Appeals court: Sellers can't enforce covenant restrictions on land after selling to forest preserve district

By Dan Churney | Jul 18, 2018

An appeals panel has affirmed a lower court’s decision the sellers of land to a west suburban forest preserve district gave up their rights to enforce a covenant to block ComEd from stringing power lines across that land, when they granted the Illinois Department of Natural Resources power to override covenant restrictions.

The July 11 ruling was penned by Justice Mary Schostok, with concurrence from justices Michael Burke and Robert Spence, of the Illinois Second District Appellate Court, which sits in suburban Elgin. The ruling favored the forest preserve district over the prior owners, who sold hundreds of acres to the district.

In 2003, the limited liability corporation Muirhead Hui, led by Sarah and Michael Petersdorf, sold land to the Kane County Forest Preserve District. The area was to be named the Muirhead Springs Forest Preserve.

The parties agreed to a restrictive covenant that dictated the land be used for public outdoor recreation. The covenant also prohibited sale of the land or transfer of control, without approval from the Illinois Department of Natural Resources. This latter provision was included to help the district secure IDNR funds for improvements to the land.

The Petersdorfs continued to own land adjacent to the property sold to the district.

In 2013, ComEd announced it wanted to run transmission lines through the property, but voiced concern the covenant would deny the company use of the land. The Kane County district’s attorney, Gerald Hodge, then recorded the deeds again, but without the restrictive covenant. The IDNR approved, but ComEd was not satisfied the land was free of encumbrance.

Hodge next asked the Petersdorfs to let him remove the covenant, not telling them he had already done so. However, the Petersdorfs refused, not wanting the lines routed through the land.

The Illinois Commerce Commission ended up denying permission for ComEd to string the lines across the property, saying the covenant restriction still applied.

In January 2017, the Petersdorfs sued the district and Hodge in Kane County Circuit Court, demanding the deeds, with covenants in place, be re-recorded. Hodge’s firm of Kinnally, Flaherty, Krentz, Loran, Hodge & Masur, of Aurora, was also named in the suit. Kane County Circuit Judge David Akemann granted the district’s motion to dismiss the suit, because the covenant did not give the couple any interest in what use was made of the land.

The Petersdorfs appealed, insisting they retained interest in the property and sold the land based on the covenant restrictions remaining in place. However, they found no support for their position.

“The plaintiffs’ argument is contradicted by the plain language of the deeds, the sales agreement, and the record on appeal,” observed Justice Schostok.

Schostok pointed out the covenant allowed the IDNR to overrule the restrictions.

“Once the DNR agreed that the covenant could be removed as to the property at issue, the District could use the property however it saw fit. The deeds clearly provide that the DNR can approve the removal of the restrictive covenant. It would therefore be absurd to find that the plaintiffs conveyed the property subject to a restrictive covenant but then gave a third party -- the DNR -- unfettered discretion to terminate the restrictive covenant.

“The absurdity is compounded by the fact that the record reveals no relationship between the DNR and the plaintiffs,” said Schostok.

Schostok added the purpose of the covenant was to “facilitate the District receiving a grant—not to benefit the plaintiffs.”

Plaintiffs have been represented by Jonathan Phillips, Melissa Schoenbein and John Albers, of the Peoria firm of Shay Phillips Ltd.

The forest preserve district has been represented by Patrick Kinnally, of Hodge’s firm.

Hodge has been represented by Daniel Konicek, of Konicek & Dillon, of suburban Geneva.

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Organizations in this Story

ComEd Illinois Department of Natural Resources Illinois Second District Appellate Court Kane County Forest Preserve District Kinnally Flaherty Krentz Loran Konicek & Dillon Shay Phillips

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