Washington Courte Condominium Association-Four v. Washington-Golf Corp.

• Decision Date: 30 June 1994
• Docket Number: Nos. 1-91-2247,ASSOCIATION-FOUR,1-91-3036,WASHINGTON-GOLF,s. 1-91-2247
• Citation: 267 Ill.App.3d 790,205 Ill.Dec. 248,643 N.E.2d 199
• Parties: , 205 Ill.Dec. 248 ., Plaintiffs-Appellees/Cross-Appellants, v.CORPORATION et al., Defendants-Appellants and Cross-Appellees and Third-Party Plaintiffs-Appellants (Robin LeNoble and Associates et al., Third-Party Defendants-Appellees). Appellate Court of Illinois, First District, First Division
• Court: United States Appellate Court of Illinois

Page 199

643 N.E.2d 199

267 Ill.App.3d 790, 205 Ill.Dec. 248

WASHINGTON COURTE CONDOMINIUM ASSOCIATION-FOUR et al Plaintiffs-Appellees/Cross-Appellants, v. WASHINGTON-GOLF CORPORATION et al., Defendants-Appellants and Cross-Appellees and Third-Party Plaintiffs-Appellants (Robin LeNoble and Associates et al., Third-Party Defendants-Appellees).

Nos. 1-91-2247, 1-91-3036.

Appellate Court of Illinois First District, First Division.

June 30, 1994.

Rehearing Denied Dec. 2, 1994.

Supplemental Dissent on Rehearing

Dec. 12, 1994.

Rooks, Pitts and Poust, Law Offices of Jeffrey M. Marks and Richard J. Prendergast, Ltd., Chicago (Stephen E. Sward, Jeffrey M. Marks, Richard Capra, Joseph E. Tighe and James Prendergast, of counsel), for appellants.

Raymond Adreani, Bruce Adreani and Edmund Beaulieu, Rooks, Pitts and Poust, Chicago (Stephen E. Sward, of counsel), for plaintiffs-appellants WA Golf Corp.

Pope & John, Ltd., Chicago (William J. Kunkle, Jr., Scott B. Greene, and Derek J. Meyer, of counsel), for appellees.

Di Monte & Lizak, Park Ridge (Chester A. Lizak, Alan L. Stefaniak and Richard W. Laubenstein, of counsel), for defendant-appellee Hans Rosenow Roofing Co.

Cassiday, Schade & Gloor, Chicago (A. Jeffrey Seidman, Timothy J. Ashe and Lynn D. Dowd, of counsel), for defendants-appellees Rabin LeNoble & Associates, Zorak Rabin, and Daniel LeNoble.

Orner & Wasserman, Ltd., Chicago (Norton Wasserman and Mary A. Mazurk, of counsel), for A. Christmann & Co., Inc.

Presiding Justice CAMPBELL delivered the opinion of the court:

This is a consolidated appeal, arising from a lawsuit brought by plaintiffs, Washington Courte Condominium Association-Four, and others, claiming loss due to property damage to the Washington Courte Condominium Building Four. On June 20, 1991, following a jury trial, plaintiffs were awarded compensatory damages in the amount of $1,700,000 for breach of express and implied warranties and common law fraud in the sale of condominium units by Washington-Golf Corporation, (Washington-Golf), Raymond J. Adreani, Bruce Adreani, and Edmund J. Beaulieu (cumulatively, defendants.) On August 20, 1991, the trial court entered an order denying defendants' post-trial motions and denying plaintiffs' motion for attorneys fees and costs. In addition, the trial court entered judgment against all defendants on count V of plaintiffs' amended complaint for statutory fraud under the Consumer Fraud and Deceptive Business Practices Act (Ill.Rev.Stat.1991, ch. 121 1/2, par. 261, et seq. (now 815 ILCS 505/1 et seq. (West 1992)).) (Consumer Fraud Act).

On August 22, 1991, the trial court entered judgment against defendants nunc pro tunc as of August 20, 1991, in the sum of $1.7 million on count V of plaintiffs' fifth amended complaint, with the limitation that:

"The judgment amount of $1.7 million is not intended to be in addition to the $1.7 million judgment previously entered on the jury verdict in this cause. Plaintiffs shall be entitled only to a single recovery of $1.7 million by reason of the judgment on the jury verdict and the judgment in this order."

Defendants now appeal from the judgment rendered at trial, and from the trial court's order denying defendants' post-trial motions. Defendants contend that: (1) the fraud verdict was against the manifest weight of the evidence; (2) the trial court improperly allowed evidence at trial regarding defendants' purported negligence; (3) evidence regarding the sale prices of certain condominium units was improperly excluded; (4) the trial court improperly refused to give a jury instruction defining "clear and convincing evidence;" (5) plaintiffs' jury instruction No. 20 misstated the law and was improperly given to the jury; (6) the jury failed to consider plaintiffs' failure to mitigate damages; (7) the jury's damage award was excessive; and (8) the trial court erred in finding a violation of the Consumer Fraud Act. Defendants did not seek to stay enforcement of the judgment against Washington-Golf by posting an appeal bond on that entity's behalf, nor does the record indicate that any appeal bond was posted on behalf of Edmund Beaulieu.

