TDC Development Corp. v. First Federal Sav. and Loan Ass'n of Ottawa

• Decision Date: 24 September 1990
• Docket Number: No. 1-89-0317,1-89-0317
• Citation: 204 Ill.App.3d 170,561 N.E.2d 1142,149 Ill.Dec. 446
• Parties: , 149 Ill.Dec. 446 TDC DEVELOPMENT CORPORATION, Sam Pancotto, Norman Edidin, Gary Edidin and Milton Levenfeld, Plaintiffs-Appellees, v. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF OTTAWA, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 1142

561 N.E.2d 1142

204 Ill.App.3d 170, 149 Ill.Dec. 446

TDC DEVELOPMENT CORPORATION, Sam Pancotto, Norman Edidin Gary Edidin and Milton Levenfeld, Plaintiffs-Appellees, v. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF OTTAWA Defendant-Appellant.

No. 1-89-0317.

Appellate Court of Illinois,

First District, First Division.

Sept. 24, 1990.

Martin, Craig, Chester & Sonnenschein, Chicago (Thomas H. Donohoe and William A. Kummerer, of counsel), for defendant-appellant.

Altheimer & Gray, Chicago (Lionel G. Gross and William P. Caputo, of counsel), for plaintiffs-appellees.

Justice MANNING delivered the opinion of the court:

This is an appeal from an order entered December 6, 1988, which granted judgment on the pleadings under the Code of Civil Procedure ("Code") (Ill.Rev.Stat.1985, ch. 110, par. 2-615(e)), in favor of plaintiffs in an action to recover money for certain real estate taxes allegedly owed by defendant pursuant to the terms of a written agreement. The question presented is whether the trial court improperly granted judgment on the pleadings in favor of plaintiffs by finding that the agreement's terms were a "matter of contract and clearly stated within the contract."

On February, 29, 1980, defendant, First Federal Savings and Loan Association of Ottawa ("Ottawa") loaned money to plaintiff, TDC Development Corporation ("TDC") for the construction of a 96-unit condominium development to be built upon certain real estate that was held in a land trust which listed TDC as the sole owner of the beneficial interest. By June 1982, the loan was alleged to be in default and the project, which remained uncompleted and required additional funds to cover the costs of completion, was the subject of litigation between Ottawa, TDC and other parties.

On June 14, 1982, Ottawa, TDC, the owners of the stock of TDC (Sam Pancotto, Norman Edidin, Gary Edidin and Milton Levenfeld), who are plaintiffs and parties to this appeal, and the land trust and the project contractor, neither of whom are parties before this court, entered into an "Agreement" under which the lender, Ottawa, agreed to provide additional funds to complete the project. Ottawa also agreed to pay TDC and to assume specific obligations and liabilities under the project in consideration of TDC and other interested parties performing certain conditions, in particular, TDC's promise to convey title to the real estate or assign its beneficial interest to Ottawa or a nominee selected by Ottawa.

Title to the subject real estate was conveyed to Ottawa and it was required to pay $49,033.15 for real estate taxes due on the property for the years 1980-82. Ottawa deducted this amount from the sum due to TDC under the terms of the agreement. Consequently, plaintiffs sued Ottawa alleging inter alia that Ottawa had assumed the full responsibility for payment of the real estate taxes pursuant to the agreement. Ottawa denied liability; however, the trial court entered judgment on the pleadings in the amount of $49,033.15, plus interest on behalf of plaintiffs. We reverse and remand.

It is well established that a motion for judgment on the pleadings, as provided in section 2-615(e) of the Code (Ill.Rev.Stat.1985, ch. 110, par. 2-615(e)), tests the sufficiency of the pleadings by determining whether the plaintiff is entitled to the relief sought by his complaint or, alternatively, whether the defendant by his answer has set up a defense that would entitle him to a hearing on the merits. (Teeple v. Hunziker (1983), 118 Ill.App.3d 492, 496, 73 Ill.Dec. 925, 454 N.E.2d 1174; Hartlett v. Dahn (1981), 94 Ill.App.3d 1, 3, 49 Ill.Dec. 400, 418 N.E.2d 44; David v. J. Elrod Realtors on Devon, Inc. (1979), 75 Ill.App.3d 449, 451, 31 Ill.Dec. 381, 394 N.E.2d 583; see also Carebuilt Corp. v. Horsting (1963), 40 Ill.App.2d 280, 189 N.E.2d 364; Milanko v. Jensen (1949), 404 Ill. 261, 88 N.E.2d 857.) In deciding the motion, the trial court must examine all pleadings on file, taking as true the well-pleaded facts, and reasonable inferences to be drawn therefrom, set forth in the opposite party's pleadings (Walker v. State Board of Elections (1976), 65 Ill.2d 543, 552-53, 3 Ill.Dec. 703, 359 N.E.2d 113), to determine whether a material factual dispute exists or whether the controversy can be resolved strictly as a matter of law. See Baker-Wendell, Inc. v. Edward M. Cohon & Assoc. (1981), 100 Ill.App.3d 924, 56 Ill.Dec. 237, 427 N.E.2d 317; David, 75 Ill.App.3d 449, 31 Ill.Dec. 381, 394 N.E.2d 583.

