Regan v. Garfield Ridge Trust and Sav. Bank

Decision Date25 October 1991
Docket NumberNo. 2-90-1238,2-90-1238
Citation220 Ill.App.3d 1078,163 Ill.Dec. 605,581 N.E.2d 759
Parties, 163 Ill.Dec. 605 Terry REGAN and Dennis Egan, Plaintiffs-Appellants and Cross-Appellees, v. GARFIELD RIDGE TRUST AND SAVINGS BANK, as Trustee, et al., Defendants-Appellees and Cross-Appellants.
CourtUnited States Appellate Court of Illinois

Donald E. Schlyer (argued), James Kottaras, Schlyer & Associates, P.C., Griffith, Reese J. Peck, Rathje, Woodward, Dyer & Burt, Wheaton, for Terry Regan, Dennis Egan.

Michael H. Moirano (argued), Christopher P. Koback, Joseph E. Potchen, Nisen & Elliott, Chicago, Anthony F. Mannina, Wheaton, for Garfield Ridge Trust & Sav., Carl Ivanelli, Sr., Carl Ivanelli, Jr., James Ivanelli, Jerry Ivanelli.

Justice DUNN delivered the opinion of the court:

Plaintiffs, Terry Regan and Dennis Egan, filed a three-count complaint against defendants, Garfield Ridge Trust & Savings Bank, as trustee under trust number 85-5-2 (land trust), Carl Ivanelli, Sr. (Carl Sr.), Carl Ivanelli, Jr. (Carl Jr.), James Ivanelli (James), and Jerry Ivanelli (Jerry). In count I, they sought specific performance of a contract for the purchase of certain real estate from the land trust. In count II, they alleged that Carl Sr. tortiously interfered with the contract. In count III, they alleged that the other three defendants, who were land trust beneficiaries when the contract was executed, conspired with Carl Sr. to tortiously interfere with the contract. The trial court granted plaintiffs specific performance while the jury entered a verdict against only Carl Sr. on the other two counts, awarding plaintiffs $400,000 on count II and $200,000 on count III. The trial court entered judgment notwithstanding the verdict in favor of Carl Sr. on count III, and plaintiffs appeal. They contend that the entry of judgment notwithstanding the verdict was error and that they are entitled to a new trial on count III because the jury finding that only one defendant was involved in the alleged conspiracy was inconsistent.

Defendants also appeal and raise the following contentions: (1) that plaintiffs were not entitled to specific performance because they were in breach of certain material contract provisions; (2) that Carl Sr. cannot be held liable for tortiously interfering with the contract because he was acting as an agent for the land trust beneficiaries (3) that Carl Sr. was privileged to interfere with the contract because of his agent's status; (4) that the trial court erred by allowing testimony concerning a prior conviction of Jerry; (5) that two attorneys who represented plaintiffs during the course of the transaction and who testified at trial should not have been allowed to decline to answer certain questions on the basis of the attorney-client privilege; (6) that the trial court erred by instructing the jury not to make any negative inferences from the above assertion of the privilege; and (7) that plaintiffs' counsel improperly failed to complete his impeachment of a defense witness. We affirm.

On March 6, 1986, plaintiffs and the land trust executed a contract for the purchase of a 34-acre parcel of land in Lemont to which the trust held title. The land trust beneficiaries, which included Carl Jr., James, Jerry, and their two sisters, directed the trust to enter into the contract, which provided for a purchase price of $400,000.

The contract further provided as follows. Within six months of its execution, plaintiffs were to pay $100,000 into an escrow account. If plaintiffs had complied with certain requirements set forth in paragraph two, they were to receive title to four lots on the parcel. These included construction of a portion of a roadway which would provide access to the eastern third of the parcel, construction of entrance way markers on the road leading to the parcel, removal of debris from the property, and submission of a plat of subdivision and its approval by local authorities. Each of the above was to be done within six months of the agreement's execution or by September 6, 1986.

By March 6, 1987, plaintiffs were to deposit another $150,000 into escrow. At the same time, they were to receive title to an additional four lots. The remainder of the purchase price was to be paid by September 6, 1987, at which time plaintiffs were to receive title to the remainder of the parcel. The trust beneficiaries had an option to retain up to three lots at a price of $22,000 per lot. Additionally, the agreement stated that at least five days prior to closing, the seller was to provide title commitment insurance in an amount equal to or greater than the purchase price.

