2023 IL App (1st) 221380
Ill. App. Ct.2023Background
- The Village of Riverdale entered a 2012 Redevelopment Agreement with Nosmo Kings, LLC to redevelop the Riverdale Marina; section 7.2.2(a) required Nosmo to obtain the Village's written consent before conveying the property during an initial period.
- In February–May 2014 Nosmo (through agents) conveyed the Marina to agents of Shahnawaz Hasan, who then received quitclaim deeds and formed Royal Marina, Inc.; the Village refused to recognize the transfers and withheld transfer stamps and permits.
- Hasan and Royal intervened in the Village’s 2016 suit (seeking abandonment/demolition) and filed counterclaims and third‑party claims seeking mandamus, damages (tortious interference, conspiracy), quiet title, and declaratory relief that they own the Marina.
- The circuit court granted summary judgment for the Village and Village officials, concluding the Redevelopment Agreement barred Nosmo’s conveyance; the court entered Rule 304(a) language and allowed immediate appeal.
- On appeal the First District reversed: it held the RA’s transfer restriction is a promissory restraint (breachable with contractual remedies) rather than a disabling restraint that voids conveyances, and remanded for further consideration of other defenses.
- The appellate court left unresolved secondary defenses (statutes of limitation/section 13‑217, laches, Immunity Act defenses, substitution of officials) for the circuit court to address on remand because the parties had not fully briefed them below or on appeal.
Issues
| Issue | Plaintiff's Argument (Hasan/Royal) | Defendant's Argument (Village/Officials) | Held |
|---|---|---|---|
| Whether §7.2.2(a) of the Redevelopment Agreement voided Nosmo’s conveyance of the Marina | §7.2.2(a) is a promissory restraint; a breach yields contractual remedies (termination, reimbursement) but does not nullify conveyances | The RA prohibited any sale without Village consent so Nosmo had no right to transfer and any transfer is void | Reversed circuit court: §7.2.2(a) is a promissory restraint (breach, not disabling); transfer was not per se void; remanded for further proceedings |
| Whether Hasan and Royal’s counterclaims are barred by their voluntary federal dismissal and Ill. Code §13‑217 / applicable limitations | Dismissal didn’t end all state remedies; non‑damages claims and counterclaims may proceed; §13‑207 savings may preserve counterclaims | §13‑217 and limitations (and the Immunity Act’s one‑year rule for claims against local entities) bar their claims because they failed to refile within statutory time | Not resolved on merits; appellate court declined to affirm on that basis and left statute‑of‑limitations/§13‑217 issues for the trial court to decide on remand |
| Whether the Immunity Act (sections 2‑206/2‑207/2‑212/8‑101) bars relief against Village officials | Many claims seek non‑damages relief (mandamus, quiet title), which the Immunity Act does not preclude | Officials contend the Act immunizes them from the asserted conduct (denial of permits, inspections) and damages claims | Not finally decided; court noted Immunity Act may shield damages claims but non‑damages relief can still proceed; left for remand |
| Whether mandamus can proceed against an official who left office and whether laches bars relief | Plaintiffs sued officials in official capacity; successor may be substituted and mandamus remains available; laches not established on summary judgment record | Scharnhorst (ex‑official) argues mandamus moot because he left office; Village/Officials contend laches and prejudice bar relief | Court held substitution possible and declined to resolve laches on present record; left laches and related defenses to trial court discretion on remand |
Key Cases Cited
- Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill. 2d 100 (2005) (principles of contract interpretation and that legal effect of contract is question of law)
- United States v. Craft, 535 U.S. 274 (2002) (discusses property as a bundle of rights relevant to alienation)
- Baker v. Loves Park Savings & Loan Ass'n, 61 Ill. 2d 119 (1975) (restraints on alienation are generally void unless reasonable to achieve social/economic ends)
- In re Estate of Defilippis, 289 Ill. App. 3d 695 (1997) (property owner’s broad right to dispose of property)
- Washington Fed. v. Azure Chelan LLC, 195 Wash. App. 644 (2016) (no‑further‑encumbrance clause treated as promissory restraint—breach, not voiding subsequent encumbrance)
- Barragan v. Casco Design Corp., 216 Ill. 2d 435 (2005) (§13‑207 may save counterclaims from statute‑of‑limitations defense)