Hills of Palos Condominium Ass'n, Inc. v. I-Del, Inc.

• Decision Date: 30 September 1993
• Docket Number: INCORPORATE,I-DE,No. 1-92-0811,D,1-92-0811
• Citation: 255 Ill.App.3d 448,626 N.E.2d 1311
• Court: United States Appellate Court of Illinois
• Parties: , 193 Ill.Dec. 760 HILLS OF PALOS CONDOMINIUM ASSOCIATION, INC., et al., Plaintiffs-Appellees and Separate Appellants, v.efendant-Appellant and Separate Appellee and Plaintiff (Douglas Momeyer et al., Plaintiffs-Appellees; James Carpenter, et al., Plaintiffs; Beigel & Sandler, Ltd., Separate Appellant; Jacob Weglarz, et al., Defendants-Separate Appellees; All Weather Insulating and Roofing Co., Inc., et al., Defendants).

Page 1311

626 N.E.2d 1311

255 Ill.App.3d 448, 193 Ill.Dec. 760

HILLS OF PALOS CONDOMINIUM ASSOCIATION, INC., et al Plaintiffs-Appellees and Separate Appellants, v. I-DEL, INCORPORATED, Defendant-Appellant and Separate Appellee and Plaintiff (Douglas Momeyer et al Plaintiffs-Appellees; James Carpenter, et al., Plaintiffs Beigel & Sandler, Ltd., Separate Appellant; Jacob Weglarz et al., Defendants-Separate Appellees; All Weather Insulating and Roofing Co., Inc., et al., Defendants).

No. 1-92-0811.

Appellate Court of Illinois, First District, Sixth Division.

Sept. 30, 1993.

Rehearing Denied Nov. 4, 1993.

Herbert Beigel, Stephen D. Sharp, Beigel & Sandler, Chicago, IL, for Hills of Palos Condominium Ass'n.

Robert C. Farrar, Heineke, Burke, Healy & Bodach, Richard F. Zehnle and Stephen I. Sitley, Vedder, Price, Kaufman & Kammholz, Chicago, IL, for I-Del, Inc.

Robert A. Carson, Gould & Ratner, Chicago, IL, for Dale E. Spencer, assignee of Donna Momeyer.

Presiding Justice McNAMARA delivered the opinion of the court:

Plaintiffs, The Hills of Palos Condominium Association, Inc., on behalf of the individual unit owners, and a number of individual unit owners, brought this action against I-Del, Inc., the developer of the Hills of Palos Condominium complex to recover damages for alleged defects in the construction of the condominiums. Count I of the Association's fifth amended complaint was brought on behalf of the unit owners against I-Del for breach of the implied warranty of habitability. Count II was also brought by the Association, on behalf of the unit owners, and by Douglas and Donna Momeyer against I-Del for breach of the express warranty to keep the roof flashing, roof, windows and doors free from water leaks. Count III was brought by unit owner Christopher Blazek against I-Del for allegedly constructing his unit smaller than called for in the plans. Count IV was brought by the Momeyers against I-Del for breach of the implied warranty of habitability arising from water leaks in their unit.

Following a two-week trial, which commenced July 30, 1991, the jury rendered a verdict in favor of the Association on Count I in the amount of $1,271,859. On Count II, the jury entered a verdict for the Association in the amount of $2,800 and for the Momeyers in the amount of $7,800. On Count III, the jury found against Blazek and in favor of I-Del, Inc. (Count IV was subsumed under Count I, and accordingly no verdict was entered on that count.) I-Del appeals, contending that: (1) the trial court erred in barring its expert from testifying to anything other than the cost of repairs to the masonry on Building No. 4; (2) the trial court erred in refusing to submit a special interrogatory to the jury; (3) damages under Count I were barred by I- Del's disclaimer of the implied warranty of habitability, which was incorporated into the purchase agreement, and by express exclusions from warranty contained in the builder's warranty; (4) the Association failed to demonstrate that I-Del breached the implied warranty of habitability; (5) the trial court erred in allowing the jury to ascertain the appropriate measure of damages; (6) the Association did not prove that the condominiums diminished in value and therefore could not recover damages; (7) the trial court improperly restricted the testimony of its valuation expert; (8) the trial court wrongly refused to instruct the jury as to the Association's failure to produce individual unit owners as witnesses; (9) the trial court improperly permitted the Association to cross-examine Jacob Weglarz regarding I-Del's previously-filed complaint against the brick manufacturer and mason, which forced I- Del to raise the issue of insurance; (10) the trial court erred in refusing to enter a directed verdict against the Momeyers; (11) the trial court erred in refusing to enforce the settlement agreement reached by the parties in the summer of 1990; and (12) the trial court erred in denying its motion for mistrial on the basis of a juror's unauthorized view of the premises during the trial.

