Bank of Camden v. Village of West Dunee et al

Filing 74

MEMORANDUM Opinion and Order: For the reasons stated, the Court grants the Village's partial motion to dismiss Counts I, III, and IV of Plaintiffs' third amended complaint, excluding Count IV's request for declaratory judgment regarding payment of the Village's attorneys' fee, R. 66. The Bank is dismissed as a plaintiff for lack of standing. Status hearing set for 12/9/2014 at 09:00 AM. Signed by the Honorable Thomas M. Durkin on 11/21/2014:Mailed notice(srn, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
Bank of Camden, a Tennessee banking
association, and Foreclosed Assets Sales
and Transfer Partnership,

)
)
)
)
Plaintiffs,
)
)
v.
)
)
Village of West Dundee, an Illinois
)
municipal corporation; Springhill Gateway )
LLC, and Illinois limited liability company; )
and Springhill Gateway, LLC, a Delaware
)
limited liability company,
)
)
Defendants.
)

No. 12 C 6699
Judge Thomas M. Durkin

MEMORANDUM OPINION AND ORDER
Bank of Camden (the “Bank”) and Foreclosed Assets Sales and Transfer
Partnership (“F.A.S.T.”) (collectively, “Plaintiffs”) brought this lawsuit against the
Village of West Dundee (the “Village”) and Springhill Gateway, LLC (“Springhill”)1
alleging that the Village is disproportionately distributing funds from a special
service area (“SSA”) in violation of the Special Service Area Tax Law (the “SSA
Act”), 35 ILCS 200/27-5 et seq., and a local ordinance enacted thereunder. Plaintiffs
also allege that the Village improperly enacted a moratorium and ordinance
preventing the issuance of a business license to one of their potential tenants, which
The Bank actually sued two entities named Springhill Gateway, LLC, one an
Illinois limited liability company and the other a Delaware limited liability
company. The Court refers to both entities collectively as “Springhill.” On November
26, 2012, the Court (Pallmeyer, J.) entered a default judgment against Springhill.
R. 24. The Bank was supposed to file an affidavit to prove up the amount of its
judgment on or before April 2, 2013. R. 36. To date, it has not done so.
1

1

is not a party to this complaint. Additionally, Plaintiffs allege that the Village is
improperly paying legal fees related to this litigation out of SSA funds. Presently
before the Court is the Village’s partial motion to dismiss for failure to state a claim.
R. 66. For the following reasons, the Village’s motion is granted in part and denied
in part.
Background 2
This case involves the renovation of Spring Hill Gateway Shopping Center
(the “Shopping Center”), which is located in the Village. In 2008, the Village set up
a Tax Increment Financing (“TIF”) District in order to provide Springhill with $4
million in initial funding for renovations at the Shopping Center. R. 65 ¶ 18. By
2009, the Shopping Center was facing economic problems with the renovations. Id.
¶ 19. Springhill then asked the Village to establish some other mechanism to
provide additional funding for renovations. Id.
This time, the Village decided to establish a “special service area” pursuant to
the SSA Act. Id. ¶¶ 20-22. The SSA Act generally allows a municipality to levy
additional property taxes in a specific geographic area for the purpose of providing
special services not otherwise available to the entire municipality. Id. ¶ 15. On
December

7,

2009,

the

Village

adopted

Ordinance

09-27

proposing

the

establishment of a special service area (SSA #6) and the issuance of SSA bonds in
an amount not to exceed $2.95 million. Id. ¶ 22. The SSA was formally adopted as
The Court recites the background from its prior memorandum opinion, Bank of
Camden v. Vill. of W. Dundee, 2013 WL 4052542, at *1 (N.D. Ill. Aug. 12, 2013), to
the extent applicable and includes additional facts from Plaintiffs’ third amended
complaint. These facts are accepted as true for purposes of a motion to dismiss.
2

2

Village Ordinance 10-15 on June 7, 2010. Id. ¶ 23. The same day, the Village
adopted Ordinance 10-16 providing for the issuance of SSA tax bonds, establishing
a special service pursuant to the SSA Act and reducing the principal amount of the
SSA bonds to $1.5 million. Id. ¶ 24. The SSA bonds for SSA #6 were to be repaid
through a levy of property taxes for the properties in the SSA. Id. ¶ 28.
The Shopping Center contains approximately 180,000 square feet of retail
space. F.A.S.T. owns approximately 60,000 square feet of that space (the “East
Property”). R. 65 ¶ 8. 3 The remaining 120,000 square feet of the center lies west of
the East Property (the “West Property”). Id. ¶ 9.
Notwithstanding the $1.5 million bond amount in Ordinance 10-16, the taxes
assessed upon the East Property were based on the original amount of $2.95 million
proposed in Ordinance 09-27. Id. ¶ 29. So far, $866,423 of the $1.5 million in
proceeds from the bonds has been spent. R. 65 ¶ 30. Of that $866,423, only $16,255
benefitted the East Property. Id. The Bank or any subsequent owner of the East
Property must continue paying its share of the additional property taxes through
2029. Id. ¶ 46.
In 2013, the East Property, which takes up 33% of the total square footage of
SSA #6, was responsible for 44% of the SSA tax burden and did not receive any SSA
distributions. Id. ¶¶ 31, 38. The East Property was also encumbered with a tax rate
increase associated with the SSA #6 bonds within the TIF which devalued the East
Property by $500,000. Id. ¶¶ 32, 40.

