Brown v. Goodman
| Decision Date | 30 September 1986 |
| Docket Number | No. 85-2768,85-2768 |
| Citation | 101 Ill.Dec. 530,498 N.E.2d 854,147 Ill.App.3d 935 |
| Parties | , 101 Ill.Dec. 530 David S. BROWN, Plaintiff-Appellant, v. Lawrence GOODMAN, Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
Springer, Casey, Haas, Dienstag & Silverman, Chicago (Gary E. Dienstag, Adolph L. Haas, Martin L. Silverman, of counsel), for plaintiff-appellant.
Foran, Wiss & Schultz, Chicago (Jeff D. Harris, Kenneth M. Soldat, of counsel), for defendant-appellee.
On January 8, 1963, the plaintiff, David S. Brown, entered into a contract with Joseph J. Kuhny for the sale of certain real estate owned by Brown. Under the contract, Kuhny agreed to purchase the subject property and Brown reserved a five-year option to repurchase the property. To exercise that right, Brown was required to notify Kuhny of his intention to purchase and deposit simultaneously with the delivery of the notice of intent a certified check in the sum of $10,000 as earnest money and, within 15 days thereafter, deposit additional earnest money of $40,000. The option agreement provided that a sale to a third party shall specifically be subject to Brown's right of purchase. The contract and option agreement were recorded.
On October 23, 1964, the property was sold by Kuhny to the defendant, Lawrence Goodman. The contract between Goodman and Kuhny refers to the option rights of Brown and states that the sale is subject to Brown's option rights under the 1963 option agreement. Brown was notified by Kuhny of the sale to Goodman but did not attempt to exercise the option at this time.
On January 8, 1968, within the five-year period, Brown appeared at the offices of Goodman with a certified check for $10,000. Brown delivered the check to Goodman along with his notice of intent to purchase which stated as follows:
Re: NOTICE OF INTENT TO PURCHASE
Pursuant to the terms of contract dated January 8, 1963 between David S. Brown and Joseph J. Kuhny I hereby notify you of my intention to purchase the property referred to in said contract and in all the documents referred to therein and I deposit with you herewith my certified check payable to you in the amount of $10,000. This is sent to you as successor in title to Joseph J. Kuhny.
At the time Brown delivered the $10,000 check, he instructed an employee of Goodman to type the following statement on the reverse side of the check "Earnest money deposit paid per Supplemental Agreement dated January 8, 1963, between David S. Brown and Joseph J. Kuhny."
Two weeks later, on January 19, 1968, Brown again appeared at Goodman's offices with $40,000 in additional earnest money checks, each of which was unendorsed and payable to Brown and contained the following language on the back of each check:
"Additional earnest money deposit paid per supplemental agreement dated January 8, 1963 between David S. Brown and Joseph J. Kuhny."
Goodman informed Brown that he would not sell Brown the property for less than $1,000,000. Brown refused to pay anything more than $500,000 and refused to endorse the $40,000 in additional earnest money checks.
On January 24, 1968, Goodman's attorney wrote the following letter to Brown:
"We reiterate on behalf of our client that the tender does not comply with the agreement referred to above and we consider the option to purchase set forth therein as not having been complied with and to have therefore expired by its terms on January 8, 1968."
Ten years later, on January 6, 1978, Brown brought this two-count second amended complaint against Goodman. Count I alleged that Goodman breached the 1963 option agreement on January 19, 1968, when Goodman refused to honor Brown's option rights after Brown had performed all conditions precedent for a valid exercise of the option. Count II alternatively alleged that Goodman breached a new agreement entered into on January 8, 1968, when Brown offered to purchase the property from Goodman on the same terms contained in the 1963 option agreement. According to Count II, a new contract was created when Brown tendered to Goodman the $10,000 earnest money check which Goodman accepted when he endorsed the check.
Goodman moved for summary judgment on the second amended complaint. Goodman alleged that as to Count I, the 1963 option agreement was an oral contract governed by the five-year statute of limitations for oral contracts. (Ill.Rev.Stat.1985, ch. 110, par. 13-205.) Since this action was not filed until ten years after the alleged breach, the action was time-barred. As to Count II, Goodman contended that the events in January 1968 did not constitute a new contract. Consequently, as it was not a written contract it was also time-barred. The trial court granted summary judgment on both counts. However, the trial court granted Brown leave to file a third amended complaint to proceed on an unjust enrichment claim based on Goodman's retention of the $10,000 check. That matter is still pending in the trial court.
