Mikulecky v. Bart

Case Date: 12/10/2004
Court: 1st District Appellate
Docket No: 1-03-0378 Rel

FIFTH DIVISION
DECEMBER 10, 2004


No. 1-03-0378

 

SUSAN MIKULECKY,

           Plaintiff-Appellant,

v.

FRANK BART, Individually; BAIRD AND WARNER
MANAGEMENT GROUP, By and Through its
Agency and/or Employment Relationship with
AMERICA MOYENO, and COMMODORE/
GREEN BRIER LANDMARK CONDOMINIUM
ASSOCIATION, a not-for-profit corporation,
By and Through its Agency and/or Employment
Relationship with AMERICA MOYENO,

          Defendants-Appellees.

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Appeal from the
Circuit Court of
Cook County.











Honorable
John Laurie,
Judge Presiding.

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

Plaintiff, Susan Mikulecky, appeals from entry of an order of the circuit court of CookCounty granting summary judgment in favor of defendant, Frank Bart, on counts I through IV ofplaintiff's third amended complaint alleging misrepresentation in the sale of a condominium unit.(1) On appeal, plaintiff contends that material issues of fact remain in dispute such that entry ofsummary judgment was improper. For the following reasons, we reverse the judgment of the trialcourt, vacate its entry of summary judgment, and remand this matter for further proceedings.

BACKGROUND

The record reveals the following relevant facts. Defendant was the owner of condominium unit No. 508 (the unit), located in the Commodore/Green Brier Landmark CondominiumAssociation (Association), 550 West Surf Street, Chicago, between 1996 and 1999. TheAssociation, which contains in excess of 200 units, contracted for management services withBaird & Warner Management Group (Baird & Warner). Sometime prior to October 12, 1999,defendant submitted his candidacy for a position on the board of directors (Board). On or aboutOctober 12, 1999, members of the Board met in some capacity to address capital expenditures forthe year 2000 and to prepare a draft budget. On October 27, 1999, the draft budget was revised,resulting in a proposed budget, which was circulated to unit owners by Baird & Warner.

Sometime in October 1999, defendant listed his unit for sale with a licensed realtor. On orabout November 3, 1999, defendant withdrew as a candidate for the board of directors.

On November 8, 1999, plaintiff entered into a written real estate contract to purchasedefendant's condominium unit. On November 10, 1999, during the "attorney approval" period ofthe real estate contract, plaintiff's attorney, Mary York, requested that defendant provide a copyof the proposed budget for the Association, along with a statement of capital expendituresanticipated by the unit owners within the current or succeeding two fiscal years, pursuant tosection 22.1 of the Illinois Condominium Property Act (the Condominium Act or the Act). 765ILCS 605/22.1(a)(3) (West 2002).

In a letter dated November 15, 1999, defendant's attorney, Joseph F. Madonia, stated thatdefendant did not agree to disclosure of any capital expenditures "anticipated" by the Associationwithin the year 2000, but would disclose any such expenditures that were "approved." York rejected Madonia's modification, crossing out the paragraph in his letter wherein he requested themodification and signed at the bottom of the page.

Thereafter, York provided defendant with a blank condominium disclosure statement(Disclosure) to be completed by a representative of the Association.

The Association's property manager, America Moyeno, an employee of Baird & Warner,completed the Disclosure on November 18, 1999, providing that the following capitalexpenditures were anticipated for the current and next two years: facade repairs including tuckpointing and brick replacement; roof replacement; concrete repairs/replacement; and "HVAC"renovations. Madonia sent York a copy of the proposed budget, along with the completedDisclosure.

On November 23, 1999, York reviewed the completed Disclosure and contacted Moyenoto ask if there were "sufficient reserves to cover anticipated capital expenditures as outlined inparagraph 3 of said disclosure." At that time, Moyeno informed York that no special assessmentswere anticipated and that the Association possessed sufficient reserves to cover the cost of anyanticipated expenditures. York approved the Disclosure and plaintiff completed the purchase ofthe unit and took possession of the property on January 29, 2000.

On or about May 10, 2000, plaintiff attended a meeting of the Board and learned for thefirst time that the Association planned numerous capital expenditures for the building includingcustom replacement windows at each owner's expense. At that time, plaintiff received a copy of aletter dated October 27, 1999, signed by Patricia A. Bialek, vice president of Baird & Warner. The letter purported to be a cover letter circulated to all unit owners along with the proposedbudget on October 27, 1999, and detailed the proposed capital expenditures for 2000, includingprobable sources of funding for new custom replacement windows:

"The Board is also researching a window replacement program tobegin in early 2000. The scope of this work will exceed capitalreserve funds currently available therefore we are also investigatingthe ability of the Association to borrow funds to make thesenecessary improvements. The Securing of a loan would result in anincrease to assessments therefore after the capital program isfinalized the 2000 operating budget will be redrafted to include aloan payout."