3

Plaintiffs do not allege the date F.A.S.T. became the owner of the East Property.
3

On January 28, 2014, the Salvation Army applied for a business license
to occupy approximately 25,000 square feet as a tenant of the East Property owned
by F.A.S.T. Id. ¶ 53. On February 3, 2014, approximately five business days after
the Salvation Army’s application for a business license was submitted, the Village
voted to approve a 90-day moratorium which “was intended to apply to any new
business registrations or occupancy permits for businesses selling merchandise not
classified by the Village as ‘new.’” (the “Moratorium”) Id. ¶¶ 56, 72.
On May 5, 2014, the Village amended its Zoning Ordinance prohibiting resale
stores such as the Salvation Army in the B-2 zoning district where the East and
West Properties lie. Id. ¶ 71. On or about May 9, 2014, the Village’s Business
License Commission (“BLC”) sent the Salvation Army a letter denying its
application for a business license. Id. ¶ 58. The letter was a result of a meeting
conducted by the BLC on May 6, 2014. Id. ¶¶ 59, 60. Neither the BLC meeting nor
its agenda was published or noticed. Id. ¶¶ 61-62. There are no minutes to the
meeting. Id. ¶ 63.
F.A.S.T. had an executed lease with the Salvation Army to lease
approximately 25,000 square feet of the East Property from F.A.S.T. 4 The lease was
conditional upon the Salvation Army securing a business license from the Village.
Id. ¶ 72. The Salvation Army terminated its lease with F.A.S.T. because the Village
“effectively denied Salvation Army’s business license by the passage of its zoning
amendment prohibiting resale activities in the B-2 zoning district.” Id. ¶ 73.

4

Plaintiffs do not allege the date the lease was signed.
4

On August 21, 2012, the Bank filed suit against the Village and Springhill,
alleging that the sharp disparity in disbursements between the East and West
Properties violates the SSA Act and the local ordinance. R. 1. On September 27,
2012, the Village filed a motion to dismiss the complaint. R. 13. On January 14,
2013, the case was reassigned to the undersigned judge. R. 30. On August 12, 2013,
the Court granted the Village’s motion to dismiss giving the Bank leave to amend.
R. 39.
Since the filing of the Bank’s original complaint, the Village has been
represented by the law firm of DeAno & Scarry, LLC. R. 65 ¶ 83. DeAno & Scarry,
LLC has invoiced the Village for its legal fees related to this case, and has been paid
out of the SSA #6 improvement fund established pursuant to Village Ordinances 1015 and 10-16. Id. ¶ 84.
On October 11, 2013, the Bank filed an amended complaint. R. 47. On April
11, 2014, the Village filed its second motion to dismiss for failure to state a claim. R.
57. On May 5, the Bank filed a second amended complaint naming F.A.S.T., whom
it identified as the owner of the East Property, and the Bank, whom it identified as
“the authorized agent for F.A.S.T.”. R. 61. On June 4, 2014, Plaintiffs filed a third
amended complaint, R. 65. The Village moved to dismiss Counts I, III, IV, and V 5 of

The Court will refer to the last Count of Plaintiffs’ third amended complaint as
Count V, which is mislabeled as Count VI at page 18 of their third amended
complaint.
5

Additionally, while the Village includes Count V among the counts to dismiss in the
introductory paragraph of their motion, reply, and conclusion of its reply, R. 66 at 1,
5

the third amended complaint on June 18, 2014. R. 66. On October 9, 2014, the Court
ordered additional briefing addressing issues of standing. R. 72. For the reasons
discussed below, the Village’s partial motion to dismiss is granted in part and
denied in part.
Legal Standard
A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g.,
Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th
Cir. 2009). A complaint must provide “a short and plain statement of the claim
showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), sufficient to
provide defendant with “fair notice” of the claim and the basis for it. Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007). This standard “demands more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). While “detailed factual allegations” are not required, “labels
and conclusions, and a formulaic recitation of the elements of a cause of action will
not do.” Twombly, 550 U.S. at 555. The complaint must “contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “‘A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.’”
Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal, 556 U.S. at 678). In
applying this standard, the Court accepts all well-pleaded facts as true and draws
R. 68 at 1, 14, it fails to discuss Count V in the body of either its opening brief or its
reply.
6

all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.
As a general rule, the court considers only the allegations made on the face of
the complaint when ruling on a motion to dismiss. See Fed. R. Civ. P. 12(b)(6). This
includes documents the plaintiff has attached to the complaint. Feigl v. Ecolab, Inc.,
280 F. Supp. 2d 846, 848 (N.D. Ill. 2003); see Fed. R. Civ. P. 10(c). Plaintiffs assert
federal subject matter jurisdiction in this case on the basis of diversity of
citizenship. R. 65 ¶¶ 1-6.
Analysis
I. Standing
Standing is an essential component of Article III’s case-or-controversy
requirement. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). “Although the
motion is styled as a motion to dismiss for failure to state a claim pursuant to Fed.
R. Civ. P. 12(b)(6), challenges to standing instead pertain to this court’s subject
matter jurisdiction.” Dominick v. Town of Cicero, No. 09 C 4643, 2009 WL 4506319,
at *1 (N.D. Ill. Nov. 30, 2009) (citing Am. Fed’n of Gov’t Employees, Local 2119 v.
Cohen, 171 F.3d 460, 465 (7th Cir. 1999)). Accordingly, we examine Defendant’s
motion to dismiss based on standing under Fed. R. Civ. P. 12(b)(1). Id. As a
jurisdictional requirement, the plaintiffs bear the burden of establishing standing.
Id. Because standing is “not [a] mere pleading requirement[ ] but rather an
indispensable part of the plaintiff's case, [it] must be supported in the same way as
any other matter on which the plaintiff bears the burden of proof, i.e., with the
manner and degree of evidence required at the successive stages of the litigation.”

