IL Appeals Court Rules that “sham” Annexation Was Invalid

This post was authored by Amy Lavine, Esq.

A “sham” annexation was struck down by the Illinois Appellate Court in a decision issued in May 2018. The court found that the Village of Bolingbrook improperly colluded with an adjacent landowner, ComEd, by arranging for the voluntary annexation of its property. This annexation was merely a pretext, however, as the village’s true intent was to extend its boundaries so that it could then commence an involuntary annexation of land owned by the plaintiff, Henry James. Because the ComEd annexation was invalid, the involuntary annexation of the plaintiff’s property could not proceed and was also deemed a nullity, as it no longer met the contiguity requirements under the annexation statute.

The court rejected the village’s argument that the court could not consider its conduct leading up to the ComEd annexation, noting that “Illinois courts have repeatedly and consistently considered evidence of subterfuge in determining the validity of a particular annexation.” In this case, the court highlighted various evidence indicating that the ComEd annexation was merely a pretext and ultimately concluded that it was “a sham transaction created exclusively for the purpose of allowing the Village to reach the James property.” As the court recounted, the village had initiated annexation discussions with ComEd and there was no evidence in the record that ComEd had any independent interest in becoming part of the village. The village attorney had also explained in a letter to ComEd that by annexing its property the village would be able to proceed with the involuntary annexation of additional properties. And additionally, the village promised in its annexation agreement with ComEd that it would not impose taxes or regulations on its property and that ComEd would be permitted disconnect from the village after as little as six months. These “clever” contingencies were unusual and as the court noted, “very telling.”

The court also found that the village approved the ComEd annexation prematurely and by doing so violated certain terms in the ComEd annexation agreement. This constituted a separate basis for finding the annexation to be invalid, and contrary to the village’s position, its subsequent fulfillment of the terms in the annexation agreement did not relate back to its earlier resolution approving the voluntary annexation.

Chicago Title Land Trust Co. v. County of Will, 2018 IL App (3d) 160713 (5/18/18).