Grossinger Motorcorp, Inc. v. American Nat. Bank and Trust Co., 1-91-1376

• Citation: 240 Ill.App.3d 737,607 N.E.2d 1337,180 Ill.Dec. 824
• Decision Date: 31 December 1992
• Docket Number: No. 1-91-1376,1-91-1376
• Parties: , 180 Ill.Dec. 824 GROSSINGER MOTORCORP, INC., Plaintiff-Appellant, Cross-Appellee, v. AMERICAN NATIONAL BANK AND TRUST CO., Defendants (4545 Touhy Company, Defendant-Appellee, Cross-Appellant).
• Court: United States Appellate Court of Illinois

Page 1337

607 N.E.2d 1337 240 Ill.App.3d 737, 180 Ill.Dec. 824 GROSSINGER MOTORCORP, INC., Plaintiff-Appellant, Cross-Appellee,
v.
AMERICAN NATIONAL BANK AND TRUST CO., Defendants (4545 Touhy
Company, Defendant-Appellee, Cross-Appellant). No. 1-91-1376. Appellate Court of Illinois,
First District, Fifth Division. Dec. 31, 1992.
Rehearing Denied Feb. 5, 1993.

Page 1338

[240 Ill.App.3d 738] [180 Ill.Dec. 825] Rudnick & Wolfe, Chicago (Mark L. Shapiro, Richard S. Huszagh, of counsel), for appellant.

Pretzel & Stouffer Chartered, Chicago (Robert Mark Chemers, Scott O. Reed, of counsel), for appellee.

Justice GORDON delivered the opinion of the court.

Plaintiff, an automobile dealership, entered into a contract to purchase a tract of land from defendant-appellee 4545 Touhy Company (hereinafter defendant) and pursuant to this contract deposited $100,000 earnest money into an escrow. The contract contained the condition that the property be rezoned for its use as an automobile dealership and imposed the duty of diligently pursuing such rezoning on plaintiff.

Page 1339

[180 Ill.Dec. 826] After failing to obtain the rezoning within the allotted period of time, plaintiff notified defendant that it was exercising its right to terminate the contract and subsequently brought this action seeking return of the earnest money. After a bench trial, the trial [240 Ill.App.3d 739] court awarded defendant the earnest money as liquidated damages, pursuant to a clause in the contract, reasoning that plaintiff had breached the contract by failing to diligently pursue the rezoning of the property. The court also awarded attorney fees to defendant pursuant to a provision in the contract. Plaintiff appeals from the orders awarding defendant the earnest money and attorney fees. Defendant cross-appeals from the order awarding fees contending that the amount was inadequate. FACTS

Written Evidence

On October 16, 1987, plaintiff, Grossinger Motorcorp, Inc. and defendant, 4545 Touhy Co., entered into a contract for the sale of land located at 4545 W. Touhy Ave. in Lincolnwood, Illinois for $4,750,000. Pursuant to the terms of the contract, plaintiff deposited $100,000 earnest money into an escrow. Plaintiff, a franchised motor vehicle dealer for Cadillac, Pontiac, GMC Truck, General Motors, Volvo and Suzuki, intended to use this property to consolidate some of its car dealerships, then at different locations, into an "autoplex" or automobile mall where customers could come and shop for cars from different manufacturers.

The contract contained several conditions which had to be met within specified time limits. The contract provided that by December 14, 1987, plaintiff had to receive a firm written commitment from Commonwealth Edison to lease it the strip of land adjacent to the subject property for parking on substantially the same terms and conditions as provided in Commonwealth Edison's lease with defendant. The contract also provided that by February 15, 1988, the "real estate shall be lawfully zoned for conduct of a complete automobile sales, servicing and repairing business" and that the "Village of Lincolnwood and all other applicable governmental agencies shall have issued all necessary permits and approvals for the renovation and use of the real estate in accordance with Purchaser's proposed plans therefore." Under the contract, plaintiff was required to "diligently pursue the satisfaction of each of the foregoing conditions."

If these conditions were not satisfied within the allotted time, upon plaintiff's notification to defendant, the contract would become null and void, requiring the return of plaintiff's earnest money. However, defendant had "the right * * * to attempt to satisfy any of the conditions * * * until the scheduled closing date of this transaction," [240 Ill.App.3d 740] February 29, 1988, by sending written notice to plaintiff within ten days of receiving plaintiff's notification.

