Sienna Court Condo. Ass'n v. Champion Aluminum Corp.

• Decision Date: 17 February 2017
• Docket Number: 1-14-3364, consolidated with 1-14-3687 , 1-14-3753
• Citation: 2017 IL App (1st) 143364,75 N.E.3d 260
• Parties: SIENNA COURT CONDOMINIUM ASSOCIATION, an Illinois not-for-profit corporation, Plaintiff-Appellant, v. CHAMPION ALUMINUM CORPORATION, a New York Corporation, d/b/a Champion Window and Door ; BV and Associates, Inc., a Michigan corporation, d/b/a Clearvisions, Inc.; Wojan Window and Door Corporation, a Michigan corporation; Matsen Ford Design Associates, Inc., a Wisconsin corporation; Wallin-Gomez Architects, Ltd., an Illinois corporation; HMS Services Inc., an Illinois corporation, d/b/a HMS Engineering, Defendants-Appellees, Lichtenwald-Johnston Iron Works Company, an Illinois corporation; Metalmaster Roofmaster Inc., an Illinois corporation; Don Stoltzner Mason Contractor, Inc. ; Tempco Heating And Air Conditioning Company, Defendants-Appellees and Counter-Defendants-Appellees, Roszak/ADC, LLC, an Illinois limited liability company, Defendant and Counter-Plaintiff-Appellant (MTH Enterprises LLC, an Illinois limited liability Corporation, d/b/a MTH Industries, NGU Inc., a New York Corporation d/b/a Champion Architectural Window and Door, TR Sienna Partners, LLC, an Illinois limited liability company Defendants).
• Court: United States Appellate Court of Illinois

2017 IL App (1st) 143364
75 N.E.3d 260

SIENNA COURT CONDOMINIUM ASSOCIATION, an Illinois not-for-profit corporation, Plaintiff-Appellant,
v.
CHAMPION ALUMINUM CORPORATION, a New York Corporation, d/b/a Champion Window and Door ; BV and Associates, Inc., a Michigan corporation, d/b/a Clearvisions, Inc.; Wojan Window and Door Corporation, a Michigan corporation; Matsen Ford Design Associates, Inc., a Wisconsin corporation; Wallin-Gomez Architects, Ltd., an Illinois corporation; HMS Services Inc., an Illinois corporation, d/b/a HMS Engineering, Defendants-Appellees,

Lichtenwald-Johnston Iron Works Company, an Illinois corporation; Metalmaster Roofmaster Inc., an Illinois corporation; Don Stoltzner Mason Contractor, Inc. ; Tempco Heating And Air Conditioning Company, Defendants-Appellees and Counter-Defendants-Appellees,

Roszak/ADC, LLC, an Illinois limited liability company, Defendant and Counter-Plaintiff-Appellant

(MTH Enterprises LLC, an Illinois limited liability Corporation, d/b/a MTH Industries, NGU Inc., a New York Corporation d/b/a Champion Architectural Window and Door, TR Sienna Partners, LLC, an Illinois limited liability company Defendants).

1-14-3364
consolidated with 1-14-3687
1-14-3753

Appellate Court of Illinois, First District, SIXTH DIVISION.

FEBRUARY 17, 2017

Arnstein & Lehr, LLP, of Chicago (Hal R. Morris, Justin L. Weisberg, Raymond N. Krauze, Elizabeth A. Thompson, and Joseph L. Hoolihan, of counsel), for appellant Sienna Court Condominium Association.

Cassiday Schade, LLP, of Chicago (Julie A. Teuscher, Thomas P. Boylan, and

75 N.E.3d 262

Michael P. Moothart, of counsel), for appellant Roszak/ADC, LLC.

Hinshaw & Culbertson, LLP, of Chicago (Kimberly A. Jansen, Steven R. Bonanno, and Anne C. Couyoumjian, of counsel), for appellee Don Stoltzner Mason Contractor, Inc.

