Kalkman v. Nedved

• Decision Date: 24 June 2013
• Docket Number: No. 3–12–0800.,3–12–0800.
• Citation: 991 N.E.2d 889,372 Ill.Dec. 399,2013 IL App (3d) 120800
• Parties: Jason KALKMAN and Lucia Kalkman, Plaintiffs–Appellees, v. George NEDVED and Maureen Nedved, Defendants–Appellants.
• Court: United States Appellate Court of Illinois

2013 IL App (3d) 120800

991 N.E.2d 889

372 Ill.Dec. 399

Jason KALKMAN and Lucia Kalkman, Plaintiffs–Appellees,

v.George NEDVED and Maureen Nedved, Defendants–Appellants.

No. 3–12–0800.

Appellate Court of Illinois,

Third District.

June 24, 2013.

Jeffrey Alan Ryva (argued), Husch Blackwell LLP, Peoria, for appellants.

Mark C. Johnson (argued), Rockford, for appellees.

OPINION

Justice McDADE delivered the judgment of the court, with opinion.

[372 Ill.Dec. 400]¶ 1 Before selling their home to plaintiffs, defendants executed a disclosure report pursuant to section 35 of the Residential Real Property Disclosure Act (765 ILCS 77/35 (West 2010)). The disclosure stated that defendants were not aware of any material defects with the walls or floors of the home. After they purchased the home, plaintiffs discovered material defects with the windows, patio doors, and garage door on the home which caused serious flooding problems. We must determine whether, under the Act, the obligation to disclose material defects in the “walls” of the home also requires that a seller disclose material defects in the home's windows and doors. We hold it does not, and reverse and remand.

¶ 2 FACTS

¶ 3 Defendants George and Maureen Nedved owned a lakefront home in the rural Knox County subdivision of Oak Run, which they placed on the market in 2009. In 2010, plaintiffs Jason and Lucia Kalkman were interested in a lakefront home and found the Nedveds' property listed online. After what the trial court deemed “a shockingly slight inquiry into the condition of the home,” the Kalkmans made the Nedveds an offer to purchase the home.

¶ 4 Prior to the sale, the Nedveds read and prepared a mandatory disclosure report, the form for which is prescribed by section 35 of the Residential Real Property Disclosure Act (Act) (765 ILCS 77/35 (West 2010)). That disclosure report contains 23 listed items which call for the sellers of residential real property to disclose whether they know of a specified material defect or other condition in the home. In their disclosure report, the Nedveds claimed not to know of any material defects or conditions in the home, answering in the negative for all 23 items.

¶ 5 The parties executed a contract for the purchase of the home, under which the Kalkmans would purchase the home subject to certain inspections. The Kalkmans were also allowed to spend a night in the home and examine it. While the Kalkmans did in fact spend a weekend at the property, they spent little or no time examining it, and instead visited with friends and spent time boating on the lake. A routine mold inspection found some mold, and the parties agreed to an offset in the price for mold remediation. A formal home inspection did not discover significant problems, although it did note a potential issue with the windows.

¶ 6 After the sale was finalized the Kalkmans moved into the home, where they quickly discovered a variety of leaks in the windows and doors. When it rained, water entered the house through the patio door on the second floor of the home, saturating the carpet, floor, and the walls in the first floor below. The home's detached garage also experienced leaking through the door, resulting in standing water inside the garage. Finally, the Kalkmans discovered that many of the windows would not close normally because they had been improperly installed or had been warped by the elements.

¶ 7 The Kalkmans filed a complaint against the Nedveds in the circuit court of Knox County. The Kalkmans alleged that the Nedveds' failure to disclose the defects with the windows and doors constituted both a violation of the Act and common law fraud. The court granted partial summary judgment in favor of the Nedveds on several issues. The remaining issue before the court was whether the Nedveds were obligated to disclose the defects under item six of the disclosure report, which reads “I am aware of material defects in the walls or floors.” The Nedveds had answered this question in the negative.

¶ 8 Following an evidentiary hearing and posttrial briefing, the trial court ruled in favor of the Kalkmans. The court found that the problems with the windows, patio door, and garage door were material defects, that they existed when the home was sold, and that the Nedveds were aware of those defects when they filed out the disclosure report. The court then addressed the issue of whether the Nedveds were required to disclose defects in the windows and doors under the Act. The court decided that to best give effect to the intent of the legislature in protecting buyers of residential property from hidden defects, the Act should be interpreted broadly. The court then determined that defects in windows and doors were required to be disclosed under the provision governing disclosure of defects in walls:

“As to the patio doors, the Nedveds claim that the doors are not part of the walls, and neither are the windows and thus defects need not be disclosed. The Court is unaware of any controlling authority, but finds that doors and windows and walls all serve the same purpose, i.e. to protect the interior of the building from the elements. They may serve the additional function of allowing light to pass through, and may provide a means of ingress and egress from the building, but when they are closed their purpose is the same as a wall. They are not specifically excluded from the Disclosure Report and therefore defects to doors and windows must be reported.”

