sale to Transamerica. XTRA then renewed its offer, sending Edison a new contract and a new $50,000 cashier’s check. Thereafter, XTRA filed a petition pursuant to section 27.01 (Ill. Rev. Stat 1983, ch. 111⅔, par. 27.01) for relief and seeking approval of its offer to purchase the property for $2.85 million.

The three petitions were consolidated and, subsequent to a hearing, a majority of the Commission gave the Commission’s consent and approval to the proposed Transamerica sale and the XTRA lease after finding that the sale and lease were reasonable, were in the public interest, and would convenience the public. After reviewing the record here, the majority of the Commission was of the opinion that XTRA’s rights and equities under section 27.01 were not violated in light of XTRA’s numerous opportunities to purchase the property. The majority also specifically approved an Edison accounting procedure that required that the minor loss from the proposed sale be recorded in Edison’s books so as not to affect Edison’s rates. While the Commission also observed, in its written opinion, that it naturally desired that Edison maximize the proceeds from the sale, it stated that it would not upset one transaction to encourage another for a relatively comparable amount of money. One Commissioner, while concurring with the order, stated in a separate opinion that in his judgment XTRA was guilty of extremely poor business judgment in losing a valuable piece of property, but that the “good faith” normally accompanying real estate transactions was also lacking here, and that Edison sacrificed its sense of fair dealing in order to generate income from the 37.5-acre site. Two Commissioners dissented, claiming that the majority had erred by failing to give due weight and consideration to the most fundamental reason for denying Edison’s position, i.e., that “Edison simply did not receive the ‘best possible price’ for the parcel giving due consideration to a higher competitive bid.”

XTRA filed this action in the circuit court of Cook County seeking judicial review of the Commission’s decision. The trial judge adopted the dissenting opinion filed by the two Commissioners and reversed the Commission’s order as being contrary to the manifest weight of the evidence. Specifically, the trial court found that the Commission acted contrary to the law in its consideration of the equities and rights of XTRA as a tenant in possession under section 27.01 of the Public Utilities Act (Ill. Rev. Stat. 1983, ch. 111⅔, par. 27.01). The court also said that the Commission totally disregarded the interest of the public in not securing the highest price for this property so as to ease the burden on Edison’s customers. Both the Commission and Transamerica have appealed the circuit court’s decision.

In reviewing the action taken by the Commission, the circuit court is limited to considering “ ‘whether the Commission acted within the scope of its authority, whether it made [proper] findings *** and whether constitutional rights have been infringed by the decision.’ ” (Citizens Utilities Co. v. Illinois Commerce Com. (1971), 50 Ill. 2d 35, 39, 276 N.E.2d 330, 332, quoting Produce Terminal Corp. v. Illinois Commerce Com. (1953), 414 Ill. 582, 589, 112 N.E.2d 141

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Related

Commonwealth Edison Co. v. Illinois Commerce Commission
538 N.E.2d 213 (Appellate Court of Illinois, 1989)

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Bluebook (online)
509 N.E.2d 542, 156 Ill. App. 3d 297, 108 Ill. Dec. 846, 1987 Ill. App. LEXIS 2567, Counsel Stack Legal Research, https://law.counselstack.com/opinion/xtra-corp-v-illinois-commerce-commission-illappct-1987.