Franco & Moroney, LLC, of Chicago (Robert J. Franco and Christopher M. Cano, of counsel), for appellee Metalmaster Roofmaster, Inc.

Cremer, Spina, Shaughnessy, Jansen & Siegert, LLC, of Chicago (Brian Shaughnessy, of counsel), for appellee Lichtenwald-Johnston Iron Works, Co.

O'Donnell Haddad, LLC, of Libertyville (Robert T. O'Donnell and Adam Kingsley, of counsel), for appellee Tempco Heating and Air Conditioning Co.

Perl & Goodsnyder, Ltd., of Chicago (Christopher M. Goodsnyder, of counsel), for appellee BV and Associates, Inc.

Kearns Law Firm, LLC, of Chicago (Christopher R. Kearns, of counsel), for appellee Champion Aluminum Corp.

SmithAmundsen, LLC, of Chicago (Michael Resis and David A. Johnson, of counsel), for appellee Wojan Window and Door Corp.

Clausen Miller, P.C., of Chicago (Kimberly A. Kearney and Margaret H. Fahey, of counsel), for appellee Matsen Ford Design Associates.

Foran, Glennon, Palandech, Ponzi & Rudloff, PC, of Chicago (Thomas B. Orlando, Douglas J. Palandech, and Madelene G. Sheaffer, of counsel), for appellee HMS Services, Inc.

Adler, Murphy & McQuillen, LLP, of Chicago (Lawrence S. Gosewisch, Thomas S. Flanigon, and Jason T. Meares, of counsel), for appellee Wallin-Gomez Architects, Ltd.

OPINION

JUSTICE CUNNINGHAM delivered the judgment of the court, with opinion.

¶ 1 This opinion addresses three consolidated appeals, all arising from the plaintiff condominium association's lawsuit alleging defects in the design and construction of a condominium development in Evanston, Illinois.

¶ 2 The first appeal concerns whether claims for breach of the implied warranty of habitability may be asserted against design professionals and material suppliers who otherwise did not actually perform construction work. We hold that these claims were properly dismissed.

¶ 3 A second appeal asks us to resolve a number of related certified questions, asking whether a property owner may assert a claim of breach of implied warranty of habitability against a subcontractor of an admittedly insolvent developer or general contractor. We answer those questions in the negative.

¶ 4 In the third appeal, the condominium development's general contractor (which is insolvent and has been dissolved) appeals the dismissal of its counterclaims against various entities, asserted long after its dissolution. We hold that the counterclaims were properly dismissed.

¶ 5 BACKGROUND

¶ 6 These consolidated appeals arise from alleged defects in the design and construction of a condominium development known as Sienna Court Condominiums in Evanston, Illinois (Sienna Court). Sienna Court was developed by TR Sienna Partners, LLC (the developer), who was named as a defendant but is not a party to this appeal. Roszak/ADC, LLC (Roszak),

75 N.E.3d 263

an Illinois limited liability company, acted as the general contractor for the project.¹

¶ 7 Sienna Court was designed by entities including Wallin-Gomez Architects (Wallin-Gomez) and two engineering firms, HMS Services, Inc. (HMS) and Matsen Ford Design Associates (Matsen) (together, the "design defendants").

¶ 8 In addition, Roszak contracted with numerous subcontractors to construct Sienna Court, including: Don Stoltzner Mason Contractor, Inc. (Stoltzner); Metalmaster Roofmaster, Inc. (Metalmaster); Lichtenwald-Johnston Iron Works Co. (Lichtenwald); Tempco Heating and Air Conditioning Co. (Tempco); and BV and Associates, Inc. d/b/a Clearvisions, Inc. (Clearvisions); (collectively, the "subcontractors").

¶ 9 Separately, Champion Aluminum Corporation (Champion) and Wojan Window and Door Corporation (Wojan) (together, the "material suppliers") provided materials for Sienna Court's window wall systems, spandrel units, and window units. Notably, unlike the subcontractors, the material suppliers did not install such materials at Sienna Court or otherwise perform construction work.