7

Lujan, 504 U.S. at 561. Standing exists when the plaintiff suffers an actual or
impending injury, when that injury is caused by the defendant’s acts, and when a
judicial decision in the plaintiff’s favor would redress that injury. Brandt v. Vill. of
Winnetka, Ill., 612 F.3d 647, 649 (7th Cir. 2010); Booker–El v. Superintendent,
Indiana State Prison, 668 F.3d 896, 899 (7th Cir. 2012) (stating that to have Article
III standing, a plaintiff must demonstrate “(1) an injury-in-fact; (2) fairly traceable
to the defendant’s action; and (3) capable of being redressed by a favorable decision
from the court”). These are the constitutional minimums for standing to sue in
federal court. The injury-in-fact component requires an invasion of a legally
protected interest that is concrete, particularized, and actual or imminent. Kushner
v. Ill. State Toll Highway Auth., 575 F. Supp. 2d 919, 922 (N.D. Ill. 2008) (citing
Lujan, 504 U.S. at 560-61). Plaintiffs are required to demonstrate standing for each
form of relief sought. Friends of the Earth, Ind. v. Laidlaw Envtl. Servs., 528 U.S.
167, 185 (2000). There are also ‘prudential’ standing requirements, one of which is
that “the plaintiff generally must assert his own legal rights and interests, and
cannot rest his claim to relief on the legal rights or interests of third parties.”
Edgewood Manor Apartment Homes, LLC v. RSUI Indem. Co., 733 F.3d 761, 771
(7th Cir. 2013) (citing Warth v. Seldin, 422 U.S. 490, 499 (1975); Rawoof v. Texor
Petroleum Co., 521 F.3d 750, 757 (7th Cir. 2008)).
In ruling on a motion to dismiss for lack of standing, as in any motion to
dismiss, the Court must accept as true all material allegations of the complaint and
must draw all reasonable inferences in favor of the plaintiff. Lee v. City of Chicago,

8

330 F.3d 456, 468 (7th Cir. 2003) (citing Retired Chicago Police Assoc. v. City of
Chicago, 76 F.3d 856, 862 (7th Cir. 1996))
A. The Bank
The Village argues that the Bank should be dismissed for lack of standing.
Plaintiffs’ amended complaint alleges that the Bank is the “authorized agent” for
F.A.S.T. “as it relates to the [East] property,” R. 65 ¶ 7. However, Plaintiffs fail to
respond to the Village’s argument or offer any explanation of how the Bank, as
“authorized agent” of F.A.S.T., has standing. Nothing in the third amended
complaint explains how the Bank’s status as F.A.S.T.’s “authorized agent” confers
standing on it. The third amended complaint alleges that F.A.S.T.—not the bank—
owns the East Property. R. 65 ¶ 8. As the Village points out, the third amended
complaint also asserts that F.A.S.T., not the Bank, had an executed lease with the
Salvation Army. R. 65 ¶ 72. Beyond the unexplained reference to the Bank as
“authorized agent,” Plaintiffs do not allege the Bank’s ownership interest in the
property at issue in the case. It is not the Court’s responsibility to develop
arguments on behalf of the parties or root through the record for support. Autotech
Techs. Ltd. P’ship v. Automationdirect.Com, Inc., No. 05 C 5488, 2006 WL 1304949,
at *11 (N.D. Ill. May 10, 2006) (citations omitted). Plaintiffs’ failure to respond to the
argument challenging the Bank’s standing results in waiver. Jones v. Connors, 11 C
8276, 2012 WL 4361500, at *7 (N.D. Ill. Sept. 20, 2012). (“A party’s failure to respond
to arguments the opposing party makes in a motion to dismiss operates as a waiver
or forfeiture of the claim and an abandonment of any argument against dismissing

9

the claim”) (citing Alioto v. Town of Lisbon, 651 F.3d 715, 719 n. 1, 721 (7th Cir.
2011) (forfeiture occurs where the “litigant effectively abandons the litigation by not
responding to alleged deficiencies in a motion to dismiss”); Bonte v. U.S. Bank, N.A.,
624 F.3d 461, 466 (7th Cir. 2010) (“Failure to respond to an argument [in a motion to
dismiss]-as the [plaintiffs] have done here-results in waiver.”)) Accordingly, the
Court dismisses the Bank with prejudice as a plaintiff. 6
B. F.A.S.T.
In its reply brief, the Village for the first time raises the argument that
F.A.S.T. does not have standing because the third amended complaint fails to allege
that F.A.S.T. paid any of the property taxes associated with the East Property,
including the SSA or TIF taxes. Usually, arguments raised for the first time in a
reply brief are waived. PNC Bank, Nat. Ass’n v. Tyre Works-Hoffman, LLC, 1:12-CV07499, 2013 WL 678145, at *5 n.2 (N.D. Ill. Feb. 25, 2013) (citing James v. Sheahan,
137 F.3d 1003, 1008 (7th Cir. 1998)). “However, standing is a jurisdictional
requirement that is not subject to waiver.” Tyre Works-Hoffman, at *5 n.2 (citing
U.S. v. Hays, 515 U.S. 737, 742 (1995)). While the Village claims that “without these
necessary allegations, F.A.S.T. has not pled sufficient facts to establish standing on
its own behalf,” R. 68 at 4, it fails to explain how the alleged absence of these facts
precludes standing.
In their sur-reply, Plaintiffs argue that the third amended complaint alleges

Because the Court finds that the Bank does not have standing, subsequent
references to “Plaintiffs” throughout this opinion apply to F.A.S.T. only.

