Arroyo v. City of Chicago

Plaintiffs Louis Arroyo and Spartacus 3, LLC sued the City of Chicago after allegedly relying on a city employee's oral promise to sell them city-owned land at appraised value. Plaintiffs claimed they spent time and money conducting due diligence in reliance on this promise, and asserted claims for promissory estoppel and quantum meruit after the sale did not occur. The circuit court of Cook County dismissed the second amended complaint in full under sections 2-615 and 2-619 of the Code of Civil Procedure, and plaintiffs appealed.

The Illinois Appellate Court, First District, affirmed. On the promissory estoppel claim, the court held that only the Chicago City Council has authority to sell municipal land under the Chicago Municipal Code, and the employee who allegedly made the promise had only narrow authority to execute right-of-entry agreements. Any implied contract based on his promise was therefore void and ultra vires. The court also held that reliance on an unauthorized official's statements is presumptively unreasonable, since parties dealing with a municipality are charged with knowledge of statutory limits on officials' authority. Finally, the statute of frauds barred the oral land-sale agreement, and the partial performance exception did not apply because plaintiffs sought money damages rather than specific performance and could not show reasonable reliance.

On the quantum meruit claim, the court found it both waived for inadequate briefing and meritless, because plaintiffs performed due diligence for their own business advantage rather than as a service to the city, and because an express right-of-entry agreement governed the same work. This decision reinforces that private parties bear the risk of confirming a municipal employee's actual authority before relying on promises regarding city property.