Find Legal Information

Section 55 provides that "a person who knowingly violates orfails to perform any duty prescribed by any provision of this Actor who discloses any information on the Residential Real PropertyDisclosure Report that he knows to be false shall be liable inthe amount of actual damages and court costs, and the court mayaward reasonable attorney fees incurred by the prevailing party." 765 ILCS 77/55 (West 1994).

Plaintiffs allege that defendants were obligated to providethem with a disclosure report revealing all known material andsubstantial defects within the house pursuant to the PropertyDisclosure Act. Defendants provided a residential real propertydisclosure report indicating that the only defect of the propertywas the bottom drain of the swimming pool. Plaintiffs furtherallege that after they moved into the house "they became aware ofsubstantial material defects within the house which were notdisclosed on the disclosure report and which they learned fromreliable sources that the Defendants were aware of said defectsprior to executing the disclosure report." Plaintiffs furtherstate in the complaint that defendants violated the PropertyDisclosure Act "by intentionally concealing and failing todisclose known defects in the Disclosure Report."

While this is a close question, we again believe thatplaintiffs' allegations meet the minimum standard required atthis posture. Under the language of section 55, plaintiffs maybring a cause of action for damages if they assert thatdefendants disclosed any information on the residential realproperty disclosure report that defendants knew to be false. Although couched within the factual allegation as to howplaintiffs learned of defendants' knowledge, plaintiffs at leaststate that "[d]efendants were aware of said defects prior toexecuting the disclosure report." Also, while couched within aparagraph making the conclusion that defendants violated theProperty Disclosure Act, plaintiffs allege that defendants"fail[ed] to disclose known defects in the Disclosure Report." If, in fact, defendants knew of the defects when they providedthe disclosure report and did not disclose such defects, theremay be a cause of action under section 55. Therefore, we holdthat this count should not have been dismissed under section 2--615 of the Code.

We note that it could be argued that plaintiffs should havealleged with more specificity that defendants actually knew thatthe representations in the disclosure report were false at thetime they made the disclosure, not just that they had knowledgeof the defects prior to making the report. Section 25(a) of theProperty Disclosure Act (765 ILCS 77/25(a) (West (1994)) protectsa seller from liability for any error, inaccuracy, or omission ifit was based on a reasonable belief that a material defect hadbeen corrected. Paragraph 12 states only that defendants hadknowledge of the defects prior to executing the report. Defendants could have had knowledge prior to the execution of thereport, but believed that the problems were corrected andtherefore did not have actual knowledge of defects at the timethey tendered the report and therefore would not be liable underthe Property Disclosure Act. However, section 55 is the sectionauthorizing a cause of action for violations of the PropertyDisclosure Act and while the language of section 25 may presentan affirmative defense under the statute, it is not fatal to theconsideration of the question of whether plaintiffs have setforth a claim under section 55 in this case. Moreover, thestatement cited from paragraph 13 alleges that they failed todisclose known defects in the disclosure report.

The elements of a cause of action for fraudulentmisrepresentation, a form of common law fraud, are: (1) a falsestatement of material fact; (2) known or believed to be false bythe party stating it; (3) intent to induce the other party toact; (4) action in reliance by the other party; and (5) damage asa result of that reliance. Connick, 174 Ill. 2d at 496; Heiderv. Leewards Creative Crafts, Inc., 245 Ill. App. 3d 258, 264-65(1993), citing Soules v. General Motors Corp., 79 Ill. 2d 282,286 (1980). There is a high standard of specificity required forpleading claims of fraud. Board of Education v. A, C & S, Inc.,131 Ill. 2d 428, 457 (1989). The facts must be pleaded withsufficient specificity, particularity, and certainty to apprisethe opposing party of what he is called upon to answer. Board ofEducation, 131 Ill. 2d at 457. The pleadings must containspecific allegations of facts from which fraud is the necessaryor probable inference, including what representations were made,when they were made, who made the misrepresentations and to whomthey were made. Board of Education, 131 Ill. 2d at 457(affirming dismissal of claims where complaint failed to containsufficient particularity); see also Connick, 174 Ill. 2d at 496-97 (allegations of fraudulent misrepresentation held inadequatebecause they were not pled with specificity and particularity).

Upon review of the complaint, we conclude that plaintiffshave failed to meet the specificity required. Plaintiffs do notspecify what false representations were made by defendants. Plaintiffs allege in paragraph 17 that defendants represented onthe disclosure report that "the only known, existing materialdefect with the home was problems [sic] with the pool drain." However, the disclosure report attached to the complaint as partof the contract indicates that defendants did not actually makethat specific statement. See Smith v. Prime Cable, 276 Ill. App.3d 843, 855 (1995) (when claim is founded upon writteninstrument, that instrument must be attached to pleadings; whereinconsistent, such an exhibit controls over factual allegationsin the pleadings).

