Posted by: Patricia Salkin | August 17, 2009

Equitable Estoppel Doctrine Applies to Verbal Amendment of Annexation Agreement in Illinois

In September 1997, the Village of Frankfort annexed property subject to an annexation agreement with H & D Development Corporation and State Bank of Countryside. The agreement zones the property “C-4 PUD” and identifies authorized uses. The agreement remains in effect until September 2017 and states that it is applicable to the parties’ successors in interest. Plaintiff, Humphrey, purchased a portion of the property subject to the agreement in August 2005. Its proposed use is one of the authorized uses of the property. Admitting that the parties never amended the agreement, Frankfort filed an affirmative defense to Plaintiff’s complaint arguing that plaintiff’s predecessor in interest amended the agreement by subdividing the property and requesting a change in zoning. The predecessor requested a change in zoning from C-4 PUD to C-2 PUD and Frankfort granted the zoning change including the portion of property now owned by Humphrey. The change in zoning does not permit the uses set forth in the agreement. Frankfort later re-zoned the subject property again to B-4.

Frankfort claims that it relied on the predecessor’s oral request and allowed the lot to be subdivided into smaller lots which were no longer suitable for certain uses. Frankfort further argues that it is no longer bound by the original terms of the agreement due to the “effective amendment” between Humphrey and the predecessor in interest. The Village claims that Humphrey had actual or constructive knowledge of the rezoning prior to its purchase of the subject property. Seeking to enforce the written agreement, plaintiff filed a motion for judgment on the pleadings and a motion to strike Frankfort’s affirmative defense. Both motions were denied which prompted this appeal.

In response to the certified question presented to the court of whether estoppel is an available remedy in this case, the court answers that “[a] municipality may invoke the equitable doctrine of estoppel against a successor property owner’s rights under an annexation agreement in the absence of an amendment to that annexation agreement adopted either (i) in accordance with the terms of the annexation agreement itself; or (ii) in accordance with the procedures set forth in section 11-15.1-3 for amendment of an annexation agreement to the same extent that the defense would have been available against the predecessor in interest if the court determines that 1) the successor property owner is bound by the action of his predecessor in interest and either a) the successor property owner or its predecessor in interest received a benefit as a result of the conduct in question or b) the municipality relied or acted to its detriment on the conduct of the successor property owner or its predecessor in interest.”  Beyond the question of whether estoppel applied in this situation, the merits of the matter were not before the Court. 

Humphrey Property Group, L.L.C. v. Village of Frankfort, 2009 WL 1796439 (Ill. App. 3 Dist. 6/18/2009).

The opinion can be accessed at: http://www.state.il.us/court/Opinions/AppellateCourt/2009/3rdDistrict/June/3080246.pdf


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