6

10

the “detriment [to the East Property] includes disproportionate taxes viz a viz
benefits rendered which will result in additional losses to Plaintiffs due to an
inability of Plaintiffs to sell the East Property while at the same time being
encumbered by an overinflated tax liability.” R. 65 ¶ 39. The third amended
complaint also alleges that the East Property—though not specifically “Plaintiffs,”—
paid the 2013 SSA and TIF tax bills. Id. ¶¶ 37-38. It further alleges that “SSA tax
levy and TIF levy . . . overburdened the Plaintiffs’ property with excessive taxes” and
“the . . . imposition of the TIF district upon the East Property, in addition to taxes for
SSA #6, created an overpayment obligation of the East Property.” Id. ¶ 36. While the
third amended complaint does allege that F.A.S.T. owns the East Property, id., it
does not allege when F.A.S.T. became the owner of the East Property, and thus,
whether or when F.A.S.T. paid any of the taxes levied on the East Property. Because
of those omissions, the third amended complaint does not sufficiently assert the
injury of payment of excessive taxes. However, Plaintiffs also allege another injury—
that the resale value of the F.A.S.T.–owned East Property has been adversely
affected by the improperly assessed SSA and TIF tax rates and that the violations
will continue until 2029. That allegation fares better since F.A.S.T.’s current
ownership of the property would be affected by the resale value of the property based
on the assessment of the taxes. Drawing all reasonable inferences in favor of the
plaintiffs, the Court finds their allegations sufficient to survive dismissal on the
issue of F.A.S.T.’s standing as Plaintiffs have alleged an injury with respect to the
resale value of the East Property.

11

The Village also alleges that Plaintiffs do not have standing because the
amended complaint fails to allege that the lease between F.A.S.T. and the Salvation
Army was executed “when the business license was applied for or before the
Moratorium.” R. 68 at 4. The Village asserts that on information and belief, the lease
was not signed until February 13, 2014 and was terminated by the Salvation Army
on March 11, 2014, both after the Salvation Army’s submission of its business
license application on January 28, 2014 and after the enactment of the Moratorium
on February 3, 2014. The Village also asserts that Plaintiffs do not have standing as
a potential landlord for Counts III and IV to file an action regarding the business
permit for the Salvation Army because they do not allege an injury affecting their
own legal rights. The Village claims that although the Moratorium suspended the
issuance of business licenses for resale shops for 90 days, it did not preclude
Plaintiffs from continuing to rent the property during that time period to anyone
else for any purpose other than operating a resale shop. R. 66 at 5.
F.A.S.T. claims it has in fact been injured. Relying on the third amended
complaint, F.A.S.T. asserts the following: (1) the Salvation Army applied for a
business license to occupy 25,000 square feet at Plaintiffs’ property as a tenant; (2)
F.A.S.T. had an executed lease with the Salvation Army for it to occupy the space in
the East Property, which was conditional to it securing a business license; and (3)
the Salvation Army terminated its lease with F.A.S.T. because the Village
effectively denied the Salvation Army’s business license by passing a zoning
amendment prohibiting resale uses in the B2 zoning district. R. 67 at 4-5. In

12

support, Plaintiffs cite Oxford Bank & Trust & Fifth Ave. Prop. Mgmt. v. Vill. of La
Grange, 879 F. Supp. 2d 954, 968 (N.D. Ill. 2012). In Oxford, landlords filed a § 1983
action against the village of LaGrange, among others, claiming that a zoning
ordinance that prevented a tenant from opening a pawn shop violated their federal
and state constitutional rights and common law. The Court noted, in the context of
the plaintiffs’ equal protection claim, that “[a]s the only landlords with an existing
lease affected by the zoning change, the plaintiffs had shown the zoning change had
an adverse impact on them, a necessary component of standing and injury.” Id. at
969. The court noted that although defendants argued that the tenant’s property
rights were at issue—not plaintiffs’—“it would be a stingy reading of the plaintiffs’
arguments to limit their proclaimed interest only to the de facto revocation of their
tenant’s business license. The landlords had an executed lease with a tenant . . .
and that use was permitted at the time of the lease.” Id. at 973. The Village does not
respond to this argument in its reply. Although the plaintiffs in Oxford explicitly
pled constitutional claims, relying on Oxford and accepting the allegations in
Plaintiffs’ complaint as true, the Court finds that Plaintiffs have alleged standing
based on cognizable injury—the termination of the lease. 7 Although the Village
asserts on information and belief that the lease was terminated prior to the zoning
ordinance amendment, Plaintiffs’ allege that the Salvation Army terminated its

Although Oxford was decided on a motion for summary judgment, the Court there,
viewing the facts in the light most favorable to the landlords, also found “an
existing lease,” despite the defendants’ argument that it was not in effect. Id. at 969
n. 7.