The report indicates that defendants made a mark to showthat they were aware of material defects in the "plumbing system(includ[ing] such things as water heater, sump pump, watertreatment system, sprinkler system, and swimming pool)." Thereport also includes a statement regarding problems with thebottom drain of the swimming pool. There are numerous otheritems on the disclosure report with check marks under the word"NO," indicating that the seller was not aware of any problemswith those other items. While plaintiffs may be complaining thatsellers made false representations when they checked "no" tothese other items, plaintiffs fail to specify which of theserepresentations they contend were false. Plaintiffs allege inparagraph 18 that "there existed other material defects with thehouse," but they fail to indicate what these other defects were. If called to answer this complaint, defendants would not knowwhat alleged representations they must defend against.

We note that plaintiffs conclude in paragraph 19 thatdefendants misrepresented that there was a fully operational andcomplete sprinkler system on the premises. This paragraph ismerely a conclusion that defendants made a misrepresentation anddoes not meet the standard for claims of fraud. If plaintiffswere attempting to complain that defendants' failure to provide adescription of a problem with the sprinkler system on thedisclosure report was an incomplete description of all of theproblems with the plumbing because there was in fact a problemwith the sprinkler system and therefore that statement was afalse representation, plaintiffs should have made such anaverment. In looking at the complaint, it is difficult toascertain what specific representations plaintiffs claim wereuntrue. Plaintiffs may be complaining of numerous defects withthe house, but they fail to provide allegations of facts as abasis for the claim.

To state a cause of action for fraudulent concealment, alsoa form of common law fraud, plaintiffs must allege thatdefendants concealed a material fact when they were under a dutyto disclose that fact to plaintiffs. Connick, 174 Ill. 2d at490-500. Mere silence in a transaction does not amount to fraud. Heider, 245 Ill. App. 3d at 269, citing Russow v. Bobola, 2 Ill.App. 3d 837, 841 (1972). Silence accompanied by deceptiveconduct or suppression of material facts, however, can give riseto concealment and "it is then the duty of the party which hasconcealed information to speak." Heider, 245 Ill. App. 3d at269; see also Mitchell v. Skubiak, 248 Ill. App. 3d 1000, 1005(1993). While it appears that plaintiffs wished to also plead aclaim of fraudulent concealment, they have failed to sufficientlyset forth this claim. As discussed above, the most fatal errorin pleading this claim is the lack of specificity. The complaintfails to allege what material facts were concealed by defendants. We conclude that the complaint fails to sufficiently state acause of action for fraudulent misrepresentation or concealment. Because the count makes only a general averment that defendantsacted fraudulently when they made the disclosures regarding theproperty and does not point to specific false representations soas to fairly apprise defendants of what they would be called uponto answer, we affirm the dismissal of this claim.

Finally, plaintiffs contend that the circuit court shouldhave granted leave to amend the complaint for the sixth time. Alitigant does not have an absolute right to amend under section2--615, and this court will not disturb a decision dismissing acomplaint with prejudice absent an abuse of discretion. Hume &Liechty Veterinary Associates v. Hodes, 259 Ill. App. 3d 367, 370(1994). In exercising its discretion, the circuit court mayconsider "the ultimate efficacy of the claim and whetherplaintiff had prior opportunities to amend." Hume, 259 Ill. App.3d at 370, quoting Capitol Indemnity Corp. v. Stewart SmithIntermediaries, Inc., 229 Ill. App. 3d 119, 127 (1992) (affirmingdismissal of amended complaint with prejudice where "amendedcomplaint was only slightly less prolix than its predecessor andequally defective in stating a claim").

This was plaintiffs' fifth amended complaint. The recordreveals that the prior dismissals involved similar complaints. The circuit court stated during the hearing on the final motionto dismiss that it had given plaintiffs more than fiveopportunities to correct the problems and determined that itwould have been an abuse of process to allow plaintiffs tocontinue to replead. Defendants contested each amended complaintas it was proffered. We believe that plaintiffs were given ampleopportunity to plead their case and the circuit court did notabuse its discretion in refusing to allow them an opportunity toreplead after this final dismissal.

For the aforementioned reasons, we affirm the circuitcourt's dismissal of the fraudulent misrepresentation andconcealment claims and affirm the denial of plaintiffs' motion toreplead those claims. We reverse the circuit court's dismissalof the claims for breach of contract and violation of theProperty Disclosure Act under section 2--615 of the Code becausewe hold that the fifth amended complaint sufficiently statesthese claims. We express no opinion as to defendants' motion todismiss those claims under section 2--619 of the Code. Thematter was disposed of on the section 2--615 motion and the trialcourt did not rule on the section 2--619 motion.

Affirmed in part and reversed in part; cause remanded.

HOURIHANE, P.J., and HARTMAN, J., concur.