¶ 10 Prior to April 2009, the developer sold Sienna Court's condominium residential units to individual purchasers. The Sienna Court Condominium Association, the plaintiff herein, is comprised of the owners of the individual condominium residences at Sienna Court. Sienna Court was turned over from the developer to the plaintiff in April 2009.

¶ 11 According to their discovery responses, the developer and Roszak were insured for liability with respect to the Sienna Court project by two insurers; each insurer's policy provided coverage in the amount of $1 million per occurrence and an aggregate limit of $2 million. These insurers are providing coverage in this action under a reservation of rights.

¶ 12 In June 2009, Roszak filed a Chapter 7 petition in the United States Bankruptcy Court for the Northern District of Illinois (bankruptcy court). In its bankruptcy petition, when asked to disclose any "contingent and unliquidated claims of every nature, including * * * counterclaims of the debtor, and rights to setoff claims," Roszak responded that there were none. In July 2010, Roszak was involuntarily dissolved by the Illinois Secretary of State for failure to file an annual report. Separately, the developer was dissolved and declared bankrupt in February 2010.

¶ 13 On February 26, 2013, the plaintiff condominium association filed a verified complaint, alleging various defects in the Sienna Court condominiums, including defects in the windows and roofs that allowed water infiltration and resulted in property damage. The complaint asserted claims of breach of implied warranty of habitability against certain of the design defendants, material suppliers, and subcontractors, including Clearvisions, Wojan, Champion, Stoltzner, Metalmaster, Lichtenwald, Wallin-Gomez, and Matsen.

¶ 14 The complaint specially pleaded that the developer and Roszak had filed for bankruptcy protection in May 2009 and that on May 5, 2009, "The Bankruptcy Court issued discharges to [the developer and Roszak] * * * having found that, in each case, [the developer and Roszak] were insolvent and had no assets with which to pay the claims of unsecured creditors."

75 N.E.3d 264

¶ 15 On April 19, 2013, the plaintiff filed a first amended complaint, adding a breach of implied warranty claim against Tempco. The first amended complaint also named the developer, Roszak, and HMS as respondents in discovery; those three parties were later converted to defendants by order dated October 28, 2013.

¶ 16 On May 3, 2013, the plaintiff filed a motion in the bankruptcy court to reopen Roszak's bankruptcy case and lift the automatic stay, "so that the [plaintiff] may proceed against [Roszak] solely for the purpose of recovering from third party, non-debtor insurance companies" to the extent of Roszak's insurance coverage.

¶ 17 On May 16, 2013, the bankruptcy court issued an order, granting the plaintiff's request, reopening Roszak's Chapter 7 case, and allowing the plaintiff to pursue its claims against Roszak "solely for the purpose of recovering from third party, non-debtor insurance companies * * * that have insurance claims relating to the property" at Sienna Court. It is undisputed that Roszak did not disclose to the bankruptcy court the existence of any potential counterclaims arising from the plaintiff's lawsuit.

¶ 18 On May 13, 2013, the Matsen engineering firm filed a motion to dismiss the implied warranty of habitability claim asserted against it, pursuant to section 2-615 of the Code of Civil Procedure. 735 ILCS 5/2-615 (West 2014). Among other arguments, Matsen contended that no implied warranty of habitability attaches to the services of design professionals. On June 20, 2013, Wallin-Gomez, Sienna Court's architect, filed a similar motion to dismiss, asserting that "claims for breach of implied warranty of habitability do not apply to architect and building designers who do not engage in the construction of the allegedly defective structure."

¶ 19 The plaintiff filed a response to Wallin-Gomez's motion on September 12, 2013. In that response, the plaintiff argued that it could maintain its warranty of habitability claim on the basis of this court's decision in Minton v. The Richards Group of Chicago , 116 Ill.App.3d 852, 72 Ill.Dec. 582, 452 N.E.2d 835 (1983). The plaintiff argued that Minton "extends the...