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13

lease with F.A.S.T. because of the amendment. It is premature at this stage to
resolve this issue of fact.
II. Count I
In Count I of the third amended complaint, Plaintiffs allege that SSA #6
disproportionately benefits the owner of the West Property to the detriment of the
East Property. Plaintiffs allege that the disparity between the East and West
Properties violates Article IX, section 4(a) of the Illinois Constitution, which
provides “[e]xcept as otherwise provided in this Section, taxes upon real property
shall be levied uniformly by valuation ascertained as the General Assembly shall
provide by law.” R. 65 ¶ 41. 8 Plaintiffs also allege that the Village has violated the
SSA Act and “the Ordinance.” Id. ¶¶ 44-45. Plaintiffs ask the Court to: (1) enjoin the
Village from disbursing additional money from the SSA fund until an accounting is
made; (2) order a reassessment of the East Property to ensure uniformity; (3) order
an assessment and evaluation of the TIF tax for the East Property; (4) order an
assessment and evaluation of the SSA tax for the East Property; (5) order an
accounting from the Village to determine the total amount of the SSA benefits
which have been distributed and require the Village to reallocate the proper share
of taxes between the West Property and East Property on a proportionate, rational,

Plaintiffs inexplicably assert that “the Village mistakenly characterizes the
Complaint to allege a violation of the Illinois Constitution” and that “nowhere in the
Complaint are those allegations.” R. 67 at 7 (claiming that “[t]he Village’s sleight of
hand maneuvering to divert this Court’s attention from its own wrongful acts is
transparent.”). Paragraph 41 of Plaintiffs’ third amended complaint clearly states
that the disparity between the Properties violates the Illinois Constitution. In any
event, Plaintiffs have conceded this argument.

8

14

and reasonable basis; (6) enter monetary judgment against the Village for plaintiffs
in the amount of excess of $500,000; (7) order the Village to pay Plaintiffs’ attorneys’
fees and costs. R. 65 at 9-10.
The Village moves to dismiss Count I on multiple grounds. First, the Village
argues that the claim is untimely and improper. Specifically, the Village claims
Plaintiffs in fact challenge the 2013 tax bill and calculation but failed to follow the
proper procedural steps in state court within the time period required by statute to
do so. R. 66 at 6 (citing 35 ILCS 200/23-10, 23-15(a) (West 2012) which instructs
that after preliminary payments, a party “may file a tax objection complaint under
Section 23-15 within 165 days after the first penalty date of the final installment of
taxes for the year in question.”). Additionally, the Village argues that under 35
ILCS 200/23-15(b)(1), plaintiffs cannot seek diminution of value of their property as
their tax challenge is the complete remedy under law. R. 66 at 7. Finally, the
Village argues that Count I fails to state a cause of action. Id. Because the Court
finds that the Village fails to state a claim in Count I, it will address that argument
first.
A. Failure to State a Claim
The Village asserts that Count I should be dismissed for failure to state a
cause of action and because it is unclear what is being pled. The Village argues that
Plaintiffs fail to allege wrongdoing by the Village, R. 66 at 8, and fail to cite any law
mandating taxpayers within a SSA receive equal amounts of the SSA proceeds or
amounts equal to the SSA taxes they paid.

15

As in the initial complaint, Plaintiffs’ third amended complaint and its
response to the Village’s motion to dismiss are somewhat vague on the question of
which requirements of the Act and Ordinance 09-27 are actually at issue. Plaintiffs
assert that paragraphs 43 and 44 “specifically allege the violation of the Act that
occurred from the Village’s actions.” R. 67 at 7. Paragraph 43 states that the
allegedly disproportionate distributions and incorrect taxations are unlawful
because the monies from SSA #6 have disproportionately benefitted the West
Property. R. 65 ¶ 43. Paragraph 44, referring to the manner in which SSA taxes are
levied, is identical in substance to paragraph 36 of the initial complaint. It states
that “[t]he Act requires that the special service tax must be levied and extended on
a basis that provides a rational relationship between the amount of the tax levied
against each lot, block, track, and parcel of land in the Special Service Area and
Special Services benefits rendered.” Id. ¶ 44.
Plaintiffs’ only reference to a specific requirement of the SSA Act is in
paragraph 16 of its third amended complaint, Section 27-75:
In lieu or in addition to an ad valorem property tax, a special tax may
be levied and extended within the special service area on any other
basis that provides a rational relationship between the amount the tax
levied against each lot, block, tract and parcel of land in the special
service area and the special service benefit rendered. 9
The first and third paragraphs of Section 27–75 state that “[i]f a property tax is
levied, the tax shall be extended ... in the special service area ... based on equalized
assessed values.” 35 ILCS 200/27–75. Such a tax can take the form of either “an ad
valorem tax based on the whole equalized assessed value of the property,” or, in
some instances, an ad valorem tax based on “the equalized assessed value of the
land in a special service area, without regard to improvements.” Id. An ad
valorem tax is a tax “proportional to the value of the thing taxed.” Black's Law
Dictionary (9th ed. 2009).
9

16

Plaintiffs made the same reference in their initial complaint. They offer no
new basis or theory of how the Village violates a requirement of the SSA Act. As in
their first complaint, Plaintiffs appear to read the Act to “require[s] that the special
service tax must be levied and extended on a basis that provides a rational
relationship between the amount of the tax levied against each lot, block, track, and
parcel of land in the Special Service Area and Special Services benefits rendered.”
R. 65 ¶ 44. The Court already addressed and rejected this argument in ruling on the
Village’s motion to dismiss the first complaint, and will not repeat that ruling in full
here.
In sum, Section 27-75 of the SSA is not as broad as Plaintiffs assert. Read as
a whole, it does not impose a general requirement that there be a rational
relationship between the amount of tax levied on a particular property in a special
service area and the special benefit rendered to the property. Bank of Camden v.
Vill. of W. Dundee, 2013 WL 4052542, at *2 (N.D. Ill. Aug. 12, 2013). Section 27-75
requires that taxes must be apportioned within a special service area either “based
on equalized assessed values” or “any other basis that provides a rational
relationship between the amount of the tax levied against each lot, block, tract and
parcel of land in the special service area and the special service benefit rendered.”
35 ILCS 200/27-75. As the Court previously noted, the SSA Act presumes that ad
valorem taxes based on equalized assessed values are rational, and the “rational
relationship” test comes into play if a municipality relies on some “other” basis for
apportioning taxes. Bank of Camden, 2013 WL 4052542, at *3 (citing Cnty. of Will v.
17

