Timberline, Inc. v. Towne
| Decision Date | 06 February 1992 |
| Docket Number | No. 2-91-0614,2-91-0614 |
| Citation | 225 Ill.App.3d 433,587 N.E.2d 1149,167 Ill.Dec. 534 |
| Parties | , 167 Ill.Dec. 534 TIMBERLINE, INC., Plaintiff-Appellant, v. Timothy TOWNE, d/b/a Towne Development et al., Defendants-Appellees (David Horwitz et al., Defendants). |
| Court | United States Appellate Court of Illinois |
Rehearing Denied March 25, 1992.
Warren G. Fox, Ori, Fox & Associates, Waukegan, for timberline, inc.
Wayne B. Flanigan, Kuseski, Flanigan & Associates, James J. Babowice, Brydges, Riseborough, Morris, Franke & Miller, Waukegan, Timothy Towne, dba Towne Development.
Plaintiff, Timberline, Inc., appeals from an order of the circuit court of Lake County which dismissed count I of its first amended complaint against defendants Timothy Towne, d/b/a Towne Development, First National Bank of Lake Forest, trust No. 8133, William A. McLaughlin, David Horwitz, Maureen Horwitz, Bank of Northern Illinois, N.A., as trustee of trust No. 3137, Bank of Northern Illinois, N.A., and the Lake Group, Inc.
Plaintiff raises two issues on appeal: (1) whether the trial court erred in dismissing count I of its complaint, which sought specific performance of a real estate contract based on the court's finding that the contract was not enforceable because defendant Towne did not create a binding contract by signing as the agent of the land trust; and (2) whether the trial court also erred in finding that count I should be dismissed because the description of the property contained in the agreement was not definite enough to allow an award of specific performance.
On November 22, 1989, plaintiff filed its verified amended complaint against Timothy Towne, d/b/a Towne Development (Towne), and First National Bank of Lake Forest, trust No. 8133. In count I, plaintiff sought specific performance of a real estate contract. The contract was attached to the complaint as exhibit "A." In the contract, Towne was identified as the seller and plaintiff as the buyer. The property was described as follows:
Attached to the contract was a sketch of the property. The sketch showed a tract of land, and, at the top, a parcel was outlined and designated "P.I.Q.," presumably meaning "property in question." The top line was marked 631.47 feet.
The contract also stated:
The contract was executed on June 30, 1987. It was signed by the vice-president of plaintiff and by Towne under the designation "First National Bank of Lake Forest Trust # 8133." Under Towne's signature were the words, "Agent for the Trust."
Plaintiff's amended complaint alleged that the property described in the contract was part of a five-acre parcel described in a plat of survey. The plat of survey was attached to the amended complaint as exhibit "B" and included a legal description of the five-acre parcel. The complaint also alleged that title to the real estate described in the contract was held by the First National Bank of Lake Forest, trust No. 8133, and that Towne had a beneficial interest in the trust with the power to direct conveyance. The complaint further alleged that plaintiff paid $50,000 to defendants and was ready, willing and able to perform its part of the contract. Plaintiff also alleged that defendants refused to perform its obligations under the contract and returned the $50,000 earnest money.
Also attached to the complaint was the affidavit of Robert Hall, plaintiff's president. Hall stated in his affidavit that plaintiff had previously purchased parcels of real estate from Towne which were held in trust with Towne as beneficiary. Copies of previous contracts for the purchase of real estate signed by Towne were attached to the affidavit.
In count II of the amended complaint, plaintiff sought damages for defendant's breach of contract.
On December 20, 1989, defendants filed a motion to dismiss the amended complaint pursuant to section 2-615 of the Code of Civil Procedure (Code) (Ill.Rev.Stat.1989, ch. 110, par. 2-615), alleging that no contract existed because Towne signed the contract in a representative capacity, as agent for the land trust. Defendants asserted that Towne did not sign the contract in his individual capacity and could not, as beneficiary, sign as agent for the trustee. They concluded that neither defendant was therefore bound by the agreement.
