LaSalle National Trust v. Board of Directors of the State Parkway Condominium Ass'n
Case Date: 12/19/2001
Court: 1st District Appellate
Docket No: 1-00-2062 Rel
THIRD DIVISION No. 1-00-2062
PRESIDING JUSTICE HALL delivered the opinion of the court: The plaintiffs, LaSalle National Trust NA, as trustee underTrust number 116409 and Howard M. Robinson,(1) filed a complaintfor declaratory judgment against the defendant, the board ofdirectors of the State Parkway Condominium Association (theBoard). The complaint sought a judicial determination of therights and obligations of the parties with respect to thefurnishing of electricity to a condominium unit owned by theplaintiffs. The trial court granted the motion of Alan O. Amosand Marcia Lazar (the intervenors) to intervene and file acomplaint. The Board filed a counterclaim seeking a judgmentagainst the plaintiffs for unpaid assessments. All parties filed motions for summary judgment. The trialcourt granted the summary judgment motions of the plaintiffs andthe intervenors and denied the Board's motion for summaryjudgment. The Board appeals. The sole issue on appeal is whether the trial court erred ingranting summary judgment to the plaintiffs and the intervenorsand denying summary judgment to the Board. The following facts are taken from the pleadings and theaffidavits in the record. An entity known as the 1445 Limited Partnership (thedeveloper) renovated and converted the property at 1445 NorthState Parkway to condominium ownership. On or about November 5,1992, the developer recorded a declaration of condominiumownership and easements, restrictions, covenants and bylaws (theDeclaration) for the State Parkway Condominium. As of April 18,1994, 75% of the condominium units had been sold. In accordancewith the terms of the Declaration, an initial meeting of theowners took place at which time a unit-owner controlled board ofdirectors was elected. In the spring of 1995, it was discovered that the building'selectrical service was inadequate to provide power to unit 2701,owned by the plaintiffs, and to unit 2703, owned by theintervenors, both of which occupied the twenty-seventh andtwenty-eighth floors of the building. Prior to the renovation,the twenty-eighth floor had not been used for residentialpurposes, but had housed a laundry room, storage areas andhousing for mechanical elements that served the entire property. On or about July 31, 1995, the developer granted anonexclusive easement to the plaintiffs and the intervenors toallow them to access an existing electrical line running to thetwenty-eighth floor which provided power for the common elements. The easement grant provided that the unit owners would reimbursethe Board for the electrical power usage at the same rate paid bythe Board to the electrical service provider and pay a fee, notto exceed 5% of the cost of electrical power used by each unit,to the Board to reimburse administrative costs. The plaintiffsand the intervenors paid for the installation of transformers andmeters to facilitate the supply of electricity to their units. Commonwealth Edison charged an industrial rate for electricalusage with respect to the utility line that provided electricalpower to units 2701 and 2703. On or about February 18, 1997, the Board granted to theowners of units 2701 and 2703 a perpetual, nonexclusive easementto connect to an electric utility line serving the commonelements of the building for the purpose of providing electricalpower to those units. The easement grant further provided thatthe cost of the electricity would be charged at the residentialrate plus tax and that a fee of 5% of the electric cost would becharged to cover the Board's administrative costs. Based upon its easement grant, the Board demanded that theplaintiffs and the intervenors pay the Board for electricalservice and the applicable taxes at the residential rate, eventhough the Board paid for electrical power based upon theindustrial rate, which was lower than the residential rate. Inresponse, the plaintiffs filed a complaint for declaratoryjudgment against the Board, in which they were joined by theintervenors. The Board filed a counterclaim for unpaidassessments and related charges against the plaintiffs. All parties filed motions for summary judgment. The circuitcourt granted summary judgment to the plaintiffs and theintervenors and denied summary judgment to the Board. Thistimely appeal followed. Summary judgment is proper only where the pleadings,depositions, admissions, and affidavits demonstrate that there isno genuine issue of material fact and that the movant is entitledto judgment as a matter of law. Cozza v. Culinary Foods, Inc.,311 Ill. App. 3d 615, 619, 723 N.E.2d 1199, 1203 (2000). In thiscase, neither party asserts that material questions of factexist, and therefore, summary judgment is appropriate in thiscase. Because the propriety of an order granting summaryjudgment involves a question of law, the reviewing courtconsiders the matter de novo. Cozza, 311 Ill. App. 3d at 619-20,723 N.E.2d at 1203. The question to be resolved in this case is which easementcontrols, the one recorded by the developer or the one recordedby the Board. The Board's right to grant an easement is notcontested by the plaintiffs and the intervenors. When a controversy regarding the rights of a condominiumunit owner in a condominium arises, the court must examine anyrelevant provisions of the Condominium Property Act (the Act)(765 ILCS 605/1 et seq. (West 1994)) and the Declaration orbylaws and construe them as a whole. Carney v. Donley, 261 Ill.App. 3d 