Solwest, LLC v. Fifth Third Bank
| Docket Number | 1-19-2350 |
| Decision Date | 10 May 2021 |
| Parties | SOLWEST, LLC, Plaintiff-Appellant, v. FIFTH THIRD BANK, Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
2021 IL App (1st) 192350
197 N.E.3d 106
458 Ill.Dec. 693
SOLWEST, LLC, Plaintiff-Appellant,
v.
FIFTH THIRD BANK, Defendant-Appellee.
No. 1-19-2350
Appellate Court of Illinois, First District, First Division.
Filed May 10, 2021
Andrew J. Fink, of Solis Law Firm, P.C., of Cicero, Jason A. Richardson and Bradley J. Aiken (pro hac vice), of McDowell Hetherington LLP, of Houston, Texas, and James M. Chambers (pro hac vice), of McDowell Hetherington LLP, of Arlington, Texas, for appellant.
Lenny D. Asaro, of Dinsmore & Shohl LLP, of Chicago, and Robert M. Zimmerman and Andrew B. Cassady, of Dinsmore & Shohl LLP, of Cincinnati, Ohio, for appellee.
JUSTICE HYMAN delivered the judgment of the court, with opinion.
¶ 1 Fifth Third Bank (Fifth Third) sold its historic bank building in Cicero "as is" to Solwest, LLC (Solwest), a law firm owned by Manuel Solis. Five years before the sale, Fifth Third obtained two proposals to replace the building's aging heating, ventilation, and air conditioning (HVAC) system. Fifth Third opted not to replace the entire HVAC system, which contractors estimated to cost as much as $660,000. Instead, Fifth Third continued to make repairs as needed.
¶ 2 More than four years after the sale, the building's air conditioning system failed. Solis contacted an HVAC contractor who had worked on the system when Fifth Third owned the building. The contractor sent Solis the $660,000 replacement proposal he had prepared for Fifth Third. Solwest's second amended complaint alleges Fifth Third (i) violated the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act or Act) ( 815 ILCS 505/2 (West 2018) ) by failing at the time of sale to disclose known defects with the HVAC system, and (ii) breached the real estate contract by failing to disclose the replacement proposals. The trial court entered summary judgment in favor of Fifth Third on both claims.
¶ 3 We affirm. The trial court properly held that Solwest failed to present a material question of fact demonstrating Fifth Third engaged in a deceptive practice or act. Likewise, Solwest failed to present a material question of fact showing Fifth Third had an obligation to disclose the replacement proposals it obtained years earlier.
¶ 4 Background
¶ 5 Fifth Third Bank owned and operated a bank branch in a historic 18,816-square-foot building in Cicero. Fifth Third initially maintained the building before hiring Viox Services, Inc. (Viox), to provide day-to-day facility management services. For larger systems, like the HVAC units in the building, Viox hired outside contractors to conduct in-depth and preventative maintenance.
¶ 6 The building's HVAC system needed regular maintenance. In 2008, as part of its long-term planning for the facility, Viox hired two companies, West Town Refrigeration (West Town) and Therm Flo, Inc. (Therm Flo), to inspect the HVAC system and propose upgrades or replacements. West Town, which had serviced the building's HVAC system, proposed a complete overhaul, totaling $660,000.
¶ 7 Based on depositions attached to First Third's motion for summary judgment, Thomas Fiedler, West Town's vice president, intended the proposal as a budgetary tool for Fifth Third and neither suggested the system was beyond repair nor in need of replacement. Fiedler maintained that his company could continue to service the system without replacement, "There's truly nothing that's part of [the
building's HVAC] system that can't be repaired."
¶ 8 Therm Flo also inspected the system and proposed upgrades and replacements. Therm Flo proposed two courses of action. Like West Town, Therm Flo believed the existing HVAC system was antiquated yet repairable and functional with proper upkeep. Kevin O'Brien, one of two Therm Flo employees responsible for preparing the company's proposal, stated in his deposition that the proposals presented an array of options in place of continued repairs and maintenance.