Plaintiff was notified that she was personally responsible for window replacement expenses for herunit totalling $10,370.01.

On December 8, 2000, plaintiff filed a five-count complaint against defendant andcodefendants for intentional misrepresentation, fraudulent misrepresentation, fraudulentconcealment, breach of contract and violations of the Condominium Act, seeking monetarydamages for alleged failure to disclose certain capital expenditures as communicated in the letterof October 27, 1999.

In a discovery deposition, Patricia Bialek testified that the October 27, 1999, letter wascirculated to all unit owners under the doors of their respective units, along with the proposedbudget for the year 2000. In his discovery deposition, defendant expressly denied ever havingreceived the letter of October 27, 1999, and denied knowledge of the upcoming windowreplacement program.

On October 25, 2002, this matter was arbitrated pursuant to the circuit court of CookCounty rules of arbitration and Supreme Court Rule 86(a) (155 Ill. 2d 2d R. 86(a)).(2) At thattime, the panel of arbitrators issued an award finding in favor of plaintiff and against theAssociation in the amount of $20,000, and finding in favor of defendant and against plaintiff on allcounts. At oral argument, the parties informed this court that the arbitration award was rejected.by the parties and that the case reverted to the trial court.

On November 14, 2002, defendant filed a motion for summary judgment and supportingmemorandum. Therein, defendant argued that he was entitled to summary judgment because the"uncontroverted evidence" shows that: (1) defendant made full disclosure under the terms of thereal estate contract and the Condominium Property Act; (2) plaintiff received a statement from theAssociation Board containing all the anticipated capital expenditures; (3) the informationcontained in the Disclosure was complete and accurate as of the date of disclosure; (4) plaintiff'sreal estate counsel verified with the Board representative that the information contained on theDisclosure was accurate and complete prior to the real estate closing; and (5) no action was takenby the Board to approve additional capital expenditures until several months after the sale of thecondominium.

In support of his motion, defendant included the affidavit of Moyeno, dated August 21,2001, wherein she avers that as of November 18, 1999, the Disclosure she executed was completeas to proposed capital expenditures.

On December 23, 2002, the trial court granted summary judgment in favor of defendantand against plaintiff on all counts of plaintiff's complaint. Plaintiff's timely appeal followed.

OPINION

On appeal, plaintiff contends that the trial court erred in granting summary judgment infavor of defendant.

Summary judgment is appropriate where the pleadings, affidavits, depositions, admissions,and exhibits on file, when viewed in the light most favorable to the nonmovant, reveal that there isno genuine issue as to any material fact and that the movant is entitled to judgment as a matter oflaw. 735 ILCS 5/2-1005 (c) (West 2002); Espinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d107, 113 (1995). The purpose of summary judgment is to determine whether a question of factexists. Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 517 (1993). Although summaryjudgment is encouraged to aid in the expeditious disposition of a lawsuit, it is a drastic means ofdisposing of litigation and should thus be allowed only when the movant's right is clear and freefrom doubt. Busch v. Graphic Color Corp., 169 Ill. 2d 325 (1996); Purtill v. Hess, 111 Ill. 2d229, 240 (1986). Therefore, where reasonable persons could draw divergent inferences from theundisputed material facts or where there is a dispute as to a material fact, summary judgment isproperly denied and the issue is decided by the trier of fact. Espinoza, 165 Ill. 2d at 114. Ourreview of the evidence is de novo. Espinoza, 165 Ill. 2d at 113.

Plaintiff contends that a question of fact remains as to defendant's knowledge of theproposed window replacement expenditure. Plaintiff argues that whether defendant intentionallywithheld the letter of October 27, 1999, purportedly sent to all condominium unit owners as acover letter along with the proposed budget for the year 2000, and which revealed an intention toexpend capital on a building-wide window replacement at each unit owners' expense, constitutes an unresolved material question of fact.

Plaintiff argues that material questions of fact remain in dispute as to whether defendantviolated section 22.1 of the Condominium Act. We therefore examine the history of the Act inorder to ascertain its legislative intent. In 1963, the Illinois legislature enacted the IllinoisCondominium Property Act to give statutory recognition to the form of property ownershipknown as the "condominium." See Ill. Rev. Stat. 1963, ch. 30,