GENE MOSIER and DONNA MOSIER, Plaintiffs-Appellants, v. THE VILLAGE OF HOLIDAY HILLS, Defendant-Appellee.
No. 2-18-0681
Appellate Court of Illinois, Second District
May 3, 2019
2019 IL App (2d) 180681
Decision Under Review: Appeal from the Circuit Court of McHenry County, No. 16-LA-149; the Hon. Thomas A. Meyer, Judge, presiding. Judgment: Affirmed.
Thomas W. Gooch III and Sabina D. Walczyk, of The Gooch Firm, of Wauconda, for appellants.
James P. Kelly and Natalie L. Pesin, of Matuszewich & Kelly, LLP, of Crystal Lake, for appellee.
OPINION
¶ 1 Plaintiffs, Gene and Donna Mosier, appeal the dismissal with prejudice of their second amended complaint against defendant, the Village of Holiday Hills (Village). We affirm.
I. BACKGROUND
¶ 3 In April 2008, plaintiffs obtained a permit from the Village to build a “garage, patio, driveway” on their property, which is located within the Village. Plaintiffs erected a metal pole barn in conformance
¶ 4 As a result of the County‘s action, on May 3, 2016, plaintiffs sued the Village for breach of contract and violation of the Consumer Fraud and Deceptive Business Practices Act (Act) (
¶ 5 After the trial court involuntarily dismissed without prejudice that complaint and the first amended complaint, plaintiffs filed their two-count second amended complaint in which they alleged as follows. Count I, for breach of an oral contract, alleged that plaintiffs met with a Village building inspector, Ray DeBosz, who informed them that they could legally build a metal pole barn if they installed a “truss load.” Plaintiffs agreed to DeBosz‘s terms, and the Village issued the permit on or about April 17, 2007.1 At no time did DeBosz inform plaintiffs that they needed to make a separate application for a permit from the County. Plaintiffs completed construction of the pole barn only to learn that they were in violation of a County ordinance. Plaintiffs alleged that the Village had misrepresented the extent of its authority, because the necessary stormwater studies and site development work had to be approved by the County. As a result, plaintiffs spent thousands of dollars defending themselves against the County‘s lawsuit. Count II alleged a violation of the Act in that DeBosz misrepresented that plaintiffs needed only to include a “truss load” on the pole barn to obtain a valid permit. Plaintiffs alleged that DeBosz‘s statement was knowingly false and was made intentionally to induce plaintiffs to build the pole barn.
¶ 6 The Village moved to dismiss the second amended complaint pursuant to section 2-619(a)(9) of the Code of Civil Procedure (Code) (
¶ 7 On July 26, 2018, the court granted with prejudice the Village‘s motion to dismiss. With respect to count I, the court ruled that DeBosz did not have actual authority to enter into contracts, but “arguably” had apparent authority to bind the Village. Nevertheless, the court found that there was no consideration for the alleged oral agreement, as plaintiffs merely paid a fee for the building permit. Further, the court found that plaintiffs got what they paid for, namely the permit. With respect to count II, the court found that the Village
II. ANALYSIS
¶ 9 Plaintiffs contend that the court erred in dismissing the second amended complaint. The Village brought the motion under section 2-619(a)(9) of the Code. Such a motion admits the legal sufficiency of the complaint but asserts that some “affirmative matter” defeats the claim. Norabuena v. Medtronic, Inc., 2017 IL App (1st) 162928, ¶ 14. An affirmative matter is something in the nature of a defense that completely negates the cause of action or refutes crucial conclusions of law or of material fact contained in or inferred from the complaint. Villanueva v. Toyota Motor Sales, U.S.A., Inc., 373 Ill. App. 3d 800, 802 (2007). We must determine whether there is a genuine issue of material fact and whether the defendant is entitled to judgment as a matter of law. Villanueva, 373 Ill. App. 3d at 802. We accept all well-pleaded facts as true, and we draw all reasonable inferences in favor of the plaintiff. Villanueva, 373 Ill. App. 3d at 802-03. We review de novo the trial court‘s dismissal of a complaint under section 2-619. Norabuena, 2017 IL App (1st) 162928, ¶ 14. Also, we may affirm a dismissal on any basis that is apparent from the record. Norabuena, 2017 IL App (1st) 162928, ¶ 14.