¶ 9 Fifth Third viewed the companies’ quotes as proposals, not recommendations to replace the entire HVAC system. In his deposition, Jay Henry, Fifth Third's facility manager and liaison with Viox, stated that both quotes were "management options" for Fifth Third to keep the HVAC system functional. Henry said Fifth Third and Viox used a preventative maintenance program to conduct in-depth reviews on larger systems in the building. Brian Simmons, Viox's project manager for the facility, stated that Viox viewed the proposals as "shopping lists" for Fifth Third management to pursue should the system need upgrades. After considering the proposals, Fifth Third tabled them and had West Town replace the boiler and perform necessary maintenance to keep the existing system running.
¶ 10 In 2010, Fifth Third sold the building and relocated to a new, smaller building next door. According to Randall Morrissey of Fifth Third, HVAC issues had nothing to do with Fifth Third's move. Fifth Third had acquired the building in the purchase of a smaller bank chain. After that, regulatory and consumer demand changes meant branches could do with less space, and this building was one of several vacated.
¶ 11 Sale to Solwest
¶ 12 In October 2012, Solis toured the building as a potential new office for his law firm, and the following month, Fifth Third entered into a $1.1 million sale contract. The parties signed a standard real estate contract and a supplemental rider. The parties crossed out many standard provisions, including all seller's representations. The parties also agreed that the sale would be "as is, where is and with all faults and limitations." Solwest released Fifth Third from claims, losses, or damages arising from the building's physical condition. The supplemental rider required Fifth Third to deliver to Solwest within five days after the contract's effective date, and to the extent in Fifth Third's possession, copies of any "soil studies and reports, geological and engineering studies or reports," and "all engineering consultants’ reports covering all or a portion of the Premises." Solwest had 45 days for due diligence during which time it retained the right to terminate the sale for any reason.
¶ 13 Before the sale could be completed, the town of Cicero required the building to undergo inspection. The Cicero building inspector found a leaking HVAC pump and additional unrelated violations. Cicero required a licensed HVAC contractor to fix the pump issue and certify the rest of the system's functionality before issuing a certificate of compliance. Fifth Third placed $105,000 into escrow to pay for necessary repairs. On behalf of Fifth Third, Viox hired West Town to inspect the HVAC system and provide the heating certification. West Town technicians quoted the pump repair and an additional $30,000 in repairs, and certified that the system would run properly after the suggested maintenance. Solwest provided Cicero a different company's quote for the recommended repairs, and Cicero accepted the
quote as complying with West Town's recommendation.
¶ 14 West Town never inspected the air conditioning system before the parties closed because Fifth Third shut the system down after moving into its new building. West Town nonetheless certified that Fifth Third properly maintained the air conditioning system during its ownership and noted the system's functionality before being shut down. West Town planned a more complete air conditioning inspection after Solwest restarted the system for the season. No evidence indicates Solwest inspected the building or the HVAC system during the due diligence period or before the March 2013 closing.
¶ 15 Solwest's Ownership of the Building
¶ 16 Several months after the closing, a West Town technician restarted the air conditioning system and observed a "smooth" start-up with "no major faults." Cicero issued a certificate of compliance in July 2013. According to Fiedler, West Town technicians continued to service the building's HVAC system between four and eight times per year, and West Town never believed the HVAC system needed to be entirely replaced.
¶ 17 In June 2017, over four years after the sale, the air conditioning unit failed when West Town technicians attempted to restart it. A West Town technician described the particular year's start-up as bringing "nothing but catastrophic failure," and repairs would be a "Band-Aid on a bullet hole." The technician described the building as "mechanically defeated" and that it "is simply time for an infrastructure upgrade to the heating and cooling system."
¶ 18 Solis contacted West Town to obtain quotes and opinions on system upgrades. Fiedler sent Solis the 2008 proposal prepared for Fifth Third. Fiedler again intended the proposal as an option. West Town continued to make repairs on the building's HVAC system as recently as August 2018, and Fiedler maintained that the system did not need to be wholly replaced.
¶ 19 In November 2017, after receiving West Town's 2008...
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