BAUER, Chief Judge.
This case is before us on appeal from the district court's grant of appellee's motion for summary judgment. In the court below, appellant Lake Caryonah Improvement Association ("the Association") filed suit seeking specific performance of an alleged contract to convey a tract of land currently owned by appellee Pulte Home Corporation ("Pulte"). The court found that the Association's claim was barred by the statute of limitations and/or the doctrine of laches, and therefore granted Pulte's motion. Because we agree that the Association's claim is barred by laches, we affirm the district court's grant of summary judgment.
In 1968, the City of Naperville ("the City") annexed a 105 acre parcel of land and two years later zoned it for high density development. In 1975, the City granted Honeybee Development Company ("Honeybee") preliminary planned unit development ("PUD") approval to develop 55 of those acres. The project was called the Lake
In connection with Ordinance 76-121, Honeybee as subdivider, a land trustee as owner, and the City entered into a Statement of Intent and Agreement ("SIA"), pursuant to which the subdivider and owner agreed to develop the subdivision in accordance with the plans and supporting documents "as required by the Subdivision Control Ordinance and Planned Unit Development Ordinance." In Paragraph 7 of the SIA, the subdivider and owner agreed to convey to a property owners association certain common open space. The "common area" of Phase I property and the whole of Phase IA were among those properties designated for conveyance.
Thereafter, Honeybee constructed the multi-family development and "common area" in Phase I and the above-mentioned retention pond in Phase IA. Honeybee, however, never completed the other three phases of the LC-PUD. It went into default under its mortgage and, in November of 1980, deeded the subdivision, including Phase IA and the "common area" of Phase I, to the Central National Bank ("the Bank"). In December of 1980, the Lake Caryonah Improvement Association received a deed to and the release of the Bank's mortgage rights for the Phase I "common area," but not for the Phase IA property.
While Honeybee was having financial difficulties, the City was considering comprehensive amendments to the earlier land use ordinances. In January of 1980, the City rezoned the entire 55 acres of the LC-PUD to an R3 medium density residential classification and removed the property's PUD designation. Because R3 density was considerably less than the density contemplated by Ordinance 76-121 development of the remaining acreage under the original plan became illegal.
The Bank and its successor, the Exchange National Bank, held the subdivision, including Phase 1A, until 1986. During this time, the Bank paid real estate taxes on the property, posted "No Trespassing" and "For Sale" signs on the property, maintained the property by cutting weeds, and carried title and liability insurance on the property. In 1986, the property was sold to Howard Savings and Loan ("Howard") which paid real estate taxes for that year.
Shortly after Howard's purchase, appellee Pulte Home Corporation ("Pulte") became interested in developing a portion of the property. On October 8, 1986, Howard and Pulte entered into a contract to purchase a portion of Howard's property which included all but a small part of Phase IA. On May 18, 1987, Pulte received preliminary subdivision plat approval from the City for its proposed development of 214 townhouse units and two single-family homes. Shortly thereafter Pulte took legal title to the property. A year later Pulte received final plat approval for 88 townhouses and two single-family homes on a portion of the property. The plat also provided for a dedication of land to serve primarily as a drainage retention pond in an area correlating to, but not in the same configuration or exact location as, the Phase IA retention pond.
On April 22, 1987, the Association wrote to Howard, requesting that Howard convey the Phase IA property to it pursuant to the 1976 SIA. Howard refused. Pulte subsequently rejected the Association's demand as well. On April 21, 1988, the Association filed suit in state court seeking specific performance of Paragraph 6 of the SIA, which stated that certain properties, among which included Phase IA, would be conveyed
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). As to the Association's rights, if any, under the SIA, there is substantial legal and factual dispute. Pulte contends: (1) the SIA is not an enforceable contract; (2) the 1980 ordinance rezoning the property abrogated the 1976 SIA; (3) the Association is not the homeowners association contemplated by Paragraph 7 of the SIA; and (4) the conveyance of Phase IA to a homeowners association was dependent upon the completion of Phases II-IV. The Association, of course, contends the opposite. Although the district court had grave doubts about the enforceability of the SIA by the Association, it did not decide any of the above disputes.
