REAL ESTATE LAW PRACTICE “KEYPOINTS”

(AUGUST, 2002)

 

By Steven B. Bashaw

Steven B.  Bashaw, P.C.

Suite 1012

1301West 22nd Street

Oak Brook, Illinois  60523

Tel.: (630) 472-9990

Fax.: (630) 472-9993

e-mail:  sbashaw @bashawlaw.com

(Copyright 2002- All Rights Reserved)

 

 

In addition to encouragement from the Illinois Institute of Continuing Legal Education and the Illinois State Bar Association’s Real Estate Section Council,  it should be noted that Chicago Title Insurance Company helps underwrite the monthly production of these real estate law “Keypoints”. Chicago Title is committed to the role of attorneys in real estate transactions and their continuing education in this area.  Its staff attorneys are pleased to offer their view points on various developments in the law as set forth below from the perspective of a title company serving the public and the attorneys who represent their clients in real estate transactions.

 

1.          HISTORICAL LANDMARK STATUS,  BUILDING PERMITS,  ANIMUS and EQUAL PROTECTION:

 Villages do not always appear to be even-handed in the manner in which they deal with their citizens when it comes to building permits, and owners are sometimes less than forthcoming in the manner in which they attempt to complete their projects.  Once the accusations begin to fly, the question often becomes whether the “animus” between the village officials and the owners rises to the level of a denial of equal protection under the law.  In Nevel v. Village of Schaumburg, (7th Cir.,  7/26/02), http://www.ca7.uscourts.gov/op3.fwx?submit1=showop&caseno=01-1966.PDF , the actions of the Village of Schaumburg did not meet the “totally illegitimate animus” test necessary for the owner to prevail;  i.e., that the governmental action “was a spiteful  effort to ‘get’ him for reasons wholly unrelated to any legitimate state objection.”, and the homeowner lost; but the facts are pretty “close”.

Marty and Laura Nevel purchased the Kern-Schmidt mansion. It was  built in 1930 and designated a historic landmark by the Village while owned by their predecessor, Girard Kretzschmar. It  was undisputed that the Village failed to send notice to Kretzschmar of the designation as required by the Village’s own Ordinance.  Nonetheless, public notice of the designation hearing was published, and notice of the designation was recorded in the Recorder’s Office.    When the Nevels later purchased the property they were aware it had historical significance, but claim that they did not know that it had been officially so designated.  The recorded designation was discovered by their title insurer, and not reflected on their title insurance policy. 

After purchase, the Nevels decided that they were going to remodel the property and cover the exterior with either ‘dryvit’ or  siding because a potential lead paint hazard.  On at least two occasions, Mr. Nevel discussed the siding with the Village Senior Planner, and he suggested vinyl siding.  At no time did the Planner advise the Nevels that they would have to obtain approval of the village due to the historical designation.  Nevel contracted with Nu-Concepts to install the siding and purchased $125,000 of material.  Nu-Concepts then applied for, and was granted, a permit to install the siding. (Nu-Concepts did not know that Nevel received a telephone call the day before the permit issued from the Village historical commission relating to the necessity for Village approval of any exterior work, and the Village secretary who issued the permit followed the ordinary process in issuing the permit of only checking to see if the contractor was licensed and bonded; i.e.,  the process did not question the historical status of the property.)   While Nu-Concepts was proceeding with installation of the siding, Nevel proceeded with a request before the Village to either approve the siding or revoke the historic designation.

When the Village Commission met to consider his requests, it voted unanimously to deny both the request to approve the siding and the request to revoke the designation.

Nevel, on the advice of his counsel, and based on the fact that the permit to install the siding had been issued and not revoked, directed Nu-Concepts to continue with its work. A month thereafter, when 85% of the work was complete, the Village Code Enforcement Department discovered the situation, posted stop-work orders, issued citations against Nevel, and ordered Nu-Concepts employees to ease work and leave the site or be arrested.   Thereafter, the Village denied water and sewer service to the property, and Nevel was informed that he would be responsible for removing the siding that had been “illegally installed”.

At a trial on the citations, following two days of evidence and testimony, the Circuit Court Judge granted a directed verdict in favor of Nevel finding that there had been no misrepresentations made in obtaining the permit, and that the Village was required to revoke the building permit before it could enforce a stop-work order.  The matter did not end there, however, as the Village then refused to repair a broken water meter on the property unless Nevel signed an acknowledgment that the repair did not “waive the requirement that all exterior work conform to the prior decision of the Village Board”.  As a result, Nevel filed a three count complaint against the Village.  The first count argued that the historical designation was void ab initio for failure to given notice to the then owner,  Kretzschmar. The second count alleged that the Nevel’s equal protection rights had been violated in that they were treated differently, (i.e., more harshly), than similar individuals based on the “totally illegitimate animus toward the plaintiff by the defendant.” (The third count was based on state law and both the District and the Circuit Court declined to exercised jurisdiction over this cause.).

