Department of Transportation v. Anderson

No. 3-07-0877

_________________________________________________________________
Filed July 8, 2008
IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2008

DEPARTMENT OF TRANSPORTATION, ) Appeal from the Circuit Court
STATE OF ILLINOIS ) of the 10th Judicial Circuit,
) Peoria County, Illinois,
Plaintiff-Appellee, )
)
v. )
)
LEROY W. ANDERSON, )
)
Defendant-Appellant, )
)
and ) No. 07-ED-2
)
SPEEDWAY SUPERAMERICA LLC, a )
Delaware limited liability )
company, as successor to Emro )
Marketing Company, a Delaware )
corporation; EDWARD T. )
O’CONNOR, III, Peoria County )
Treasurer; UNKNOWN OWNERS AND )
NONRECORD CLAIMANTS, ) Honorable
) Joe Vespa,
Defendants-Appellees. ) Judge, Presiding.
_________________________________________________________________

JUSTICE LYTTON delivered the opinion of the court:
_________________________________________________________________

Plaintiff Illinois Department of Transportation (Department)

filed a complaint for condemnation of a parcel of property owned by

defendant Speedway Superamerica LLC (Speedway). Speedway and

defendant Leroy Anderson, as an interested party, filed a traverse

and motion to dismiss, which the trial court denied. On appeal,
Anderson contends that the trial court’s quick-take order must be

reversed because the Department neglected to provide him with

statutory letters of notice and failed to negotiate in good faith

prior to filing its complaint. We affirm.

In 1971, Anderson owned a parcel of land along Illinois Route

40 which Marathon Oil Company (now known as Speedway) wanted to

purchase for use as a gas station. The parties entered into an

option to purchase, contingent upon Speedway securing an access

permit to Route 40 from the Department. The Department refused to

issue Speedway a permit unless Speedway agreed to sell the State a

52-foot strip off the east end of the property for future widening

of Route 40. As a result of Speedway’s negotiations with the

Department, Speedway and Anderson entered into an "Option to

Purchase Amendment." The amendment stated that Anderson agreed to

convey an additional 52 feet on the west side of the parcel in

consideration for which Speedway would pay to Anderson the price of

the 52-foot strip on the east side of the parcel when the

Department acquired the strip at a later date.

Anderson subsequently conveyed the entire parcel, including

the additional 52-foot strip at the west end, to Speedway by

warranty deed with no reservations. The option to purchase

amendment was not incorporated in or attached to the deed.

In 1993, the Department made plans to widen Route 40. At that

time, Anderson recorded an affidavit with the recorder of deeds

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office, which referenced the August 1971 option to purchase

amendment and indicated that it was being filed to provide notice

"of the interest claimed by [Anderson] in any proceeds."

One year later, the Department began developing preliminary

engineering plans for the project. The plans provided for the

Department to acquire the entire Speedway parcel, not just the

easterly 52-foot portion. In 1997, the Department appraised the

Speedway parcel and made an offer of $352,500. The offer included

acquisition of the store building. Speedway rejected the offer.

In March 2004, the Department engineers completed the "pre-

final" engineering plans for the project. The plans and plats

showed the Department needed to acquire the entire parcel from

Speedway. In April of 2004, the Department appraiser Randy Neff

viewed the parcel and submitted a written appraisal valuing the

property at $643,000. Searle contacted Speedway and advised the

company that the Department had completed its appraisal and would

soon make an offer. Speedway closed the station in June 2004.

Between April 2004 and May 2005, when the offer was finally

submitted, there were numerous conversations and negotiations

between the parties. Department acquisition specialist Rhonda

Searle testified that she negotiated with Speedway and kept a log

of all contacts. Although she discussed Anderson’s interest with

the Department’s title company, the Department was "not sure what

Anderson’s interest was." Searle said she was instructed to obtain

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a quit claim deed from Anderson once the offer was accepted.

The Department finally transmitted an offer to Speedway for

$643,000 on May 2, 2005. The offer provided for the acquisition of

the Speedway parcel by dedication rather than fee simple title and

showed the highest and best use as a convenience store/gas station.

The offer included a quit claim deed from Anderson to the State.

However, Searle did not transmit the offer or a quit claim deed to

Anderson.

In October of 2006, the Department reappraised the property.

The revised report appraised the property at $379,000. The

Department sent an offer to Speedway in the revised amount. The

new offer included acquisition of the station, but did not include

a quit claim deed from Anderson to the State. Unlike the 2005

offer, the offer and appraisal indicated that the highest and best

use of the land was as a vacant lot. Speedway refused the offer,

and the two parties failed to reach an agreement.

The Department sent a letter to Anderson in January of the

following year, requesting that Anderson sign an enclosed quit

claim deed to the State. The letter did not include a copy of the

appraisal or statement of the basis of compensation. Anderson

declined to execute the quit claim deed.

