Krilich v. AMERICAN NAT. BANK AND TRUST CO.
Decision Date | 10 October 2002 |
Docket Number | No. 2-01-1439., No. 2-01-0921, No. 2-01-1235 |
Citation | 778 N.E.2d 1153,268 Ill.Dec. 531,334 Ill. App.3d 563 |
Parties | Robert R. KRILICH, Plaintiff and Counterdefendant-Appellee, v. AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, Defendant-Appellant (Bongi Development Corporation, Defendant and Counterplaintiff-Appellant). Robert R. Krilich, Plaintiff and Counterdefendant-Appellee, v. American National Bank and Trust Company of Chicago, Defendant-Appellant (Bongi Development Corporation, Defendant and Counterplaintiff-Appellant). Robert R. Krilich, Plaintiff and Counterdefendant-Appellee and Third-Party Plaintiff-Appellant, v. American National Bank And Trust Company of Chicago, Defendant-Appellant (Bongi Development Corporation, Defendant and Counterplaintiff-Appellant; Viola Lorentz, as Adm'r of the Estate of Arthur Lorentz, and Mary Burke, Gene Nauert, Herbert Maier, Maurice Frishman, John Joyce, William Lange, and Edward M. White, Third Party Defendants-Appellees). |
Court | United States Appellate Court of Illinois |
Phillip A. Luetkehans, Bruce E. Garner, Brian J. Armstrong, Schirott & Luetkehans, P.C., Itasca, for Robert R. Krilich in Nos. 2-01-0921, 2-01-1439.
Kenneth D. Hubbard, Michael T. Navigate, Laraia & Hubbard, P.C., Wheaton, for American National Bank & Trust Co., et al. in No. 2-01-1235. Bruce E. Garner, Schirott & Luetkehans, P.C., Itasca, for Robert R. Krilich in No. 2-01-1235.
Edmund P. Boland, Michael J. Murray, Carey, Filter, White & Boland, Chicago, for Maurice Frishman, John Joyce, William Lange, Herbert Maier, Gene Nauert, Edward M. White in No. 2-01-1439.
Keith E. Roberts Jr., Michelle L. Cue, Rosemarie Frontzak, Roberts & Vess, P.C., Wheaton, for Mary Burke in No. 2-01-1439.
These consolidated appeals arise from a real estate contract between plaintiff, Robert R. Krilich, and defendant Bongi Development Corporation (Bongi). Krilich filed two motions to dismiss Bongi's multiple counterclaims and affirmative defenses, the trial court granted the motions, and Bongi appeals the dismissals. Krilich appeals an unrelated order in which the trial court dismissed his claim for indemnification against his former joint venturers. We affirm.
On January 5, 1973, Krilich entered into a joint venture agreement (the Carol Stream Joint Venture Agreement) with Arthur Lorentz, Mary Burke, Gene Nauert, Herbert Maier, Maurice Frishman, John Joyce, William Lange, and Edward M. White (collectively, the joint venturers). The purpose of the joint venture was to purchase and develop residential real estate.
On June 29, 1988, acting on behalf of the joint venture, Krilich agreed to sell Bongi certain property in the Village of North Barrington for $1,237,500. The North Barrington parcel consisted of 15 lots of a subdivision, and the parties intended for Bongi to build a single-family residence on each lot. Pursuant to the North Barrington contract, Bongi was to pay Krilich $900,000 at closing and pay the remaining $337,500 pursuant to a promissory note. The contract further provides in relevant part:
On July 15, 1988, Krilich and Bongi closed the sale and Bongi executed a $337,500 promissory note as planned. On or about that date, Krilich and Bongi modified the North Barrington contract to require Krilich to pay one-half of the cost of soil importations and certain other corrective measures. The parties also renewed the first promissory note in the form of a second note.
On February 8, 1991, Krilich and Bongi executed a second modification of the North Barrington contract and a third promissory note. The second modification voided the first modification, thereby eliminating Krilich's duty to pay the costs described therein. The third note consolidated the principal and the interest that Bongi owed and increased the interest rate.
On August 10, 1998, Krilich sued defendants Bongi and American National Bank and Trust Company (American) for breach of the third promissory note. On January 13,1999, Bongi filed an answer, affirmative defenses, and three counterclaims. Bongi's original counterclaims state causes of action for misrepresentation, fraud, and breach of contract. In each of the counterclaims, Bongi alleges the following:
The counterclaims further allege that Krilich intentionally deceived Bongi, Bongi reasonably relied upon the statements, and Bongi incurred substantial damages when it could not obtain zoning approval for the project. Bongi's pleadings also allege that Krilich failed to pay the amounts due under the first contract modification. On March 30, 1999, Krilich filed a motion to dismiss the misrepresentation and fraud counterclaims under section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 1998)). Krilich conceded that he made the statements as alleged. However, he argued that Bongi unreasonably relied upon the statements because (1) they were statements of law, (2) they were statements of future facts, and (3) Bongi waived its contractual right to cancel the agreement upon the occurrence of the events that allegedly caused Bongi's damages. On June 8, 1999, Judge Austin granted the motion to dismiss the misrepresentation and fraud counterclaims.
More than a year later, Bongi filed two additional affirmative defenses, alleging that (1) the North Barrington contract was unenforceable because Krilich used duress and business compulsion while negotiating the second modification of the original agreement and (2) Bongi was entitled to a setoff against any amount that Krilich might recover because Krilich had breached the first contract modification. Bongi also amended the counterclaims to include a second breach of contract count based on the duress allegation.
Specifically, Bongi alleges that Krilich employed duress and business compulsion during the negotiations of the second contract modification by threatening to breach the parties' Covington Cove contract, an unrelated residential real estate development contract executed on May 18, 1988. Pursuant to the Covington Cove contract, Krilich was to sell Bongi 153 "fully improved lots" in the Village of Carol Stream. The agreement required Krilich to complete certain public subdivision improvements, and Bongi alleges that Krilich coerced Carl Bongiovanni, Bongi's president, to execute the second modification of the North Barrington contract by delaying completion of the improvements and withholding a letter of credit for the Covington Cove project. Bongi contends that Krilich knew that Bongi owed more than $5 million on outstanding mortgage loans on the Covington Cove project and that any delays in the construction would threaten the project. Bongi seeks at least $5 million on the duress counterclaim.
Krilich filed a motion to dismiss the two new...
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