1002, 1008, 633 N.E.2d 1015, 1020 (1994). The Board maintains that nothing in the Act grants adeveloper the right to create a perpetual easement after cedingcontrol of the board to the unit owners. However, it is equallytrue that there is nothing in the Act which expressly denies to adeveloper the right to create an easement after control of theproperty has passed to the board of directors of the board butwhile the developer still retains an interest in the property. Therefore, the resolution of this issue rests upon the provisionsof the Declaration. See Carney, 261 Ill. App. 3d at 1008, 633N.E.2d at 1020. Where the facts are not disputed and because condominiumdeclarations are covenants running with the land, the court needonly examine the language of the Declaration, to the extent thatthe language is unambiguous, to determine whether summaryjudgment for either party was proper. Carney, 261 Ill. App. 3dat 1008, 633 N.E. 2d at 1020. "'The paramount rule for theinterpretation of covenants is to expound them so as to giveeffect as to the actual intent of the parties as determined fromthe whole document construed in connection with the circumstancessurrounding its execution.' [Citation.]" Carney, 261 Ill. App.3d at 1008, 633 N.E.2d at 1020. With regard to the granting of easements, the Declaration inthis case provides in pertinent part as follows: "3.17 Utility Easements. The *** public utilitiesserving the Property are hereby granted the right to lay,construct, renew, operate, repair, replace and maintain ***equipment, into and through the Common Elements for thepurpose of providing utility services to the Property,together with the reasonable right to ingress to and egressfrom the Property for said purpose. The Developer, Trusteeor Board may hereafter grant other or additional easements,for utility or entertainment purposes for the benefit of theProperty over, under, along and on any portion of the CommonElements, and each Owner, by acceptance of a Deed ofConveyance with respect to each Unit, hereby grants theBoard an irrevocable power of attorney to execute,acknowledge and record or register *** such instruments asmay be necessary to effectuate the foregoing. 3.21 Blanket Easement in Favor of Trustee and OtherParties. The right of the Unit Owners to use and possessthe Common Elements as set forth in Section 3.09 shall besubject to a blanket easement over the Common Elements infavor of the Trustee and the Developer *** and assigns, forthe purpose of (i) access and ingress to and egress from theProperty or any part thereof, (ii) construction,installation, repair, replacement and restoration ofutilities, buildings, landscaping and any other improvementson the Parcel or any part thereof, including the right torestrict and regulate access to the Common Elements for thepurposes of completing, remodeling, rehabilitating and otherconstruction of the Building, Common Elements or Units inthe Building, and (iii) the installation and maintenance ofsigns advertising the residences on the Parcel or any partthereof, and signs directing potential purchasers to thesales office and models erected in connection with suchresidences, and for such purposes as are described inSection 7.01(k) hereof. The foregoing easements in favor ofthe Trustee and the Developer shall continue until such timeas neither the Trustee nor the Developer holds legal titleto, or the beneficial interest in any trust holding legaltitle to, any Unit Ownerships, at which time such easementsshall cease and be of no further force and effect withoutthe necessity of further action." (Emphasis added.) The Board contends that the developer lost the right torecord any easements as of April 18, 1994, when control of theproperty was turned over to the unit owners upon the election ofthe first unit-owner board of directors, and therefore, only theBoard had the right to grant an easement after that date. In this case, section 5.06 of the Declaration provided asfollows: "(a) The initial Board of Directors designated by theTrustee or Developer pursuant to Section 5.01 hereof shallconsist of five (5) directors who shall serve withoutcompensation. Such initial Board shall serve for a periodcommencing on the date this Declaration is Recorded andending upon the qualification of the directors elected atthe initial meeting of Voting Members held as provided inSection 5.04(b) hereof." Section 5.06 is in accordance with section 18.2 of the Act,which provides in pertinent part as follows: "(a) Until election of the initial board of managers,the same rights, titles, powers, privileges, trusts, dutiesand obligations vested in or imposed upon the board ofmanagers by this Act and in the declaration and bylaws shallbe held and performed by the developer. (b)(i) The election of the initial board of managersshall be held not later than 60 days after the conveyance bythe developer of 75% of the units, or 3 years after therecording of the declaration, whichever is earlier." 