In April 2007, the Department filed its complaint for

condemnation along with a motion for immediate vesting of title

under the "quick-take" provisions of the Eminent Domain Act (Act)

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(735 ILCS 30/20-5-5, 25-7-103.1 (West 2006)). Anderson and

Speedway both filed traverses and motions to dismiss. Anderson’s

traverse was based on the Department’s failure to provide statutory

letters pursuant to sections 10-5-15(c) and 10-5-15(d) of the Act

(735 ILCS 30/10-5-15(c),(d) (West 2006)) and the Department’s

failure to negotiate in good faith prior to filing its condemnation

complaint.

At the hearing on the quick-take and traverse motions, the

trial court heard argument on Anderson’s motion and indicated that

he would deny the motion. At the close of the evidentiary hearing,

the court set the matter over for closing arguments without ruling

on either the traverse issue of good faith negotiations or the

issue of preliminary just compensation. On the date set for

argument, the Department and Speedway indicated that they had

reached an agreement as to preliminary just compensation in the

amount of $500,000. An order was entered, over Anderson’s

objection, denying both traverses and motions to dismiss and fixing

preliminary just compensation in the amount of $500,000. Anderson

filed an interlocutory appeal pursuant to Supreme Court Rule

307(a)(7). 166 Ill. 2d R. 307(a)(7).

ANALYSIS

I.

Anderson first argues that he is an "owner" within the meaning

of the Act and that the Department’s failure to provide him with

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the statutorily required letters is fatal to the Department’s

condemnation complaint.

Under section 10-5-15 of the Act, the condemnor must first

contact and advise the "property owner" of the proposed land

acquisition and then send a letter "to the owner of the property"

at least 60 days before filing a condemnation complaint informing

the owner of any appraisal and the basis of compensation. 735 ILCS

30/10-5-15(c),(d) (West 2006). The term "owner" is not defined in

the Act.

In general, ownership is described as "the collection of

rights allowing one to use and enjoy property, including the right

to convey it to others." Black’s Law Dictionary 1131 (7th ed.

1999). Under common law, ownership is not restricted to mere

title. However, there are certain minimum elements that must be

present for a person to be considered an owner of property. Mason

v. Rosewell, 107 Ill. App. 3d 943 (1982). An owner can include one

who has control or occupation of the land although not being the

record titleholder, but that person must possess the rights to

control and enjoy the property. Wheaton College v. Department of

Revenue, 155 Ill. App. 3d 945 (1987). The primary elements of

ownership are the rights of possession, use and enjoyment, the

right to change or improve the property, and the right to alienate

the property. Wheaton College, 155 Ill. App. 3d 945.

Anderson argues that he is an "owner" based on the 1971 option

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to purchase amendment and the affidavit he recorded in 1993.

Neither of these documents gives him an ownership interest in the

property.

First, the option to purchase amendment concerned an agreement

between Anderson and Speedway that, in the event the Department

acquired the eastern 52-foot portion of the property, Speedway

would remit the compensation it might receive from the State for

that portion of the property to Anderson. That agreement was not

recorded. Two months later, in October 1971, Anderson conveyed the

entire parcel of property to Speedway by warranty deed. The

warranty deed does not reference or incorporate the amendment to

the option. The deed does not contain a reservation of any

ownership or other interest in Anderson. Thus, Anderson cannot

assert ownership of the 52-foot section. In re Marriage of Kendra,

351 Ill. App. 3d 826 (2004) (execution of warranty deed, without

reservations, extinguishes all ownership rights in real property);

see also Brown v. Lober, 75 Ill. 2d 547 (1979).

Second, the affidavit filed in 1993 merely recited that

Anderson had an interest in the proceeds of the sale. It did not

state that Anderson held an ownership interest in the eastern

portion of the parcel. Thus, the affidavit does not give Anderson

an ownership interest in the property.

Moreover, Anderson is not an owner under common law.

Regardless of actual title, Anderson does not possess, use or

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otherwise control the property. See Wheaton College, 155 Ill. App.

3d 945. All that he possesses is a potential interest in any

condemnation proceeds that might be received by Speedway.

Anderson conveyed the entire parcel of real property,

including the eastern portion, to Speedway by warranty deed.

Consequently, he is not an owner of the property for purposes of

the Act, and the Department was not required to negotiate with him

prior to filing its complaint.

II.

Next, Anderson argues that even if he is not an owner, he

still has standing, as a "party interested" in the equity of the

property, to assert that the Department breached its common law

duty to negotiate in good faith. Anderson bases his argument on

section 10-5-10(a) of the Act, which provides that a condemnation

complaint may be filed when, among other things, the compensation

to be paid for the property "cannot be agreed upon by the parties

interested." 735 ILCS 30/10-5-10(a) (West 2006).