A. Breach of Oral Contract
¶ 11 The first affirmative matter asserted by the Village was the Village president‘s affidavit averring that DeBosz had no authority to enter into contracts on behalf of the Village. The Village also posited lack of consideration as an affirmative matter. The Village asserted, and plaintiffs do not contest, that a Village ordinance required the issuance of a building permit for the erection, construction, or alteration of any structure. The Village argued that plaintiffs’ application for the permit did not form a contract but was the fulfillment of a legal requirement.
¶ 12 The elements of a breach-of-contract action are (1) offer and acceptance, (2) consideration, (3) definite and certain terms, (4) performance by the plaintiff of all required conditions, (5) breach, and (6) damages. Village of South Elgin v. Waste Management of Illinois, Inc., 348 Ill. App. 3d 929, 940 (2004). Plaintiffs argue that the Village, through DeBosz, offered to issue a permit to construct a pole barn on their property if they included a truss load. Implicit in that offer, plaintiffs argue, was the representation that “all [plaintiffs] needed to do to build” was to obtain a truss load. Plaintiffs assert that they accepted that offer and tendered consideration when they paid the application fee for the permit. Plaintiffs maintain that they performed under the contract by building a pole barn that included a truss load. They assert that the Village, through DeBosz, breached the contract by failing to inform them that they could not build the pole barn unless the County also approved the project. Plaintiffs assert that they were damaged by having to defend themselves against the County‘s lawsuit.
¶ 13 Plaintiffs argue that DeBosz had apparent authority to enter into the contract, because they “reasonably and detrimentally” relied upon his representations. Plaintiffs also cite the court‘s comment
¶ 14 Plaintiffs and the Village both miss the mark debating DeBosz‘s authority under agency law. There is no question that he had authority to issue plaintiffs a building permit if they complied with the Village Code; however, that authority derived from the Village‘s police power. See Hartman v. City of Chicago, 282 Ill. 511, 513 (1918) (it is within the police power of a city to regulate the construction and use of buildings for the protection of the lives and safety of the citizens). Thus, the issuance of building permits is a governmental function designed to protect the public, and the charge for building permits is to offset expenses incurred by the municipality in promoting this public interest. Hannon v. Counihan, 54 Ill. App. 3d 509, 514-15 (1977). The issuance of a building permit cannot be a private matter between contracting parties, as a building permit cannot be granted in violation of a zoning ordinance. See Ganley v. City of Chicago, 18 Ill. App. 3d 248, 254 (1974). Principles of contract and agency law are inapt. In Village of Schaumburg v. Kingsport Village, Inc., 106 Ill. App. 3d 1055, 1059 (1982), Schaumburg argued that the building permits that it issued to two developers, based on the developers’ representations that their work on certain projects would be completed in accordance with all applicable building ordinances, allowed it to sue the developers for breach of contract when their work violated those ordinances. The trial court found that contract principles did not apply, and the appellate court agreed, reasoning that a building permit is “akin” to a license to do certain things within a municipality. Village of Schaumburg, 106 Ill. App. 3d at 1059. The appellate court stated that noncompliance with building permits results in monetary fines, making Schaumburg‘s breach-of-contract argument untenable. Village of Schaumburg, 106 Ill. App. 3d at 1059.
¶ 15 Plaintiffs’ reliance on Steinberg v. Chicago Medical School, 69 Ill. 2d 320 (1977), in support of their breach-of-contract argument2
evaluating his application. Steinberg, 69 Ill. 2d at 327. The trial court dismissed the complaint, but the appellate court reversed, holding that it stated a cause of action for breach of contract. Steinberg, 69 Ill. 2d at 328. Our supreme court affirmed the appellate court, holding that the catalog constituted an invitation for an offer and that the plaintiff‘s application and tender of payment was an offer to apply according to the criteria established in the catalog. Steinberg, 69 Ill. 2d at 330, 343. The defendant‘s acceptance of the application and fee constituted acceptance of the offer. Steinberg, 69 Ill. 2d at 330. The court also held that the application fee was sufficient consideration to support the agreement. Steinberg, 69 Ill. 2d at 330. Steinberg involved a bargain between private parties rather than the fulfillment of a legal obligation and is thus distinguishable from our case.