The validity of the designation under the ordinance was summarily upheld despite the failure to provide notice to Kretzschmar.  The Ordinance requires only “due notice”, not personal, written notice, to the owner, and it was undisputed that there was publication notice prior to the designation.  The Court also ruled that the notice provision in the ordinance was not “mandatory”,  and the failure of the Village to give personal notice to the owner was not a condition to the effectiveness of the designation:  “While it is undisputed that the Village failed to comply with its own procedural ordinances, this failure is insufficient under Illinois law to justify invalidation of the designation”.  Most importantly, the Nevels were seeking to assert the “due process” rights of Kretzschmar and not their own; “The Nevels lack standing to raise a claim based on the due process rights of a third party.”

Whether the Village acted with sufficient “animus” against the Nevels to rise to the level of a denial of equal protection was a larger issue.  Citing the Village of Willowbrook v. Olech, (2000), 528 U.S. 562, for the law that an owner can proceed as a “class of one” for  equal protection against a municipality where it can be shown they were (1) intentionally treated differently from other similarly situated individuals without any rational basis, or (2) the government  treated them differently than similarly situated individuals differently based on a “totally illegitimate animus”, the Court nonetheless upheld the summary judgment in favor of the Village.  The Nevels contended that the Village denied their requests based not on historical preservation considerations, but in order to punish them for beginning the installation of the siding before approval was granted, and afterwards continued to punish them in spite of the trial court’s ruling in the owner’s favor on the citations.  The Seventh Circuit affirmed, holding that “Even if he could be shown that the Board denied the Nevels’ request in order to punish them…this would not constitute a totally illegitimate animus”, because “the Village Board has a legitimate interest in ensuring that its rules and regulations are upheld.” 

(hmmmm…the law is set forth; the facts seemed to fit to me;  perhaps I’m just getting too ‘pro-owner’ in my later years.)

2.  REAL ESTATE CONTRACTS;  FRAUD IN THE INDUCEMENT, CONSUMER FRAUD, RESCISSION, ATTORNEY’S FEES, PUNITIVE DAMAGES AND PREJUDGMENT INTEREST:

It might not be hyperbole to say that “This case has it all” when it comes to real estate contract litigation.

David and Patricia Kleczek brought a suit against Robert and Anne Marie Jorgensen for fraud in the inducement, breach of express and implied warranty, common law fraud, and statutory fraud under the Consumer Fraud and Deceptive Business Practices Act, all  relating to the sale of a home in Kleczek v. Jorgensen, (4th Dist., 4/16/2002), http://www.state.il.us/court/Opinions/AppellateCourt/2002/4thDistrict/April/Html/4010295.htm  .  Following the jury verdict in favor of the buyers, the trial court also ordered the sellers to refund the purchase price and declared a rescission of the contract, granted buyer’s  request for attorney’s fees, but denied punitive damages and prejudgment interest.  Then, after the judgment was entered, the buyers petitioned the court to modify the judgment in order to sell the home to a third party.  The court granted the motion to modify the judgment to allow the sale of the home, but refused to award money damages equal to the difference in the ultimate sale price and the rescinded contract amount.

The sellers appealed contending that there was error in the award under the Consumer Fraud Act and granting the buyer’s attorney’s fees against them.  The buyer appealed the denial of punitive damages, prejudgment interest, and contended that the judgment should have been modified as they requested to grant them the difference between the contract price and their sale price to a third party.  The Fourth District,  of course, affirmed in part, reversed in party, and remanded.

The background of the case revolved around the fact that the sellers were in the business of building new homes in  Deer Run Estates, a subdivision they created on 42 acres of land.  The particular home sold to plaintiffs in this case, however,  was built with the avowed intention that it be Jorgensen’s primary residence.  Mr. Jorgensen installed the plumbing,  even though he was not a plumber, and was orally notified by the inspectors that he had done so defectively and would have to employ a licensed plumber to correct the problems. He did not do so; or at least the problems were not corrected.  The next year, Jorgensen sold the house to Kleczek by a contract which contained a representation that no notice had been received of any code violations. Sellers did not disclose the oral advice from the inspectors relating to the plumbing problems or the letter  they received prior to closing memorializing the inspectors visit and providing a detailed list of repairs that were necessary.  After the closing, the plumbing sprang leaks causing water damage, the buyers discovered that a toilet was served by a hot rather than cold water line, and there was a strong odor of sewage in the basement.  Initially, Jorgensen made some repairs under the one year builder’s warranty, but then refused to make any more repairs, and this case resulted.