The court denied defendants' motion on January 31, 1990. Defendants filed an answer on March 7, 1990. They admitted that record title to the property was held in the name of the trustee and that Towne owned 50% of the beneficial interest in the trust but denied that Towne had the power to direct a conveyance of the property. Defendants included three affirmative defenses with their answer. These were: (1) that the acceptance of the offer to purchase by the agent of the trust did not conform to the offer to purchase property from Towne; (2) that the contract stated that closing was to take place no later than December 1, 1987; and (3) that plaintiff abandoned any rights it may have acquired pursuant to the purported contract by insisting on modifying the terms of the contract.
On September 5, 1990, defendants filed a motion to withdraw their answer to count I of the amended complaint and sought leave to file a motion to dismiss based upon plaintiff's alleged failure to join necessary parties to the proceedings. The motion was denied, but plaintiff was granted 28 days to add certain necessary parties.
On October 18, 1990, plaintiff therefore added William McLaughlin, David Horwitz, Maureen Horwitz, Bank of Northern Illinois, N.A., as trustee of trust No. 3137, Bank of Northern Illinois, N.A., and the Lake Group, Inc., as defendants. All were alleged to have an interest in the subject property. The court later entered an order dismissing David Horwitz and Maureen Horwitz from the lawsuit with prejudice based upon their allegation that they had no interest in the property which was the subject of the suit. Plaintiff has not appealed from this order, and the Horwitzes are not parties to this appeal. The remaining defendants added by plaintiff on October 18, 1990, will be referred to collectively as "additional defendants."
On December 26, 1990, McLaughlin filed a motion to dismiss plaintiff's amended complaint pursuant to section 2-619 of the Code (Ill.Rev.Stat.1989, ch. 110, par. 2-619). McLaughlin alleged that a contract executed by the beneficiary of a land trust as agent of the trustee is void and unenforceable. He further alleged that, on the date the contract was executed, he was the owner of 50% of the beneficial interest in the land trust which held title to the subject property. McLaughlin also alleged that the amended complaint should be dismissed because an accurate legal description of the property could not be determined from the contract alone.
Attached to McLaughlin's motion was his supporting affidavit and a copy of the trust agreement for trust No. 8133. The agreement stated that Towne had a 100% interest in the real estate described in the agreement. A provision in the agreement also stated:
"The beneficiaries are not the agents of the trustee for any purpose and do not have any authority to contract or to execute leases or do any other act for or in the name of the trustee or to obligate the trust personally or as trustee."
McLaughlin also attached a copy of an assignment, dated December 31, 1986, which stated that Towne assigned 50% of his beneficial interest in the land trust to McLaughlin. It also stated, "[a]ny Power of Direction held by me under this Trust hereafter shall be exercised by: Timothy J. Towne." (Emphasis added.)
On January 4, 1991, the remaining additional defendants filed their own section 2-619 motion to dismiss count I of plaintiff's amended complaint. These defendants incorporated McLaughlin's arguments and also argued that the contract attached to plaintiff's complaint could not be enforced under the Statute of Frauds (Ill.Rev.Stat.1989, ch. 59, par. 1 et seq.). They contended that the Statute of Frauds was not satisfied because Towne did not have authority in writing to sign as agent of the trust.
Plaintiff filed a response to McLaughlin's motion arguing that the issues raised had previously been raised in a motion to dismiss which was denied and that the trust agreement and assignment showed that Towne retained all power of direction.
On February 20, 1991, following a hearing, the court entered an order which granted the motions to dismiss filed by the additional defendants. The court found that Towne retained sole power of direction over the land trust but that he did not create a binding contract by signing as agent of the trust. The court also found that the "legal description contained within the agreement is not specific enough so as to be enforceable in an action seeking specific performance." The order also granted plaintiff leave to file additional pleadings, and plaintiff filed a second amended complaint which added two counts against Towne.
Plaintiff's motion...
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