Village of Kirkland v. Kirkland Properties Holdings Co., LLC I
2022 IL App (2d) 200780
| Ill. App. Ct. | 2022Background
- In 2003 the Village of Kirkland entered a recorded 20‑year annexation agreement covering a 114.27‑acre tract to be developed in phases; the agreement stated it was binding on "successors" and was executed pursuant to the Municipal Code.
- The original landowner sold portions of the tract: Plank Road, LLC bought part in 2011; Plank sold 34 lots to defendants KPHC I and KPHC II (KPHC), which thereafter owned lots in both phases but not the entire tract.
- Section 10 of the agreement required construction of roadways; section 14 required an irrevocable letter of credit to secure public‑improvement work for any unit/phase.
- In 2019 the Village demanded a letter of credit from KPHC proportionate to its lot ownership (approx. $357,295); KPHC refused and the Village sued for breach and specific performance.
- KPHC moved to dismiss under Ill. Sup. Ct. Rule 2‑615, arguing a successor that owns only a portion of the subject property is not bound; the trial court granted dismissal (relying on Doyle) and awarded KPHC attorney fees under the annexation agreement.
- On appeal the Second District reversed the dismissal, holding the annexation agreement (and the Municipal Code) can bind successor developers who acquire only a portion of the subject property when the agreement contemplates phased/subdivided development; the court vacated the fee award and remanded.
Issues
| Issue | Plaintiff's Argument (Village) | Defendant's Argument (KPHC) | Held |
|---|---|---|---|
| Whether a purchaser of only part of the land subject to an annexation agreement can be a "successor owner of record" bound by the agreement | The agreement and §11‑15.1‑4 show intent to bind successors; the agreement repeatedly contemplates phased/staged subdivision and proportionate obligations | Absent express language making the agreement binding on "any portion" of the subject property, successor status attaches only if one buys the entire subject property (relying on Doyle) | Reversed dismissal: purchaser of part of the tract (a successor developer) can be bound where the agreement contemplates phased/subdivided development and proportional obligations; public‑policy considerations favor enforcement |
| Whether KPHC was entitled to attorney fees under the annexation agreement after prevailing in the trial court | Village: the trial court erred — if KPHC is bound by the agreement, it is not the prevailing party and fees should be vacated | KPHC: it prevailed in the trial court and thus was entitled to fees under the agreement | Vacated fee award: because dismissal was reversed and KPHC is no longer the prevailing party, the fee award cannot stand |
| Whether specific performance (injunctive relief) to require a letter of credit remains available despite an adequate remedy at law | Section 11‑15.1‑4 expressly authorizes injunctive relief; specific performance remains viable | KPHC: damages would be adequate so equity is improper | Court: injunction/specific performance remains an available remedy under §11‑15.1‑4, so pleading such relief was proper |
Key Cases Cited
- Orland Park v. First Federal Sav. & Loan Ass’n of Chicago, 135 Ill. App. 3d 520 (1985) (public policy and statutory scheme favor enforcement of annexation agreements).
- Streams Sports Club, Ltd. v. Richmond, 99 Ill. 2d 182 (1983) (elements for a covenant to run with the land).
- La Salle Nat’l Trust, N.A. v. Village of Westmont, 264 Ill. App. 3d 43 (1994) (when benefit/obligation of covenant passes with ownership).
- Gallagher v. Lenart, 226 Ill. 2d 208 (2007) (contract/statute construed as whole; avoid absurd results).
- Foxfield Realty, Inc. v. Kubala, 287 Ill. App. 3d 519 (1997) (contract interpretation guided by reasonableness and avoidance of absurdity).