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Tuesday, October 3, 2023

Court Dismisses Tort Claims Relating to Hotel Redevelopment

An Appellate Court dismissed a lawsuit against a municipality relating to a hotel redevelopment project. Matthews v. City of Peoria.

Plaintiffs filed a lawsuit against the city claiming the city interfered with a contractual relationship and a business expectancy relating to a proposed redevelopment of a hotel and adjacent properties. The complaint alleged that the city's requests for more information about the project and its alleged threats to discontinue public financing resulted in the loss of financing for the project and ultimately foreclosure and the bankruptcy of the hotel owners, resulting in plaintiffs losing their interest in the hotel project and opportunity for development fees. 

The city filed a motion to dismiss the two tort claims on the basis that the Tort Immunity Act applied and that the complaint failed to state a cause of action. The trial court dismissed the two counts, finding they were not timely filed within the one year statute of limitations under the Tort Immunity Act. Plaintiffs appealed, and the Appellate Court upheld the dismissal but on a different basis, finding that the complaint did not contain sufficient factual allegations to support these two claims. With respect to the tortious interference with contracts, the Appellate Court held that plaintiffs were not parties to the contracts they claimed the city breached. And as to the tortious interference with business relationships, the Court held that the complaint failed to include facts to support a reasonable expectancy of plaintiffs to enter into a business relationship. 


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