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You are here: Home / Municipal Law / When Does Estoppel Apply Against A Public Entity?

When Does Estoppel Apply Against A Public Entity?

February 24, 2016

Something to Think About

by Christian G. Spesia

Most municipal attorneys are familiar with the general rule that estoppel against public entities is not favored and found only in rare circumstances. County of Cook v. Patka, 405 N.E.2d 1376 (1st Dist. 1980). This rule, like most, comes with an exception and Illinois Courts have set forth a two prong test that must be satisfied in order for estoppel to apply against public entities. First, the affirmative act inducing reliance must be the act of the government body itself, rather than the act of a ministerial officer. Id. at 1381; NewMark Builders, Inc. v. City of Aurora, 233 N.E.2d 44 (1968). Second, the denial of relief must result in substantial loss and the municipality must not be permitted to stultify itself by retracting what its agents had done. Kaloo v. Zoning Boards of Appeals for the City of Chicago, 654 N.E.2d 493 (1st Dist. 1995). Taking into consideration this general premise and the limited exception, the following are some factual scenarios and the respective court’s outcomes concerning the application of estoppel against public entities.

In Cities Service Oil Company v. City of Des Plaines, 171 N.E.2d 605 (Ill. 1961), the Illinois Supreme Court concluded that the facts in the case were sufficient to raise an equitable estoppel claim against the city. Those facts included the fact that the city waited seven (7) months before it acted to revoke building permits issued for the construction of a gas station and this lapse of time in light of the construction progressing “constituted conduct on the part of the city authorities from which it could reasonably be inferred that its issuance was, in effect, ratified.” Id. at 609.

In Kaloo, the plaintiff purchased property with a building and was subsequently told by a zoning planner that his intended use for an auto repair shop would be permitted. A license was issued for the intended use and one month later the zoning administrator sent a cease and desist letter. In finding that estoppel did not apply the court noted that plaintiff purchased the property prior to obtaining the license to operate the business and “therefore, did not rely on the issuance of the license when investing in the property.” The court found that “neither the oral assurances of a zoning department employee, nor the issuance and renewal of the plaintiff’s license constituted an affirmative act by the city for purposes of the doctrine of estoppel.” Kaloo, 654 N.E.2d at 497.

In Ganley v. City of Chicago, 309 N.E.2d 653 (1st Dist. 1974), the court reiterated the general rule that a city cannot be estopped by an act of its agent beyond the authority conferred by him. In Ganley, the plaintiff was issued permits for the construction of three one-story homes. Three weeks after excavation of the basements and the commencement of construction, the city revoked the permits. The court refused to apply the doctrine of estoppel because the permits were invalidly issued and conferred no rights on the permittee.

In New-Mark Builders, Inc. v. City of Aurora, 233 N.E.2d 44 (2d Dist. 1968), the court found that the plaintiff stated a claim for estoppel against the city based on the allegations that the city had approved and annexed two phases of an overall development but refused to annex the contiguous third phase based on a new condition that the city did not apply to the first two phases. According to the court, the prior approvals induced the plaintiff to assume that the next unit would be accepted under the same terms.

In Cook County v. Patka, the court refused to apply the doctrine of estoppel where an assistant state’s attorney allegedly waived the county’s right to a demolition lien against a demolished property because the assistant lacked authority to act and there was no allegation of express consent by the county itself. The court also focused on the fact that the plaintiff alleged non-action verses an affirmative act that induced reliance.

As the case law indicates, the application of estoppel against a governmental entity is a fact intensive inquiry. Those instances where there is clear action from the government body itself and detrimental reliance will be most compelling to a court. However, the precedent from the Cities case provides a scenario where the passage of time coupled with significant reliance and prejudice to the permittee will result in an argument that, even absent government action, estoppel should apply.

Filed Under: Municipal Law

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