Vill. of Rockdale, 589 N.E.2d 1017, 1017-18 (Ill. App. Ct. 1992) (applying Section 2775’s rational relationship test where a special tax to pay for water main
improvements “was not based on assessed values of the real property” but “was
based on the percentage of front footage of each parcel to the total front footage of
the streets in the special service area”)).
The local ordinances related to the SSA #6 are consistent with apportioned
taxes based on equalized assessed values. Without citation to specific language,
Plaintiffs claim that pursuant to Ordinance 09-27, which “propos[es] the
establishment of the SSA,” a rational relationship is required between the amount
of SSA taxes levied for lands within the SSA and the benefits rendered for those
properties. However, the language in Ordinance 09-27 more closely reflects the
language in the Act that the taxes must be apportioned either “based on equalized
assessed values” or “any other basis that provides a rational relationship.”
Ordinance 09-27 states that the taxes to be levied “shall be subject to allocation,
determination, levy and extension on an ad valorem basis or, as determined by the
Municipality, on another basis (including, for example, area) that provides a
rational relationship between the amount of the tax levied against each lot . . . and
the Special Services benefit rendered.” R. 62-1, § 2(g). As the Court noted in its prior
opinion, Ordinance 10-15 “concerning the establishment of special service area
number six” and adopted by the Village after Ordinance 09-27 apportions taxes
based on equalized assessed values. R. 62-1 at 40, Ex. D, Ordinance 10-15 § 2 (“the
applicable special service area taxes (subject to allocation, determination, levy and

18

extension on an ad valorem basis against each lot, block, tract and parcel of land in
the Area) shall be and are hereby authorized . . .”).
Because the taxes are allocated on an ad valorem basis, the “rational
relationship” test that expressly applies only to taxes “in lieu of or in addition to an
ad valorem property tax” does not come into play. Ordinance 09-27 proposed the
SSA and plainly stated that the taxes to be levied would be subject to determination
on an ad valorem basis or another basis that provides a rational relationship
between the amount of taxes and benefits rendered. Plaintiffs do not explain how
that is inconsistent with Ordinance 10-15. 10 As a result, Plaintiffs’ “rational
relationship” theory does not provide a plausible claim that the Village is violating
the SSA Act or the Ordinances and therefore, Count I is dismissed. 11 The Court
previously provided the Bank with the opportunity to file an amended complaint if
it had some other theory as to how the Village was violating a requirement of the
By their language, Ordinance 09-27 is “an ordinance proposing the establishment
of Special Service Area Number Six,” Ordinance 10-15 is the “ordinance concerning
the establishment of Special Service Area Number Six,” and Ordinance 10-16 is “an
ordinance providing for the issuance of Special Service Area Number Six . . . tax
bonds.” R. 62-1 at 31, 39, and 50.
10

The Village also moves to dismiss Plaintiffs’ request for attorneys’ fees in Count I
based on Plaintiffs’ failure to cite any Illinois law or federal statute authorizing
such fees. Because Plaintiffs fail to state a claim in Count I, the Court need not
address the attorneys’ fees issue. Nonetheless, Plaintiffs fail to respond to this
argument, and therefore it is waived. Jones v. Connors, No. 11 C 8276, 2012 WL
4361500, at *7 (N.D. Ill. Sept. 20, 2012) (A party’s failure to respond to arguments
the opposing party makes in a motion to dismiss operates as a waiver or forfeiture
of the claim and an abandonment of any argument against dismissing the claim)
(citing Alioto v. Town of Lisbon, 651 F.3d 715, 719 n. 1, 721 (7th Cir. 2011)
(forfeiture occurs where the “litigant effectively abandons the litigation by not
responding to alleged deficiencies in a motion to dismiss”)). The request for
attorneys’ fees is dismissed.
11

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SSA Act or the Ordinance. R. 39. Because Plaintiffs have again failed to state a
plausible claim that the Village is violating the SSA Act or the Ordinance and have
not provided a new theory, Count I is dismissed with prejudice.
III. Count III
In Count III, Plaintiffs ask the Court to issue a writ of mandamus pursuant
to Illinois law requiring the Village Clerk to issue a business license to the
Salvation Army “in order for the Salvation Army to occupy and lease certain space
at the East Property and to cease to exercise any powers or duties with respect to
the prohibition of the Salvation Army to lease and occupy space at the East
property.” R. 65 ¶ 76.
The Village argues that Plaintiffs’ claim in Count III is not ripe because
Plaintiffs failed to exhaust administrative remedies by challenging the amendment
passed by the Village or the denial of the Salvation Army’s business license in state
court. R. 66 at 9. In response, Plaintiffs claim that the cases the Village cites are
inapplicable because they relate to parties challenging zoning ordinances and
making constitutional and property rights claims in the context of land use
disputes, while their own complaint asserts claims for mandamus and declaratory
relief. The Court need not decide that issue because even accepting Plaintiffs’
argument that their claims for mandamus and declaratory relief should not be
analyzed as property rights claims, the Court finds the Plaintiffs have failed to state
a claim for mandamus in Count III.