765ILCS 605/18.2(a), (b)(i) (West 1994). In addition, pursuant to section 5.06(f) of the Declaration, oncethe board is elected, the developer is required to turn over tothe elected board the condominium documents, funds, schedules ofproperty and the like. See also 765 ILCS 605/18.2(d) (West1994). Under the above Declaration provisions, we conclude that theparties intended that upon the election of the board of directorsby the unit owners, control of the property would pass from thedeveloper to the board which would assume the powers formerlyexercised by the developer. However, we must now determine if under the Declarationprovisions the developer retained any authority to grant aneasement even though control of the property had passed to theBoard. The Board argues that section 3.21 does not authorize thedeveloper to grant a permanent utility easement because a utilityeasement is not one of the specific purposes for easements listedin section 3.21 and because under section 3.21, such easementsare temporary. The plaintiffs and the intervenors respond, first, that theBoard failed to raise those arguments before the circuit courtand, therefore, it may not raise them before this court. However, the plaintiffs and the intervenors acknowledge that theyrelied upon section 3.21 in their argument for summary judgmentbefore the circuit court. In fact, in rendering its decision inthis case, the circuit court read the pertinent portions of bothsection 3.17 and section 3.21 into the record. In any event, therule of waiver is an admonition to the litigants, not alimitation upon the jurisdiction of the reviewing court. American Federation of State, County & Municipal Employees,Council 31, AFL-CIO v. County of Cook, 145 Ill. 2d 475, 480, 584N.E.2d 116, 118 (1991). The plaintiffs and intervenors contend that the developerhad the absolute right under the Declaration to make the July 31,1995, grant of easement. They maintain that section 3.17expressly confers upon the developer the right to grant utilityeasements, and section 3.21 conferred such power upon thedeveloper until such time as the last unit in the project hadbeen sold, which did not occur until April 2000. Under section 3.21, the developer has a blanket easement for"(ii) construction, installation, repair, replacement and restoration of utilities." However, section 3.21 furtherprovides that the "foregoing easements" as opposed to the rightto grant an easement, "in favor of *** the Developer *** andassigns" continue only until the developer no longer has anylegal or beneficial interest in the units. The trial courtinterpreted that as meaning that until the developer as thedeveloper no longer had an interest in the units as opposed tothe developer as a unit owner. None of the parties in this casedispute that interpretation. Contrary to the arguments of the parties in this case, weare of the opinion that section 3.21 has no bearing on thedeveloper's continuing right to grant an easement. First, unlikesection 3.17, under section 3.21 the developer does not have thepower to grant an easement. Instead, section 3.21 grants to thedeveloper a blanket easement, which may be assigned, for certainspecified purposes, all of which concern the completion of thebuilding and allow the developer to continue to work in thebuilding even though the Board has taken over the building'smanagement. This conclusion is supported by the fact that theeasements under section 3.21 are of limited duration, ending oncethe developer no longer has an interest in the property. Turning to section 3.17, that section gives the developer,the trustee or the board the right to establish utilityeasements. Read by itself, the language of section 3.17 suggeststhat the developer has the power to grant an easement at anytime, regardless of whether the developer still had an interestin the property as the developer. However, section 3.17 must notbe read in isolation but must be construed in light of the otherprovisions of the Declaration. Construing section 3.17 together with the other provisionsof the Declaration discussed above, we determine that the intentof the parties was to pass control of the property from thedeveloper to the unit owners, who would, through their electedboard of directors, assume the powers formerly exercised by thedeveloper, such as the granting of easements. The fact thatsection 3.17 specifies the "Developer, Trustee or Board"indicates that the power to grant the easement was intended to beexercised by whichever of the three entities was in control atthe time the easement was sought. Once control was placed withthe Board, the developer no longer had the right under section3.17 to grant an easement. Our interpretation is supported by the language in section3.17 specifying that the unit owners grant to the Board the powerof attorney to execute, acknowledge and record the documentsnecessary to establish the easements under that section. Thefact that the unit owners granted the power of attorney to theBoard and not to the developer or the trustee is furtheracknowledgment that, once the Board was in existence, neither thedeveloper nor the trustee retained any power to grant easements. Finally, we are of the opinion that the provisions of theAct which require the transference of authority from thedeveloper to the board of managers would be undermined if thedeveloper were allowed to exercise the power to grant easementslong after it ceased to have an interest in the property. See 765ILCS 605/18.2 (West 1994). Therefore, the circuit court erred in awarding summaryjudgment to the plaintiffs and the intervenors. Since there areno issues of material fact and no issue has been raised as to theright of the Board to grant an easement, this case is remanded tothe circuit court for entry of an order granting the Board'smotion for summary judgment and for a determination of thejudgment amount of the Board's counterclaim against theplaintiffs. The judgment of the circuit court of Cook County is reversedand the cause remanded with directions. Reversed and remanded with directions. CERDA and BURKE, JJ., concur.
1. It was acknowledged at oral argument that Mr. Robinson wasthe developer of the project. |