Arnold v. Leahy Home Bldg. Co., Inc.

• Decision Date: 28 April 1981
• Docket Number: 80-409,Nos. 80-61,s. 80-61
• Parties: , 51 Ill.Dec. 285 Leslie B. ARNOLD and Juliann E. Arnold, Plaintiffs-Appellants, v. LEAHY HOME BUILDING CO., INC., and Heritage/Pullman Bank & Trust Company, Defendants-Appellees, and LEAHY HOME BUILDING CO., INC., Third-Party-Plaintiff, v. Leslie B. ARNOLD and Juliann E. Arnold, Third-Party-Defendants.
• Court: United States Appellate Court of Illinois

Page 699

420 N.E.2d 699

95 Ill.App.3d 501, 51 Ill.Dec. 285

Leslie B. ARNOLD and Juliann E. Arnold, Plaintiffs-Appellants, v. LEAHY HOME BUILDING CO., INC., and Heritage/Pullman Bank &

Trust Company, Defendants-Appellees, and LEAHY HOME BUILDING CO., INC., Third-Party-Plaintiff, v. Leslie B. ARNOLD and Juliann E. Arnold, Third-Party-Defendants.

Nos. 80-61, 80-409.

Appellate Court of Illinois, Second District.

April 28, 1981.

Baker & McKenzie, Francis D. Morrisey, Chicago, O'Reilly & Cunningham, Wheaton, Edward J. Zulkey, Daniel J. Cheely, George H. Olsen, Neil A. Klegerman and Edward R. Duncan, Jr., Chicago, for plaintiffs-appellants.

Banbury, Banbury & Davis, Noel C. Davis, Aurora, Arthur F. Cichorski, Chicago, for defendants-appellees.

REINHARD, Justice:

Plaintiffs, Leslie Arnold and his wife, brought suit against defendant, Leahy Home Building Co., Inc. (Leahy), seller, and defendant Heritage/Pullman Bank & Trust Co., legal and equitable titleholder to the property, arising out of a written contract wherein Leahy was to construct a house for Arnolds and convey them the house and lot pursuant to specified terms of the contract. Count I of the first amended complaint sought damages at law for Leahy's breach of the contract, and count II sought the equitable remedy of specific performance of the contract. On January 2, 1980, and on Leahy's motion to dismiss, the trial court dismissed by written order count II denying leave to amend that count, and dismissed count I granting leave to amend within a specified time. Plaintiffs appeal the dismissal of count II contending that (1) the trial court erred in denying them leave to file an amended complaint seeking specific performance; and (2) the trial court erred in ruling that certain damages could not be sought as a part of plaintiffs' specific performance action. As count I is still pending in the trial court, the trial judge found no just reason to delay either the enforcement or appeal of the dismissal of count II.

Subsequent to the plaintiffs' filing of their notice of appeal on January 24, 1980, Leahy filed a motion asking the trial judge to vacate a prior order entered on April 17, 1979, which provided by agreement of the parties that the defendant shall not convey the subject premises during the pending litigation. On April 28, 1980, the trial judge found that his order of January 2, 1980, dismissing count II was a final order terminating the agreed order of April 17, 1979. By separate appeal, No. 80-409, plaintiffs now appeal the April 28, 1980 order contending that the trial court was without jurisdiction to enter that order. Our court has consolidated those appeals. Defendant Heritage/Pullman Bank is not a party to either appeal as the primary relief sought is against Leahy.

Plaintiffs' amended complaint requested relief in two counts. In count I, plaintiffs sought to recover damages resulting from the failure of Leahy to construct properly a personal residence at the property and to convey the property to plaintiffs at the time specified in the written contract. The damages sought by plaintiffs included storage, travel, commuting and lodging expenses incurred as a result of Leahy's failure to convey the property to plaintiffs on August 25, 1978, the agreed closing date stipulated in the contract, and loss of use of moneys paid to Leahy and independent contractors as well as loss of a first mortgage financing commitment for the purchase of the property. In count II, plaintiffs sought specific performance of Leahy's promise to convey the property to plaintiffs in accordance with the contract, plus damages for incomplete and incorrectly completed construction items, delay damages, including storage, travel, commuting and lodging expenses, as well as loss of a first mortgage commitment incurred by the plaintiffs as a result of Leahy's failure to perform on time where the contract specifically provided that time was of the essence. More specifically, in their action for specific performance in count II plaintiffs alleged:

"11. At no time prior or subsequent to August 25, 1978 did defendant ever notify plaintiffs of any request for extension of the time of closing specified in Paragraph 5 of the agreement, but to the contrary from and after April 18, 1978 repeatedly assured plaintiffs that it would be able timely to perform in accordance with the agreement.

13. On August 25, 1978, and at all times thereafter, the plaintiffs were, and are now, ready, willing and able to fulfill the agreement in all respects on their part. Plaintiffs have offered to pay defendant the purchase money in cash and have otherwise duly performed all conditions of the agreement on their part.

