IL Appellate Court Holds City Immune From Tort Liability in Zoning Case

This post was originally published in Municipal Minute by Julie Tappendorf, Esq. of Ancel Glink and is reposted with permission

In Xochi, LLC v. City of Galena, the Illinois Appellate Court found the City immune from liability under the Tort Immunity Act for claims relating to a zoning approval relating to a cannabis dispensary and upheld the dismissal of the case against the City.

Xochi owned a building in the City of Galena which it agreed to lease to Veriflife, who intended to operate a cannabis dispensary. Verilife asked the City to complete a zoning form to certify that local zoning would allow a cannabis dispensary at the location, as required by the State of Illinois as part of Verilife’s state licensing application. Prior to Verilife’s request of the City relating to the zoning form, the City had granted zoning relief for a competitor dispensary operator (Fotis), to operate a cannabis dispensary at a location less than 1500 feet from the Xochi building. The City stated that it did not sign the zoning form for the Verilife’s facility because its facility would be within 1500 feet of the Fotis facility, which was prohibited by state and local laws. After the City refused to complete the form, Verilife terminated the lease. Xochi then filed suit against the City, claiming the City was negligent in not completing the form, thus depriving Xochi of the financial benefits of the lease with Verilife. The City filed a motion to dismiss, arguing that it was immune from liability under the Tort Immunity Act. The trial court ruled in the City’s favor and Xochi appealed.

The Appellate Court did not get into the merits of Xochi’s claims against the City, instead agreeing with the circuit court that Section 2-104 of the Tort Immunity Act precluded the City from liability. That Section provides as follows:

A local public entity is not liable for an injury caused by the issuance, denial, suspension or revocation of, or by the failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order or similar authorization where the entity or its employee is authorized by enactment to determine whether or not such authorization should be issued, denied, suspended or revoked.

The Court found that the plain reading of this Section of the Tort Immunity Act applied because the City’s refusal to sign the zoning form for Verilife was a public entity’s “failure or refusal” to provide its “approval…or similar authorization.” As a result, the City was immune from Xochi’s tort claims and the case was properly dismissed.

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