It is well settled that where such examination of the pleadings discloses the existence of issues of one or more material facts, evidence must be taken to resolve such issues (Bank & Trust Co. v. Arnold N. May Builders (1980), 90 Ill.App.3d 454, 456-57, 45 Ill.Dec. 850, 413 N.E.2d 183; see also Heller v. Goss (1980), 80 Ill.App.3d 716, 35 Ill.Dec. 933, 400 N.E.2d 70), and the motion for judgment on the pleadings must be denied (Triangle Sign Co. v. Weber, Cohn & Riley (1986), 149 Ill.App.3d 839, 843, 103 Ill.Dec. 294, 501 N.E.2d 315; see generally Christensen v. Wick Bldg. Sys., Inc. (1978), 64 Ill.App.3d 908, 21 Ill.Dec. 645, 381 N.E.2d 1189; Allis-Chalmers Credit Corp. v. McCormick (1975), 30 Ill.App.3d 423, 331 N.E.2d 832; Affiliated Realty Mortgage Co. v. Jursich (1974), 17 Ill.App.3d 146, 308 N.E.2d 118) since a judgment on the pleadings is proper if only questions of law and not of fact exist after the pleadings have been filed. Walker, 65 Ill.2d at 552, 3 Ill.Dec. 703, 359 N.E.2d 113.

In deciding the propriety of an order granting judgment on the pleadings, the reviewing court must ascertain whether the trial court correctly determined that no material issue of fact was presented by the pleadings (Kemper v. Worcester (1982), 106 Ill.App.3d 121, 123, 62 Ill.Dec. 29, 435 N.E.2d 827), and if there was no such issue, whether judgment was correctly entered. Teeple v. Hunziker, 118 Ill.App.3d at 497, 73 Ill.Dec. 925, 454 N.E.2d 1174. See also Urbaitis v. Commonwealth Edison (1989), 185 Ill.App.3d 616, 132 Ill.Dec. 612, 540 N.E.2d 352.

In the case at bar, the trial court found that the terms as used in the agreement were clear and unambiguous and best stated the parties' intentions, where it stated:

"THE COURT: Notwithstanding anything to the contrary contained herein, Ottawa agrees to assume responsibility for the following obligations related to the Project to the extent to which such obligations are or become liens upon the Project, up to the amounts designated: (1) Those claims, liens, and title exceptions found in the Commitment for Title Insurance, attached hereto as Exhibit B, except item number 35 on page 10 thereof, up to the amounts set forth therein--

So the questions are whether the taxes for 1980, 1981, and 1982 are or will become liens upon the Project, and whether they are in Exhibit B--and whether they are covered by the provision 'up to the amounts set forth therein.'

It seems to me that tax obligations are liens, and it seems to me that the intent of the parties would take that into account.

It seems to me, also, that within Schedule B, which is attached and in connection with the Project, it states that taxes for the years 1980, 1981, and 1982 are liens which somebody is going to have to be responsible for at some point.

This Agreement was made on June 14, 1982, and so, obviously, that would be on the mind of the person who entered into the Agreement.

[I]t seems to me that where the parties wanted to except certain things within Schedule B, he knew how to do that--So the parties, both sophisticated in the business that they were in, had the ability to specifically except things if they wished to--"

It is well settled that the meaning to be given to the language or terms used in an agreement between the parties is governed by contract law. Our courts have determined that where contract language is unambiguous it should be given its plain and ordinary meaning (Reynolds v. Coleman (1988), 173 Ill.App.3d 585, 593, 123 Ill.Dec. 259, 527 N.E.2d 897), without resorting to rules of construction (P.A. Bergner & Co. v. Lloyds Jewelers, Inc. (1986), 112 Ill.2d 196, 203, 97 Ill.Dec. 415, 492 N.E.2d 1288), and without the court searching for ambiguity where there is none. (United States Fire Insur. Co. v. Schnackenberg (1981), 88 Ill.2d 1, 4, 57 Ill.Dec. 840, 429 N.E.2d 1203.) Moreover, construction of a contract presents a question of law (see Mazanek v. Rockford Drop Forge Co. (1981), 98 Ill.App.3d 956, 54 Ill.Dec. 368, 424 N.E.2d 1271), for the trial court's determination where the parties have attached no peculiar or unusual meaning to the words (Ahlvers v. Terminal R.R. Ass'n (1975), 31 Ill.App.3d 166, 171-72, 334 N.E.2d 329). Where, however, the language leaves the true intent of the parties in doubt, it is necessary to receive extrinsic evidence as the question becomes one of fact for the trier of fact. (See generally Hagerty, Lockenvitz and Assoc. v. Ginzkey (1980), 85 Ill.App.3d 640, 40 Ill.Dec. 778, 406 N.E.2d 1145.) Stated another way, the determination of whether a document's language is ambiguous is a matter of law which must be decided by the trial court in the first instance. Chicago Investment Corp. v. Dolins (1981), 93 Ill.App.3d 971, 974, 49 Ill.Dec. 415, 418 N.E.2d 59; see also URS Corp. v. Ash (1981), 101 Ill.App.3d 229, 56 Ill.Dec. 749, 427 N.E.2d 1295; National Tea Co. v. American Nat'l Bank & Trust Co. (1981), 100 Ill.App.3d 1046, 56 Ill.Dec. 474, 427 N.E.2d 806.

TDC contends that the plain and ordinary language of the agreement conclusively establishes that Ottawa assumed liability for all of the title exceptions which were or could become liens and were described in the "Commitment for Title" unless it specifically stated otherwise; and since the tax report pages were attached as a title exception and Ottawa failed to specifically state that it was not assuming liability for that attachment, Ottawa has the liability for and...