The contract further provided that if the termination was attributable to plaintiff, then "the earnest money shall be forfeited to the [defendant] to be retained by the [defendant] as liquidated damages, or at [defendant]'s option, [defendant] may exercise any other remedy available at law." Lastly, the contract provided that "[i]n the event of any litigation arising hereunder, the unsuccessful party shall pay the reasonable attorney's fees of the prevailing party."

Procedurally, in order to obtain rezoning, plaintiff first had to present its rezoning plan to the Plan Commission and Zoning Board of Appeals of the Village of Lincolnwood (Plan Commission), who would issue an advisory recommendation, and then to the Board of Trustees of the Village of Lincolnwood (Village Board) who would issue the final approval. Plaintiff filed its application for rezoning with the village on December 21, 1987. Plaintiff scheduled the presentation of its rezoning application before the Plan Commission for January 26, 1988. It could not proceed on that date upon discovering that proper notice of the hearing was not sent to affected residents by its counsel or by the village. As a result, the hearing was rescheduled for February 23, 1988.

Page 1340

[180 Ill.Dec. 827] In a letter to defendant dated January 28, 1988, plaintiff requested a thirty-day extension to satisfy the zoning conditions and a new closing date of March 31, 1988. On February 15, 1988, defendant extended the period of time for plaintiff to obtain the rezoning from February 15, 1988, to February 29, 1988. On February 23, 1988, plaintiff presented its plan before the Plan Commission and the hearing was then continued until March 1, 1988, in order to allow comments from the public. Plaintiff informed defendant by letter dated February 24, 1988, that during the normal course of events the ordinance would not be adopted until the April 7, 1988, meeting of the Village Board. In that letter, plaintiff stated that "[o]bviously, we intend to pursue every means available to us to persuade the Village Board to finalize its action at the March 17, 1988, meeting" (the next practicable date upon which the Village Board was routinely scheduled to meet).

On February 29, 1988, plaintiff notified defendant by letter that the zoning conditions would not be satisfied in the allotted period of time and that the contract was therefore null and void. On the same date, defendant extended the time to obtain rezoning from February 29, 1988, to March 4, 1988, and extended the closing date from February 29, 1988, to March 15, 1988. On March 1, 1988, plaintiff acknowledged[240 Ill.App.3d 741] receipt of defendant's extension and revoked its notification of February 29, 1988, agreeing that the contract was in "full force and effect."

On March 1, 1988, the Plan Commission approved the proposed rezoning plan with certain modifications to which plaintiff had previously acquiesced. The commission, however, also extended these modifications by eliminating a proposed exit from the rear of the building onto Kilbourn Ave. and a used car sign in the front of the building. On March 4, 1988, plaintiff notified defendant that the zoning conditions had not been satisfied and therefore the contract was null and void.

On March 8, 1988, defendant sent a letter to plaintiff which stated that in view of the Plan Commission's recommendation and its earlier letter from plaintiff in which plaintiff stated that it intended to pursue the matter at the March 17, 1988, board meeting, defendant expected plaintiff to request a further extension. The letter also stated that defendant thought the contract could be closed promptly if the plan were presented to the Village Board and asked for plaintiff's cooperation in this effort. In a follow-up letter dated March 10, 1988, defendant specifically asked for plaintiff's cooperation in providing the services of its architect, zoning attorney, and other personnel at the next board meeting because it would be impossible to make the presentation on March 17, 1988, without such assistance.

In reply, by letter dated March 11, 1988, plaintiff reiterated the March 15, 1988, closing date and stated that it would continue to cooperate in good faith to the full extent required under the contract. In a letter dated March 14, 1988, defendant responded that it intended to exercise its right to satisfy the zoning conditions and requested plaintiff's assistance at the forthcoming March 17, 1988, meeting. Defendant subsequently informed the chairman of the Plan Commission, Zave Gussin, that it would attempt to obtain the board's approval at the March 17, 1988, meeting. Plaintiff's zoning personnel did not attend the March 17, 1988, meeting.

On March 16, 1988, plaintiff filed a complaint for declaratory and injunctive relief seeking the return of its earnest money and reasonable attorney fees pursuant to the provision in the contract. On April 4, 1988, defendant filed a counterclaim alleging that plaintiff had failed to act diligently and in a timely fashion to obtain rezoning and had failed to cooperate in good faith with defendant's effort to obtain rezoning. In its prayer for relief, defendant asked in the alternative for the earnest money or "other remedies at law," including the difference between the "value" and contract price of the property and [240 Ill.App.3d 742]...