Plaintiffs cross-appeal, arguing that the trial court erred in denying their claim for attorneys fees. While the appeal was pending, plaintiffs filed a motion with this court to strike certain portions of defendants' reply brief. The motion was taken with this appeal.

Defendants' second appeal is from two orders of the circuit court. The first, entered May 17, 1991, dismissed defendants' third-party complaint against third-party defendants Rabin LeNoble & Associates, (Rabin LeNoble), Zorak Rabin, Daniel LeNoble, Hans Rosenow Roofing Company (Rosenow) and A. Christmann and Company, Inc. (Christmann) (collectively "third-party defendants"), pursuant to section 2-619 of the Illinois Code of Civil Procedure, on the ground that it was barred by the then applicable two-year construction statute of limitations (Ill.Rev.Stat.1983, ch. 110, par. 13-214.) The second order, entered June 24, 1991, denied defendants' petition for reconsideration of the trial court's order granting dismissal. For the following reasons, we affirm the judgments of the trial court.

BACKGROUND

Plaintiffs' Complaint

On June 30, 1983, plaintiffs filed their original complaint against defendants, alleging property damage to Building Four as a result of water infiltration. In their five-count, fifth amended complaint, filed June 10, 1991, plaintiffs alleged that defendants: breached an express warranty that Building Four and the individual units would be free from defects in materials and workmanship (count I); breached the implied warranty of habitability (count II); failed to disclose defects in construction (count III): breached their fiduciary duty to disclose, remedy or repair alleged defects in the building (count IV); and violated the Consumer Fraud Act through their omissions and misrepresentations (count V).

Plaintiffs' fifth amended complaint contains the following allegations. In 1975, defendants Raymond Adreani (Ray), Bruce Adreani (Bruce), Edmund Beaulieu (Ed) and Michael Beaulieu (Michael) ¹ formed Washington-Golf for the purpose of developing Washington Courte, a condominium complex in Niles, Illinois. In April 1977, defendants engaged Rabin-LeNoble as architects to prepare preliminary and working architectural and structural drawings for use by Washington-Golf in the construction of the Washington Courte development. Defendants then entered into a subcontract with Rosenow under which Rosenow was to furnish and install a roof on each building of the Washington Courte Development. Defendants also entered into a subcontract with Christmann under which Christmann was to furnish and install the brick and masonry on Buildings Two through Five. Between approximately February 1978 and May 1980, Washington-Golf, acting as the general contractor, developer, and owner of the tract, constructed the five 44-unit condominium buildings of Washington Courte. Building One was completed in late 1978. Buildings Two and Five were completed in mid-1979. Buildings Three and Four were completed in 1980.

In December 1979, prior to the completion of Building Four, defendants learned that other condominium buildings in the Washington Courte Development were experiencing severe water infiltration problems, cracked masonry, and window leaks.

On or about December 15, 1980, defendants began to market and sell units in Building Four. During 1981 and 1982, individuals began occupying their units in Building Four and reporting water infiltration problems to defendants. Defendants responded that all water leakage problems were minor and unit-specific, and that these problems had been or would be cured.

On November 30, 1982, the principals of Washington-Golf held a meeting, at which time the control of the Board was turned over to each individual condominium association in the Washington Courte Development.

In May 1983, plaintiffs engaged the services of a structural engineer who, after his investigation, concluded that Building Four contained various latent structural defects which resulted in substantial water infiltration into both the Common Elements and the Dwelling Units of Building Four.

In count III of their fifth amended complaint, plaintiffs alleged that defendants, Washington-Golf, Ray, Bruce, Ed and Michael, knowingly failed to disclose the existence of severe water infiltration problems, cracked masonry and window leaks in Building Four, which defendants knew to be pervasive and recurrent, provided false assurances to unit owners that all water leakage problems were minor and unit-specific and that these problems had been or would be cured, and that these misrepresentations and omissions were part of a plan or scheme to induce plaintiffs to rely on defendants in purchasing condominium units in Building Four. Plaintiffs further alleged that they reasonably relied on defendants' misrepresentations and omissions and thereby acted to their detriment in purchasing condominium units. Finally, plaintiffs alleged that they suffered damages in excess of $1,500,000.

Trial

Trial commenced on June 3, 1991. The trial lasted almost three weeks and included the testimony of 40 fact witnesses, five expert witnesses, the stipulated testimony of 14 fact witnesses and admission of over 250 exhibits.

A. Development of Washington-Courte

At trial, both Ray and Ed testified that they had experience in constructing and developing single family homes and multi-dwelling buildings. Ray testified that he had been in the construction business for 40 years, and that he was president of Norwood Builders, a general contractor that built 700-900 brick homes starting in the 1950s.

Ed is a licensed real estate broker and a union carpenter. Ed testified that he became a real estate developer in the late 1960s. Between 1970 and 1980, Ed operated his own company, Beaulieu & Sons,...