The following evidence was brought out at trial. Plaintiffs formed a corporation called Bluff Point Development Company for the purpose of developing the subject property. Dennis Egan was to provide the necessary funds to purchase the land, and Terry Regan was to supervise its development. The Ivanellis had been unable to develop the property because of problems with procuring sewer and water service.

According to Terry Regan's testimony, the Ivanellis provided him with proposed plats of subdivision during the negotiations for the purchase of the property. These proposed plats suggested that the area could be serviced by means of a well and a septic field. Percolation tests performed early in 1987, however, showed that the soil was not suitable for a septic field.

Additionally, after plaintiffs submitted a proposed plat to county authorities in April, they discovered that the road could not be built in the area suggested by the Ivanelli plats because the grade was too steep to meet county requirements. They therefore placed the road in a different location on subsequent revised plats submitted to the county. Even in that location, considerable excavation was required to come close to the county requirement of a maximum road grade of seven degrees. Plaintiffs obtained a variance from the county so the road could have a slightly higher grade. Regan testified that road construction could not begin until a permit was obtained in September 1986. Because they had to excavate up to 14 feet of dirt in some areas, the road took four months to build when it ordinarily might have taken 10 days. According to Regan, the road was substantially complete in January 1987.

Plaintiffs solved the sewer and water problem by persuading a nearby utility company, Citizens Utility, to provide such service. Citizens was a captive utility company which had provided service solely to Santa Fe Industrial, which owned land near the subject property. Citizens agreed in June 1987 to provide sewer and water service to the subject property, according to Regan, with Santa Fe providing a necessary easement to plaintiffs. Later that month, the Du Page County Plat Review Committee approved plaintiffs' fourth revised plat. Regan testified that the sewer and water problem was primarily responsible for delaying plat approval.

Under the contract, the initial closing was to take place on or before September 6, 1986. Defendants presented testimony that the delay occurred because plaintiffs had requested extra time to come up with the money. Plaintiffs testified, however, that the delay occurred because a $250,000 lien showed up on a title policy. That lien had been paid off by Carl Sr. five years earlier. The parties also agreed to modify the contract as follows. Plaintiffs made a $25,000 payment to the trust beneficiaries on September 9, 1986, to show good faith. At the time of closing, plaintiffs paid the beneficiaries $75,000 and received title to three lots. Plaintiffs also paid $25,000 into an escrow account to be used to pay an excavating company which worked on the road. The beneficiaries placed one additional lot deed in escrow to ensure completion of the road.

Plaintiffs did not make the $150,000 payment that was due on or before March 6, 1987, nor did the beneficiaries send plaintiffs a title commitment for the lots to be conveyed at that time. Egan and Regan both testified that Carl Sr. told them not to worry about the $150,000 payment. Regan stated that this was because of the troubles plaintiffs had encountered with respect to the property, including the sewer and water problem. According to Regan, the beneficiaries did not demand payment of this sum. Egan testified that half the beneficiaries wanted payment, and half were not worried about it. William Ryne, one of plaintiffs' attorneys with respect to the transaction, testified that the beneficiaries' attorney, James O'Neal, did inquire about the $150,000 payment several times during telephone conversations in the spring and summer of 1987. Carl Sr., Carl Jr., and James denied telling plaintiffs not to worry about the payment. James testified that he went to the property and served a written default notice upon Regan in June 1987. Regan denied this, and no copy of the notice was admitted into evidence.

Beginning in July 1987, Carl Sr. proposed a series of new agreements with Regan and Egan. According to defense testimony, these plans were designed to have Carl Sr. arrange financing for plaintiffs so the transaction would close in September. Regan's testimony, however, indicated that the purpose of these plans was to enable the parties to purchase an adjoining 181-acre tract and other adjoining land for the purpose of developing the land as a golf course. In several of these proposals, Carl Sr. and a friend were each to receive a percentage of Bluff Point Development Company. Regan and Egan agreed to the first four proposals submitted by Carl Sr., but Carl Sr. returned to them each time and stated the beneficiaries would not agree. Finally, early in September 1987, Carl Sr. suggested a plan pursuant to which he and a friend would each receive 30% of Bluff Point in return for providing financing. Plaintiffs turned this deal down.

On August 11, 1987, James O'Neal, the beneficiaries' attorney, sent a letter to one of plaintiff...

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