In addition, the Association has filed a separate appeal challenging the trial court's dismissal of Jacob Weglarz, president and majority stockholder of I-Del, as a defendant in the fifth amended complaint, as well as its denial of the Association's motion for leave to file a sixth amended complaint.

Counsel for the Association, Stephen Sharp, has also filed a separate appeal challenging the trial court's award of sanctions to I-Del and two third-party defendants after finding that he failed to clearly convey to such defendants that he represented fewer than all the plaintiffs in settlement discussions which took place in July and August of 1990.

The relevant facts are as follows. In 1978, I-Del began the development of the Hills of Palos Condominiums complex located in Palos Hills, Illinois. In April 1982, control of the condominiums passed from I-Del to the Association.

The Hills of Palos condominium complex consisted of four separate buildings containing a total of 60 units. Barbara Sirovatka was the president of the board of managers of the Association from its inception in April 1982 until April 1991. She and her husband moved into their unit in June 1979, when the first of the four buildings was completed. Sirovatka began to complain to I-Del about various construction defects in the fall of 1979. Among other things, Sirovatka complained to I-Del about cracking and crumbling concrete, openings in the walls around piping, defective weather stripping in the hallways, unfinished landscaping and streets, and leaking roofs.

In June 1980, Sirovatka sent I-Del a list of incomplete and unsatisfactory items that had been observed by the unit owners. I-Del made attempts to repair window and roof leaks as it received complaints, but ceased making repairs in April 1982 when it turned the association over to the unit owners. In preparation for the turnover, the unit owners created an interim board of managers. The board notified I-Del that some of the brick in Building No. 4 was deteriorating because of excessive water falling off the roof.

In June or July of 1982, the board met with representatives of I-Del. I-Del informed the board that it was having the bricks tested by a flood testing company. Sirovatka then informed I-Del that some of the brick near the ground was beginning to flake, and appeared to be absorbing water from the ground. The board also informed I-Del that it was experiencing problems with the concrete, and I-Del informed the board that it was also having the concrete tested. I-Del attributed the problem with the concrete to the Association's excessive use of de-icing salt.

In 1983, the Association hired an engineering firm to examine the buildings and surrounding areas. Subsequently, a report was issued by Peter Milbratz of the engineering firm, indicating the results of the examination.

Sirovatka testified to the myriad repairs that the board authorized over the years, including replacing the brick wing walls on each building and rebricking portions of Building No. 4 due to spalling and deterioration of the brick. She testified that the Association was only able to make minor repairs because it did not have the money for more extensive ones. She estimated that the Association had spent $500,000 since 1982 maintaining and making repairs to the property.

On cross-examination, Sirovatka testified that the water seepage through the floor of her unit was the only major problem she had experienced in her unit. She also acknowledged the disclaimer in the purchase agreement she entered into, and agreed that it had not been deleted by her attorney upon his review of the agreement. She acknowledged the allegation in the complaint that the fire walls in the attics were not built in compliance with the local building code, and agreed that the Association had never been cited in violation of any section of that code.

John Butler was the managing agent of the Association and had been employed in that capacity since 1982. That year, he made an inspection of the property and noticed some minor flaking of the bricks on Building No. 4. Butler testified that the Association had made attempts to avoid many of the problems that were now the subject of the present action against I-Del. At one point, the Association installed gutters over entrance ways so that water would not fall directly onto the brick wing walls, which were starting to collapse. In addition, the Association replaced shingles and repaired flashing to avoid leaks in the units.

Butler further stated that the Association replaced some bricks on Building No. 4 that were crumbling, replaced deteriorating handrails and bridges, and repaired damage to the interior of units caused by leaks. Butler testified that the cost to repair problems associated with the roofs, walkways and bridges, masonry, balconies, bay windows, handrails and interior repairs totaled $60,071.

On cross-examination, Butler stated that to his knowledge, the Association did not use salt on the driveways or bridges, but then acknowledged his deposition testimony wherein he stated that the Association did at one time use salt on one of the entrances to the complex. He stated that he had no expertise in analyzing defective new construction.

Peter Milbratz testified as the primary expert witness on behalf of the Association. He had been retained to determine the extent of the construction defects at the Hills of Palos condominiums, and the cost to repair them. Relying on Milbratz's examination of the complex and breakdown of the costs, the Association sought damages in the amount of $1,558,376 under count I of its complaint to repair the alleged construction defects.

The primary area of contention throughout discovery and the trial was whether the brickwork on Building No. 4 needed to be replaced. In this regard, Milbratz testified that in 1983 he...