¶ 16 While there is not any Illinois case on all fours, our research disclosed the Texas case of Treviño & Gonzalez Co. v. R.F. Muller Co., 949 S.W.2d 39 (Tex. Ct. App. 1997). In Treviño & Gonzalez, the plaintiff sued R.F. Muller Company and the city of Laredo, Texas, to recover damages caused when the defendants installed a sewer line on the plaintiff‘s property pursuant to a building permit issued by the city. Treviño & Gonzalez, 949 S.W.2d at 40. The plaintiff argued that the building permit operated as a contract between the city and Muller to which the plaintiff was a third-party beneficiary. Treviño & Gonzalez, 949 S.W.2d at 40. The issue before the Court of Appeals of Texas was whether a building permit constitutes a contract between the issuing municipality and the permittee. Treviño & Gonzalez, 949 S.W.2d at 40. The court held that, when a building permit is issued, “none of the elements of a contract are present.” Treviño & Gonzalez, 949 S.W.2d at 42. “A building permit is simply a revocable and alterable license authorizing construction.” Treviño & Gonzalez, 949 S.W.2d at 42. Specifically, the court held that the “application for an issuance of a building permit does not constitute a voluntary agreement between the parties to enter into [a] binding contract.” Treviño & Gonzalez, 949 S.W.2d at 42. This is so, the court reasoned, because (1) a municipality has the power to impose restrictions and to revoke such a permit pursuant to its police powers and (2) where a municipality is required to issue a building permit to a qualified applicant, no consideration has been exchanged for the permit. Treviño & Gonzalez, 949 S.W.2d at 42. The Treviño & Gonzalez case essentially fleshes out the court‘s reasoning in Village of Schaumburg, and we adopt both cases in deciding the issue at bar. Accordingly, we hold that a building permit issued by a municipality does not create a contract between the municipality and the permittee.
¶ 17 Furthermore, even if we were to apply contract law, DeBosz did not make an offer. Plaintiffs desired to erect a structure, and they were obligated by a Village ordinance to apply for a permit to do so. In that vein also, the application fee for the permit could not have constituted
B. Violation of the Act
¶ 19 In count II of their second amended complaint, plaintiffs attempted to bring the transaction within the Act. The Act is a regulatory and remedial statute that is intended to protect consumers, borrowers, and business persons against fraud, unfair competition, and other unfair or deceptive business practices. Robinson v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 416-17 (2002). Unfair or deceptive practices include, but are not limited to, the use of any
deception, fraud, false pretense, false promise, or misrepresentation, or the concealment, suppression, or omission of any material fact with intent that others rely upon the concealment, suppression, or omission in the conduct of any trade or commerce.
¶ 20 Plaintiffs argue that the Village was engaged in trade or commerce because the issuing of building permits directly or indirectly affects the people of the state. Plaintiffs offer the example of a high rise that blocks the neighbors’ views. At oral argument, plaintiffs also argued that the Village was engaged in trade or commerce because it offered its services in evaluating the permit application and granting it. “[T]rade or commerce” must involve “advertising, offering for sale, sale, or distribution of any services and any property.” (Internal quotation marks omitted.) Chirikos v. Yellow Cab Co., 87 Ill. App. 3d 569, 577-78 (1980). The Village did not advertise or offer anything for sale or sell anything. Specifically, the Village did not sell plaintiffs a building permit but merely collected a fee for its issuance pursuant to its power to regulate the construction and use of buildings. To the extent that the Village serviced plaintiff‘s request for a permit, such service consisted of carrying out the Village‘s regulatory and statutory functions.
¶ 21 The Act does not apply to a transaction involving a municipality‘s regulatory and legal powers. See Chirikos, 87 Ill. App. 3d at 578. In Chirikos, the plaintiff alleged
¶ 22 Plaintiffs next insist, without citing authority, that we must take as true their allegations that the Village violated the Act. While well-pleaded facts are taken as true (Villanueva, 373 Ill. App. 3d at 802-03), conclusions of law or fact unsupported by specific factual allegations
are not taken as true (Lerma v. Rockford Blacktop Construction Co., 247 Ill. App. 3d 567, 571 (1993)).
¶ 23 Even were we to conclude that the Act applies, plaintiffs’ complaint is barred by the statute of limitations. The Act provides that any action for damages must be commenced within three years after the cause of action accrued.
III. CONCLUSION
¶ 25 For the foregoing reasons, the judgment of the circuit court of McHenry County is affirmed.
¶ 26 Affirmed.