On appeal, Brown first contends that Count I was not barred by the five-year statute of limitations applicable to actions on unwritten contracts. (Ill.Rev.Stat.1985, ch. 110, par. 13-205.) Rather, he asserts that the 1963 option agreement was written and therefore subject to the 10-year statute governing actions on written contracts. (Ill.Rev.Stat.1985, ch. 110, par. 13-206.) Consequently, his action was timely brought within 10 years from the date of breach. Goodman responds that as the contract did not name Goodman or otherwise identify him as a party to the option agreement, parol evidence would be necessary in order to ascertain any contractual relationship between Brown and Goodman. Goodman maintains that accordingly the option agreement must be considered unwritten for limitation purposes.
Illinois courts give a strict interpretation to the meaning of a written contract within the statute of limitations. For statute of limitations purposes a contract is considered to be written if all the essential terms of the contract are in writing and are ascertainable from the instrument itself. (Clark v. Western Union Telegraph Co. (1986), 141 Ill.App.3d 174, 176, 95 Ill.Dec. 563, 490 N.E.2d 36; Weaver v. Watson (1984), 130 Ill.App.3d 563, 567, 85 Ill.Dec. 799, 474 N.E.2d 759; Munsterman v. Illinois Agricultural Auditing Association (1982), 106 Ill.App.3d 237, 238-39, 62 Ill.Dec. 125, 435 N.E.2d 923; Baird & Warner, Inc. v. Addison Industrial Park, Inc. (1979), 70 Ill.App.3d 59, 73, 26 Ill.Dec. 1, 387 N.E.2d 831.) If parol evidence is needed to make the contract complete, then the contract is treated as being oral under the statute of limitations. (Clark v. Western Union Telegraph Co. (1986), 141 Ill.App.3d 174, 176, 95 Ill.Dec. 563, 490 N.E.2d 36; Wielander v. Henich (1965), 64 Ill.App.2d 228, 231, 211 N.E.2d 775.) With regard to the identity of the parties to the agreement, the leading case of Railway Passenger and Freight Conductors' Mutual Aid and Benefit Association v. Loomis (1892), 142 Ill. 560, 32 N.E. 424, states that if the agreement, as set forth in writing, is so indefinite as to the identity of the parties to the agreement so as to necessitate the resort to parol evidence, the agreement is an oral contract within the meaning of the statute of limitations. (Railway Passenger and Freight Conductors' Mutual Aid and Benefit Association v. Loomis (1892), 142 Ill. 560, 567, 32 N.E. 424.) Loomis concerned whether an action brought by a widow to recover benefits under the bylaws of a mutual aid society was barred by the five-year statute of limitations pertaining to oral contracts. The plaintiff's deceased husband was a member of the society, but the bylaws merely provided for the "widow" to be paid a specific sum. The court found that the agreement was not a contract in writing with the widow, as she was not named in the agreement and the term "widow" was too general. The court found that the plaintiff could not be ascertained as a party to the contract as parol evidence was necessary to show that the deceased left a widow and that the plaintiff was his widow. Thus, the law is clear in Illinois that to constitute a written contract under the statute of limitations the written instrument itself must completely identify the parties to the contract. (Railway Passenger and Freight Conductors' Mutual Aid and Benefit Association v. Loomis (1892), 142 Ill. 560, 32 N.E. 424; Clark v. Western Union Telegraph Co. (1986), 141 Ill.App.3d 174, 95 Ill.Dec. 563, 490 N.E.2d 36; Munsterman v. Illinois Agricultural Auditing Association (1982), 106 Ill.App.3d 237, 62 Ill.Dec. 125, 435 N.E.2d 923; Pratl v. Hawthorn-Mellody Farms Dairy, Inc. (1977), 53 Ill.App.3d 344, 347, 11 Ill.Dec. 216, 368 N.E.2d 767; Matzer v. Florsheim Shoe Co. (1971), 132 Ill.App.2d 470, 472, 270 N.E.2d 75; Wielander v. Henich (1965), 64 Ill.App.2d 228, 211 N.E.2d 775; see also Jones v. United States (N.D.Dist.1976), 424 F.Supp. 236, 238.) We recognize that courts in some jurisdictions, in applying the same general principles discussed above, are more liberal in treating a written instrument as a written contract for statute of limitations purposes if the instrument meets the requirements of a written contract under the statute of frauds. See 3 A.L.R.2d 809, 812 (1949).
Brown contends that while Goodman was not named in the option agreement, Goodman's identity as a party to the option agreement is easily ascertainable from several writings made subsequent to the option agreement; namely, Brown's notice of intent to purchase sent to Goodman and Brown's $10,000 earnest money check endorsed by Goodman. We find that this argument is not on point. The issue is not whether the identity of...
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