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“Mandamus is an extraordinary remedy to enforce, as a matter of right, ‘the
performance of official duties by a public officer where no exercise of discretion on
his part is involved.’” Lewis E. v. Spagnolo, 710 N.E.2d 798, 813 (1999) (quoting
Madden v. Cronson, 501 N.E.2d 1267 (1986)); Ahmad v. Chicago Sch. Reform Bd. of
Trustees, No. 98 C 6983, 1999 WL 965453, at *3 (N.D. Ill. Sept. 30, 1999) (“Under
Illinois law, ‘a writ of mandamus commands a public officer to perform an official,
nondiscretionary duty that the petitioner is entitled to have performed and that the
officer has failed to perform.’”) (quoting Chicago Bar Ass’n v. Ill. State Bd. of
Elections, 641 N.E.2d 525, 527 (Ill. 1994)).
Rules for pleading mandamus are the same as those applicable to actions at
law. Noyola v. Bd. of Educ. of the City of Chicago, 688 N.E.2d 81 (1997). To survive
a motion to dismiss for legal insufficiency, a complaint seeking mandamus “must
allege facts which establish a clear right to the relief requested, a clear duty of the
respondent to act, and clear authority in the respondent to comply with the writ.”
Noyola, 688 N.E.2d 86; Baldacchino v. Thompson, 682 N.E.2d 182 (1997)). If public
officials have failed to comply with requirements imposed on them by statute, a
court may compel them to do so by a writ of mandamus, provided the requirements
for mandamus have been satisfied. Park Superintendents’ Prof’l Ass’n v. Ryan, 745
N.E.2d 618, 624-27 (2001) (citing Noyola, 688 N.E.2d 81)). But mandamus is not
appropriate to regulate a course of official conduct or enforce the performance of
official duties generally. Park Superintendents’, 745 N.E.2d at 624-25 (citing In
Interest of F.B., 564 N.E.2d 173, 184 (6th Dist. 1990). “The writ will not lie when its

21

effect is ‘to substitute the court’s judgment or discretion for that of the body which is
commanded to act.’” Lewis E. v. Spagnolo, 710 N.E.2d 798, 813 (1999) (citing
Chicago Ass’n of Commerce & Indus. v. Reg’l Trans. Auth., 427 N.E.2d 153 (1981),
quoting Ickes v. Bd. of Supervisors, 114 N.E.2d 669 (1953)).
As the Village argues, Plaintiffs’ mandamus claim should be dismissed
because Plaintiffs have not alleged a “clear, affirmative right to relief” in the form of
the Salvation Army’s business license for use in the East Property—particularly in
light of the fact that the Village’s May 5, 2014 amendment made resale shops in the
B-2 zoning district a non-permitted use. Although not explicitly stated by Plaintiffs
in their response, their complaint suggests that their right to mandamus is based
on the allegation that the Business License Commission meeting on May 6, 2014
violated the Open Meetings Act, 5 ILCS 120 et seq.. That meeting resulted in the
BLC’s May 9, 2014 letter denying the Salvation Army’s application for a business
license. R. 65 ¶¶ 58-65. The Open Meetings Act has been held to empower reviewing
courts to remedy violations of the Act:
granting a[sic] relief by mandamus requiring that a meeting be open to
the public, granting an injunction against future violations of this Act,
ordering the public body to make available to the public such portion of
the minutes of a meeting as is not authorized to be kept confidential
under this Act, or declaring null and void any final action taken at a
closed meeting in violation of this Act. 12
Plaintiffs claim (without citation) that if there is noncompliance with OMA, the
court “may, if it determines a violation has occurred, grant relief by mandamus, an
injunction ordering a public body to make available minutes, or declare null and
void any action taken at a meeting,” omitting that the mandamus in the Act
specifically refers to “requiring that a meeting be open to the public.” R. 67 at 11; 5
ILCS 120/3.
12

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5 ILCS 120/3; Roller v. Bd. of Educ. of Glen Ellyn Sch. Dist. No.41, No. 05 C 3638,
2006 WL 200886, at *5 (N.D. Ill. Jan. 18, 2006). Even if that kind of relief were
practical and justified, Plaintiffs seek much more.
Here, Plaintiffs seek a mandamus for this Court to order the Village Clerk to
issue a business license to the Salvation Army to occupy and lease space in the East
Property and cease to exercise power or duties with respect to the prohibition of the
Salvation Army to do so. R. 65 ¶ at 14. Plaintiffs cite no authority in support. They
have not provided any authority which would require the Village to provide the
Salvation Army a business license or permit. Simply alleging that the Village is
responsible for the issuance of business licenses is not enough to show “a plausible
entitlement to the requested extraordinary relief.” Second Amendment Arms v. City
of Chicago, No. 10-CV-4257, 2012 WL 4464900, at *14 (N.D. Ill. Sept. 25, 2012)
(citations omitted). 13
Plaintiffs cannot show they have a clear, legal right to compel the Village to
act. 14 Count III is devoid of any other language indicating the particular law or
legal theory under which Plaintiffs seek relief and is dismissed. If Plaintiffs have
Additionally, as noted, to establish standing, a plaintiff must show redressability
of the injury if a court finds in the plaintiff’s favor. Dominick v. Town of Cicero, No.
09 C 4643, 2009 WL 4506319, at *1 (N.D. Ill. Nov. 30, 2009) (citing Lujan, 504 U.S.
at 560–61)). Brandt v. Vill. of Winnetka, Ill., 612 F.3d 647, 649 (7th Cir. 2010)
(standing exists when a judicial decision in the plaintiff’s favor would redress that
injury). It is far from clear that the Salvation Army would be permitted to operate
as a resale retailer in the face of the amendment prohibiting resale shops in the
East Property even if it were issued a business license.
13

Nott v. Wolff, 18 Ill.2d 362 (1960), which Plaintiffs cite to support their
mandamus claim, does not address the Open Meeting Act and Plaintiffs fail to
describe its applicability to their claims.