14. On March 13, 1979, and March 23, 1979, plaintiffs, through their attorneys, notified defendant that they were ready, willing and able to proceed with the closing of the purchase of the premises subject to appropriate offsetting credits to the purchaser for those items not yet completed by the defendant and for the damages caused by the defendant's failure to perform in accordance with the agreement. On or about March 15, 1979, defendant caused to be delivered to plaintiffs a proposed closing statement, under cover of defendant's letter dated March 15, 1979, true and correct copies of which letter and closing statement are attached hereto and made a part hereof as Exhibit B, and which letter contained the threat to terminate the agreement in the event plaintiffs refused to close the transaction on the basis of the closing statement delivered to the plaintiffs. On March 23, 1979, plaintiffs caused to be delivered to defendant's attorneys a revised closing statement setting forth those credits to which plaintiffs were entitled, a true and correct copy of which closing statement is set forth in Exhibit C attached hereto, and plaintiffs notified defendant that they were ready, willing and able to close the purchase of the premises. On or about March 27, 1979, defendant caused its letter dated March 27, 1979 to be delivered to plaintiffs, a true and correct copy of which is attached hereto and made a part hereof as Exhibit D, whereby defendant notified plaintiffs that it had elected to terminate the agreement, and that the earnest money deposited with defendant by plaintiffs was being forfeited and retained by defendant. Defendant's action is so attempting to terminate the agreement constitutes a wrongful, willful and malicious refusal to perform in accordance with the terms of the agreement to the great detriment and damage of the plaintiffs.

23. The defendant has refused and still refuses to substantially perform in accordance with the agreement and to convey the premises pursuant to the agreement.

25. Defendant, by his actions, has purposefully and willfully attempted to force defendant to accept the premises on terms and conditions not in accordance with the agreement and which failed to take into account and credit to plaintiffs amounts necessary to compensate plaintiffs for the damages incurred by reason of defendant's delay in completing construction of the two-story house on the premises and the amounts necessary to compensate plaintiffs for the unfinished or damaged items as set forth in page 5 of Exhibit C to the first amended complaint.

26. Defendant has willfully and wrongfully attempted to terminate the agreement pursuant to his letter dated March 27, 1979, as set forth in Exhibit D to this complaint.

27. Plaintiffs have been and remain ready, willing and able to close the purchase of the premises in accordance with the agreement and the closing statement set forth in Exhibit C to this agreement."

These allegations have been set out at length since it is upon them, particularly paragraphs 13 and 14, that the trial judge in his memorandum of decision found were inconsistent allegations in verified pleadings. He ruled that paragraph 14 showed conclusively that plaintiffs were not at all times ready, willing and able to fulfill the agreement by setting unreasonable preconditions to closing. The trial judge further reasoned that in view of the verified allegations in paragraph 14, plaintiffs forfeited any action they might have had for specific performance and could not make out by repleading a sufficient cause of action for specific performance. The trial court also found that the claims for damages included in the specific performance count were not "equitable compensation" in the nature of an accounting, but were legal damages inconsistent with the relief of specific performance.

An action should not be dismissed for insufficiency at law unless it clearly appears that no set of facts could be proven under the pleadings which would entitle plaintiff to relief. (Dangeles v. Marcus (1978), 57 Ill.App.3d 662, 15 Ill.Dec. 299, 373 N.E.2d 645; Johnston v. Girvin (1965), 61 Ill.App.2d 47, 208 N.E.2d 894.) A motion to dismiss a complaint admits, for purposes of disposition of that motion, all facts well pleaded together with all reasonable inferences which can be drawn therefrom. (Talley v. Yonan (1979), 72 Ill.App.3d 851, 28 Ill.Dec. 880, 391 N.E.2d 79; Lucchetti v. Lucchetti (1980), 82 Ill.App.3d 630, 37 Ill.Dec. 852, 402 N.E.2d 854; Pierce v. Board of Education (1976), 44 Ill.App.3d 324, 3 Ill.Dec. 67, 358 N.E.2d 67.) Pleadings are to be liberally construed with a view to doing substantial justice between the parties. (Lucchetti v. Lucchetti ; Ill.Rev.Stat.1979, ch. 110, par. 33(3).) Moreover, the court must determine if, in any event, plaintiffs would be able to amend their complaint to state a cause of action. Leave to amend should be granted unless it is apparent that even after amendment no cause of action can be stated. (Horwath v. Parker (1979), 72 Ill.App.3d 128, 28 Ill.Dec. 90, 390 N.E.2d 72; Miller v. Enslen (1978), 60 Ill.App.3d 865, 18 Ill.Dec. 129, 377 N.E.2d 282.) However, the decision to allow an amendment is a matter within the sound discretion of ...