¶ 9 Due to the Nedved's failure to disclose, the trial court awarded the Kalkmans actual damages for remediation of the defects totaling $25,478.21. In addition, the court awarded the Kalkmans attorney fees of $11,500. The Nedveds appealed, arguing that they are not required to disclose material defects in windows or doors under the Act.

¶ 10 ANALYSIS

¶ 11 For the purposes of this appeal, the Nedveds have conceded that there were material defects in the home's windows and doors at the time it was sold; the only issue we must determine is whether sellers must disclose material defects with a home's windows and doors under the Act's obligation to disclose defects with a home's “walls.” This is an issue of statutory construction, which is a question of law that is reviewed de novo. Boaden v. Department of Law Enforcement, 171 Ill.2d 230, 237, 215 Ill.Dec. 664, 664 N.E.2d 61 (1996).

¶ 12 The fundamental rule of statutory interpretation is to ascertain and effectuate the legislature's intent. Hamilton v. Industrial Comm'n, 203 Ill.2d 250, 255, 271 Ill.Dec. 645, 785 N.E.2d 839 (2003). The best indication of the legislature's intent is the plain language of the statute. In re E.B., 231 Ill.2d 459, 466, 326 Ill.Dec. 1, 899 N.E.2d 218 (2008). “[W]hen statutory language is plain and certain the court is not free to give it a different meaning.” In re Estate of Hoehn, 234 Ill.App.3d 627, 629, 175 Ill.Dec. 656, 600 N.E.2d 899 (1992). In addition, a court may not depart from the plain statutory language by reading into it exceptions, limitations, or conditions not expressed by the legislature. In re Estate of Ellis, 236 Ill.2d 45, 51, 337 Ill.Dec. 678, 923 N.E.2d 237 (2009). However, if the statutory language is ambiguous, the court may consult other sources to ascertain the legislature's intent. Krohe v. City of Bloomington, 204 Ill.2d 392, 395, 273 Ill.Dec. 779, 789 N.E.2d 1211 (2003).

¶ 13 Some background on the Act will be helpful to understanding the issue at hand. The Act grants a buyer of residential real property certain remedies if a defect in the property is discovered, modifying the harsh common law doctrine of caveat emptor. Penn v. Gerig, 334 Ill.App.3d 345, 350, 268 Ill.Dec. 339, 778 N.E.2d 325 (2002). Under the Act, a seller of residential real property must provide a prospective buyer with information about certain material defects to the property. 765 ILCS 77/35 (West 2010). The seller is required to disclose material defects of which he or she has actual knowledge, although the seller is not obligated to make any specific investigation or inquiry to complete the disclosure statement. 765 ILCS 77/25(b), (c) (West 2010). A seller who discloses information he or she knows to be false is liable to the buyer for actual damages and court costs. 765 ILCS 77/55 (West 2010). The court may also award reasonable attorney fees to the prevailing party. 765 ILCS 77/55 (West 2010).

¶ 14 To satisfy the requirements of the statute, the seller must complete the disclosure form prescribed by section 35 of the Act. 765 ILCS 77/20 (West 2010). Section 35 states that the disclosure report “is a disclosure of certain conditions of the residential real property” being sold. 765 ILCS 77/35 (West 2010). The report lists 23 specific conditions or material defects and asks sellers to certify whether they are aware of the presence of these defects or conditions in the home. 765 ILCS 77/35 (West 2010).

[372 Ill.Dec. 403]¶ 15 Relevant to the present dispute, on item six of the disclosure report, sellers must certify whether they are “aware of material defects in the walls or floors.” 765 ILCS 77/35 (West 2010). None of the 23 items specifically address doors or windows. In addition, the statute has no “ catch-all” item asking sellers to disclose defects not specifically listed. Despite this apparent gap in the statute, the trial court ruled that the Nedveds were required to disclose the defects in the doors and windows under the item requiring disclosure of defects in walls.

¶ 16 This case turns on how broadly we construe the term “wall,” which the Act does not define. The Nedveds assert that the trial court erred by broadly construing the Act. They argue that the statute should be interpreted narrowly and that the plain meaning of wall excludes windows and doors. On the other hand, the Kalkmans note that purpose of the Act is to provide potential buyers with information about known defects in the home. Muir v. Merano, 378 Ill.App.3d...