An interlocutory appeal from an order denying a traverse and

motion to dismiss is authorized by Supreme Court Rule 307(a)(7)

(166 Ill. 2d R. 307(a)(7)) and is limited to the three issues

delineated in subsection 20-5-10(b) of the Act. Department of

Transportation v. 151 Interstate Road Corp., 209 Ill. 2d 471

(2004); Southwestern Illinois Development Authority v. Vollman, 235

Ill. App. 3d 32 (1992). Those three issues are (1) whether the

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plaintiff has the authority to exercise the right of eminent

domain, (2) whether the property sought by plaintiff is subject to

exercise of the right of eminent domain, and (3) whether the right

of eminent domain is being properly exercised in the proceedings.

735 ILCS 30/20-5-10(b) (West 2006). Good faith negotiations are

part of the larger issue of the propriety of exercising eminent

domain power. Department of Transportation v. Hunziker, 342 Ill.

App. 3d 588 (2003). Thus, an attempt to reach an agreement with a

property owner is a condition precedent to the exercise of the

right of eminent domain. 151 Interstate Road Corp., 209 Ill. 2d

471.

For a party to have standing, the party must suffer some

injury in fact to a legally cognizable interest and must have

sustained, or be in immediate danger of sustaining, a direct injury

as a result of the complained-of conduct. Brockett ex rel.

Brockett v. Davis, 325 Ill. App. 3d 727 (2001). That a party may

suffer in some abstract way will not suffice; there must be a

direct injury to his property or rights. Brockett, 325 Ill. App.

3d at 730-31.

In this case, Anderson attempts to raise a challenge to the

third issue under section 20-5-10(b), claiming that the Department

failed to properly exercise its right of eminent domain because it

did not negotiate with Speedway in good faith. However, Anderson

lacks any basis to challenge the propriety of the negotiations

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between the Department and the land owner concerning the amount of

compensation for property in which he has no claim of ownership.

See 151 Interstate Road Corp., 209 Ill. 2d 471. According to the

statute, the State is only required to conduct good faith

negotiations with the "owner of the property." 735 ILCS 30/10-5-

15, 20-5-10(b) (West 2006). As we have previously determined,

Anderson does not have an ownership interest in any portion of the

real estate at issue. Thus, Speedway was the only party with whom

the Department was required to negotiate before filing an eminent

domain complaint. The Department did negotiate with Speedway, and

the parties were unable to reach an agreement.

In effect, Anderson is attempting to assert the arguments

raised by Speedway in its traverse and motion to dismiss. Speedway

has not appealed from the trial court’s ruling, and Anderson does

not have a legally cognizable right to pre-filing negotiations.

Accordingly, Anderson lacks standing to challenge or seek review of

the propriety of the negotiations between the Department and

Speedway prior to the eminent domain action.

III.

Anderson also claims that his status as an "interested party"

in the property precluded the trial court from entering an order

for preliminary just compensation based only on the agreement

between the Department and Speedway.

Quick-take is a proceeding within an eminent domain

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proceeding, whereby title and possession to property is placed in

the State prior to a final determination of just compensation.

Department of Public Works and Buildings v. Dust, 19 Ill. 2d 217

(1960). It is a means to prevent delays to public projects and to

protect the rights of a land owner, by allowing the issue of

compensation to be litigated at a later date. 151 Interstate Road

Corp., 209 Ill. 2d at 478-79. Before a trial court may enter an

order awarding title and preliminary compensation, there must be a

finding in a quick-take hearing that the plaintiff has the right to

take the subject property by eminent domain. Dust, 19 Ill. 2d at

219; 735 ILCS 30/20-5-10(b). Interlocutory appeals from quick-take

hearings are limited to the three issues listed in section 20-5-

10(b). Vollman, 235 Ill. App. 3d at 36. All other issues,

including compensation, are subject to appeal only at the

conclusion of the eminent domain proceeding. Vollman, 235 Ill.

App. 3d at 36.

Anderson’s interest is limited to a contractual percentage of

the amount of final compensation to be paid by the Department to

Speedway, the property owner. Based on the option to purchase

amendment, Anderson possesses an interest in the proceeds that

might be paid to Speedway and the potential value of the 52-foot

parcel of real estate described in the amendment. Where, as here,

an interested party merely has a stake in a portion of the

condemnation proceeds, that party’s rights to those proceeds

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attaches only after the amount of just compensation has been

determined by the court. See Vollman, 235 Ill. App. 3d 32. In

this case, the issue of just compensation has yet to be determined,

and Anderson may not seek review of the issue of the propriety of

the amount of the preliminary just compensation in an interlocutory

appeal.

CONCLUSION

The judgment of the circuit court of Peoria County is

affirmed.

Affirmed.

CARTER, J., and MCDADE, PJ., concurring.

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