14

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some other theory as to how they are entitled to mandamus relief on Count III, they
may seek leave to file an amended complaint on or before December 19, 2014. As it
stands, Plaintiffs have not stated a plausible claim for mandamus.
IV. Count IV
In Count IV, Plaintiffs ask the Court to enter a declaratory judgment 1)
finding that the February 3, 2014 moratorium is arbitrary and unreasonable and
does not apply to the Salvation Army; and 2) declaring the legal fees for the
Village’s attorney related to this matter not be reimbursed through the SSA #6
improvement fund.
A. Moratorium
The Village argues that Plaintiffs’ claim for declaratory judgment about the
applicability of the Moratorium is moot because, by its terms, the Moratorium
already expired on May 5, 2014. Plaintiffs argue that their claim is not moot
because it is unclear whether the Moratorium has in fact terminated. Specifically,
Plaintiffs argue that the Moratorium may not have been terminated because it was
not adopted by way of an official ordinance nor is there a Village ordinance or
resolution reflecting the Moratorium’s expiration.

Plaintiffs cite no authority for

their argument that the Moratorium might still be in effect.
When circumstances change during litigation such that there is no longer any
case or controversy, the case is moot. Ovadal v. City of Madison, Wis., 469 F.3d 625,
628 (7th Cir. 2006) (citing Powell v. McCormack, 395 U.S. 486 (1969)). In this case,
Plaintiffs filed the third amended complaint after the expiration of the Moratorium,

24

so their claims with respect to its application are moot now as they were when filed.
The relief that Plaintiffs seek would have no legal effect now that the Moratorium
has expired. Those claims are dismissed as moot.
B. Attorneys’ Fees
The Village disputes Plaintiffs’ claim seeking a declaratory judgment that the
legal fees for the Village’s attorney not be reimbursed through the SSA #6
improvement fund. The Village argues that the disbursement agreement for SSA #6
allows for the use of SSA funds for “legal,” among other things, and therefore the
Village is entitled to use the funds for legal expenses. R. 66 at 14. In the
introduction to their response, Plaintiffs state that “Exhibit B to Ordinance 10-16
does not permit SSA proceeds to be used for reimbursement (3rd Am. Compl. ¶¶ 9293), thus prohibiting the Village to reimburse its attorneys in this litigation.” R. 67
at 1, 3. Also in the third amended complaint, Plaintiffs allege that the attorneys’
fees are impermissible reimbursements according the Exhibit B to Ordinance 10-16.
Exhibit B, in its description of the special services, states that the bond proceeds
“shall be applied only to new acquisition, construction and installations and not to
any reimbursements.” R. 62-1 at 74.
While, as the Village argues, article one of the disbursement agreement
states that SSA #6 funds may be used for “(vii) design, legal, finance and
administration,” R. 62-1 at 98, Ex. L, Art. 1 § 1.01, it also states that the funds
should “exclud[e] reimbursements” within the Shopping Center of facilities and
improvements for that same category of items, including legal. Id. Reading the third

25

amended complaint in the light most favorable to the Plaintiffs and based on the
additional language included in the ordinances and their exhibits attached to the
complaint, the Court finds it premature to dismiss Plaintiffs’ claims regarding the
attorneys’ fees on the basis that the Village sets forth. A motion to dismiss is not the
proper stage to decide these issues. Russo v. Bank of Am., N.A., No. 14 CV 382, 2014
WL 3811116, at *7 (N.D. Ill. Aug. 1, 2014) (declining to resolve ambiguities, as a
matter of law, at the motion-to-dismiss stage) (citing Dawson v. Gen. Motors Corp.,
977 F.2d 369, 373 (7th Cir.1992) (“If the language of an alleged contract is
ambiguous . . . , the interpretation of the language is a question of fact [that the
trial court] cannot properly determine on a motion to dismiss.” (quoting Quake
Constr., Inc. v. Am. Airlines, Inc., 141 Ill.2d 281 (1990))). 15 As such, the Village’s
motion to dismiss Count IV is granted except as to the claim for a declaratory
judgment regarding attorneys’ fees. 16

Count V of Plaintiffs’ third amended complaint seeks to enjoin and restrain the
Village from paying its attorneys’ fees to the Village’s attorneys from the SSA #6
fund. R. 65 at 19. As noted, while the Village stated in the introduction to its motion
that Count V was among those it sought to dismiss, R. 66 at 1, the Village fails to
name or discuss Count V in the body of its motion or reply. However, even if the
Village had included Count V by name or discussed it in the context of Count IV
which also addressed whether legal fees may be paid out of the SSA #6 fund, the
Court would not dismiss Count V for the same reason that it denies dismissal of
that aspect of Count IV.
15

The Village states that Plaintiffs complain in both Counts III and IV about the
Village’s use of SSA #6 funds to pay legal expenses, R. 66 at 14, R. 68 at 2, however
Count III does not mention that argument and Plaintiffs fail to cite any specific
section of the third amended complaint in support of their statement. Id.

16

26

Conclusion
For the reasons stated, the Court grants the Village’s partial motion to
dismiss Counts I, III, and IV of Plaintiffs’ third amended complaint, excluding
Count IV’s request for declaratory judgment regarding payment of the Village’s
attorneys’ fee. R. 66. The Bank is dismissed as a plaintiff for lack of standing.

ENTERED:
Honorable Thomas M. Durkin
United States District Judge

Dated: November 21, 2014

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