The Association argues that the district court erred by applying the statute of limitations set forth in Section 13-110 of the Illinois Code of Civil Procedure to bar its claim. The statute provides, in pertinent part:
Ill.Rev.Stat. ch. 110, ¶ 13-110. The Association contends that the appropriate statute of limitations is the ten year period set forth in Section 13-206, which governs a claim for breach of a written contract. See Ill.Rev.Stat. ch. 110, ¶ 13-206.
We agree that § 13-110 is not applicable to the Association's claim. Section 13-110 bars the rights of the owner of paramount title when the holder of color of title has taken possession of the vacant land and
Be that as it may, the Association's claim is still barred by laches. Laches operates as a bar upon the assertion of a party's rights when that party has unreasonably delayed in asserting its rights so as to cause prejudice to the adverse party. Schroeder v. Schlueter, 85 Ill.App.3d 574, 407 N.E.2d 204, 41 Ill.Dec. 12 (5th Dist.1980).
Id., 407 N.E.2d at 207, 41 Ill.Dec. at 15 (citation omitted). The decision of the trial court to invoke the doctrine of laches will not be disturbed absent a clear abuse of discretion. Schroeder, 407 N.E.2d at 206, 41 Ill.Dec. at 140.
We find it hard to imagine a circumstance in which the application of laches would be more justified. The Association's delay in asserting whatever rights it may have had under the SIA is patently unreasonable. Assuming that it is the "homeowners association" contemplated by Paragraph 7, the Association, for which the Articles of Incorporation were filed on June 28, 1976, could have asked for conveyance anytime after the SIA was recorded on October 4, 1976. One such opportune time would have been during the late 1970's, when the City was holding public hearings on the proposed ordinance to rezone the LC-PUD to a medium density residential complex, thereby changing the character and intent of the earlier planned development and giving notice to the Association that its alleged rights under the original plan of development might be compromised. Another such opportune time would have been in December of 1980, after Honeybee fell upon hard times and deeded the property to the Bank. Soon thereafter, the Association received the deed to and the release of the Bank's mortgage rights to the "common area" within Phase I. Significantly, the Association did not receive similar documentation with respect to the Phase IA property and, more significantly, the Association did nothing about it. Indeed, when some members of the Association received a Phase IA tax bill in 1980, they forwarded the bill to Honeybee.
Although it could have sought conveyance anytime after 1976, the Association did not. Until 1987, it was content to let the developer and its successors-in-interest pay for the upkeep of the property, carry liability and title insurance on the property, and pay taxes on the property. The Association did not awake from its slumber until Pulte, seeking to realize a profit on the property upon which it (or its predecessors-in-interest) had paid taxes and upkeep for eleven years, set in motion plans for the property's development. Presumably, the Association would have taken a free ride for eleven more years had not Pulte begun development.
Although we have no doubt that the Association's delay in asserting its "alleged" rights was unreasonable, this delay
There is clear prejudice here. As already noted, Pulte and its predecessors-in-interest have paid taxes on the property at issue, carried insurance on the property, and maintained the property for eleven years before the Association asserted its claim. Furthermore, Pulte entered into a contract to purchase the property which included Phase IA, reasonably believing that there were no outstanding claims on the property. (The City, in fact, advised Pulte that the LC-PUD was void.) Pulte then expended considerable time and money in its efforts to develop the property, only to be stonewalled by the moss-covered claims of the Association.
The Association is asking too much, too late. Having behaved more like Rip Van Winkle than "the early bird," it now must live with the consequences. Because the Association's unreasonable delay caused prejudice to Pulte, the district court did not abuse its discretion in barring the Association's claim by laches. The decision of the district court is therefore
Lake Caryonah Improvement Assoc. v. Pulte Home Corp., 706 F.Supp. 600, 604-05 (N.D.Ill.1989).