A federal appeals court found no errors in a lower court’s ruling in a suit that claimed, among other things, that the village of Park Forest took racially motivated action against a townhome complex.
Both sides appealed the ruling in the case, in which Thorncreek Apartments and Thorncreek Management sued the village of Park Forest and several village officials. A three-judge panel from the U.S. Seventh Circuit Court of Appeals described the original filing as “sprawling,” with Thorncreek claiming state and federal civil rights violations, equal protection and due process violations and conspiracy. The claims were divided into three groups and tried before a jury over the course of 13 days.
Stephen R. Miller | Robbins Schwartz
The complex that was originally Thorncreek was divided by majority owner David Clapper into three separate limited liability corporations, Thorncreek I, II and III. In 2007, Clapper’s company sold Thorncreek I, creating a problem for itself because the single leasing office for the entire complex was located there. The company applied to the village for a conditional use permit that would allow it to move the leasing office to a vacant townhome in Thorncreek II, but did not wait for village approval to begin operating the new office.
The village cited Thorncreek II for zoning violations and operating without the required permit, and a few months later filed a suit in state court to stop the complex from operating from the unpermitted office. Thorncreek II responded by filing suit against the village and 10 officials in 2008, claiming civil rights violations, and Thorncreek III soon followed. After Fannie Mae filed foreclosure notices against the two complexes, Thorncreek I filed its own federal civil rights suit.
Thorncreek accused village officials of harassment based upon their personal dislike of Clapper and upon animus towards the complex’s residents, many of whom are black. The companies said this animosity drove the village to deny its application for a business license, interfere with operations, refuse to grant the conditional use permit, fail to issue a certificate of occupancy and unequally force electrical upgrades.
“The basic theory of the case was that the defendants caused Thorncreek’s mortgage default and foreclosure by singling it out for unfair regulatory action (and inaction) based on irrational animus against Clapper and racial bias against its black residents,” the appellate court wrote.
The state court found the village and Village Manager Tom Mick liable for a class-of-one equal-protection violation and found Mick and Director of Community Development Larrie Kerestes liable on a charge of conspiracy. All other charges were cleared. The jury awarded more than $2 million to Thorncreek II, but only $1 each to Thorncreek I and III. It also awarded punitive damages of $5,000 against Mick and $1,000 against Kerestes, and awarded Thorncreek about $476,000 in attorney fees and costs.
Both sides appealed. Thorncreek asked for a new trial on the issue of damages, which was denied, and for prejudgment interest on the $2 million, which was granted. Kerestes argued successfully that the jury’s verdict against him on the conspiracy claim could not stand because the statute requires an equal-protection violation of which he had been cleared.
Mick argued that, as he and Keresetes had been found liable together, he was entitled to the same treatment. The appellate court disagreed, with judges noting the jury’s verdict was wrong, because it found the men liable under statute 1985(3), which requires an equal-protection violation. But Mick was also found liable of a class-of-one equal-protection violation under statute 1983, so although the verdict was wrong, the court wrote, the judgment was still correct.
The judges noted Thorncreek was upset because two of the three properties were awarded only nominal damages, but the judges found the jury was right to treat the three differently. The defense expert testified that Thorncreek I, which had sold for $16 million, had suffered no ill effects, and the “jury was entitled to accept [that] testimony,” the court wrote.
Likewise, Thorncreek III was not subjected to harassment over electrical upgrades like Thorncreek II, nor was it sued by the village, the court noted. Only Thorncreek II, which received more than $2 million in compensatory damages, could show real damages via the village’s enforcement actions and the loss of a prospective sale that was undercut by the village’s interference, judges wrote.
The appeals were heard by Seventh Circuit judges William J. Bauer, Frank H. Easterbrook and Diane S. Sykes.
Thorncreek is represented by attorneys Cora L Morgan and Andrew W. Mychalowych, of the firm of Siciliano Mychalowych & Van Dusen, PLC, of Bloomfield Hills, Mich., and Dirk L. Van Beek, of Tinley Park.
Park Forest and other defendants are defended by attorneys Stephen Richard Miller, Rachel Ellen Lutner, Frank Bennett Garrett III, Nikoleta Lamprinakos, Todd Kenneth Hayden and Marshall Neal Smith, Jr., of the firm of Robbins, Schwartz, Nicholas, Lifton & Taylor Ltd., of Chicago and Bolingbrook, and Patrick Halpin O'Connor and Michael Russell Hartigan, of the firm of Hartigan & O'Connor P.C., of Chicago.