Turning first to the issue of whether the Consumer Fraud Act applied to the subject sale, the Fourth District recounts the series of decisions including Zimmerman v. Northfield Real Estate and Anderson v. Stowell holding that the Act does not apply to the private sale of real estate by home owners of single family residences. The trial court’s finding that the Jorgensens were in the business of selling homes and in the course of developing this land supported the determination that this was a commercial rather than a private sale. The seller’s assertion that a distinction should be made because they “intended” to live in this particular home as their residence was rejected.

The seller’s also attempted argued that their representation in the contract was that there had been no “issuance” of a code violation notice at the time of the agreement because none had yet been received in writing.  This  was rejected as “quite literally true, but it left out a material qualifying fact: that the Department had found violations of the plumbing code.  Without the addition of the highly germane fact, the representation in the contract was misleading…in that it created the false impression…”  A statement which is technically true as far as it goes may nevertheless be fraudulent, where it is misleading because it does not state matters which materially qualify the statement as made.

The failure to honor the one year warranty by the builder, however, was held to not be a violation of Consumer Fraud.  The Court draws a distinction, (as has the Second District), between a deceptive practice and merely failing or refusing to do that which one has promised to do in a contract.  “That type of ‘misrepresentation’ occurs every time a defendant breaches a contract.”, but is not necessarily a deceptive practice allowing the refused party to file a suit and turn a breach of contract into a consumer fraud action.  Likewise, the trial court’s denial of the buyer’s request for punitive damages was affirmed.  Section 10a of the Consumer Fraud Act allows punitive damages in the discretion of the trial court. “However, courts should award punitive damages only for conduct that is outrageous, either because the defendant’s motive was evil or the acts showed a reckless disregard of the rights of others.  (Citation) The purpose of awarding punitive damages is to punish the wrongdoer and, in doing so, deter that party and others from committing similar wrongful acts. (Citation) Punitive damages are not favored in the law; thus courts should be careful never to award such damages improperly or unwisely. (Citation).”  Prejudgment interest is also a matter recoverable in the discretion of the trial court,  when warranted by equitable considerations, and a judgment which the appellate courts will not  ordinarily not disturb on appeal.

Most interesting is the final portion of the decision relating to the modification of the judgment relative to the rescission award.  Noting an absence of case law, but resorting to 37 Am Jur 2d, the decision holds that “Seeking relief by rescission is not deemed an election so irrevocable as to preclude an amendment claiming damages for the fraud, although there is contrary authority.”  Except in default judgment cases where the plaintiff is precluded from relief outside the prayer in the complaint, the Court saw no reason why a complaint could not be amended at any time to request relief conforming to the proofs and upon terms that do not prejudice the adverse party by reason of surprise.   Here the trial court indicated that it would grant relief outside of strict rescission, but only if the plaintiff filed their sixth amended complaint.  The Fourth District held this was an appropriate step to assure the defendants were protected “against prejudiced by reason of surprise” and affirmed this condition.

 

3.  LANDLORD/TENANT: FIRE LOSS, INSURANCE AND TENANT LIABILITY:

In Towne Realty v. Shaffer, (4th Dist., 6/28/2002), http://www.state.il.us/court/Opinions/AppellateCourt/2002/4thDistrict/June/Html/4010591.htm ,  the Court was confronted with a suit by the Landlord against the Tenant to recover for property damage in an apartment caused by the tenant’s negligence in handling a lit candle or oil lamp that resulted in a fire.  The lease was drafted by the landlord for a three month period and specifically included a “yield-back” provision that the tenant was to keep the apartment in good order and repair and yield up the premises in good condition and repair, ordinary wear and tear excepted.  The lease also provided the tenant would be responsible for any damage except as is caused by normal wear and tear. There was no specific provision for responsibility in the event of damage by fire during the term of the lease.   When the fire occurred, the Landlord filed suit for $671,463.95, alleging that the Tenant acted negligently and was responsible under the lease terms.  The Tenant filed a motion to dismiss arguing that the intent of the parties under the lease was that the Landlord would maintain fire insurance upon the premises and should be limited to recovery under the policy.  The Fourth district affirmed the dismissal and finding by the trial court  that the Tenant was a co-insured under the Landlord’s policy and the Landlord failed to state a cause of action.

Looking to the “seminal case, Cerny-Pickas & Co v. C.R. Jahn Co., (1955), 7 Ill.2d 393, 131 N.E.2d 100, where the Illinois Supreme Court rejected “the construction urged by the lessor (because) it would be necessary for both parties to the lease to carry fire insurance if they are to be protected. The lessee would have to insure against fires due to his negligence, and the lessor against fires due to other causes.”, the Fourth also noted “The ancient law has been acquiesced in, and consciously or unconsciously, the cost of insurance to the landlord, or the value of the risk,  enters into the amount of rent.”    The presumption then, is that the landlord undertakes the obligation to obtain insurance and factors the  cost of the premium into the rent charged.  If the landlord’s policy were to exclude negligent acts of the tenant, the tenant’s only method of protecting himself would be to obtain a separate policy insuring against his own negligence.  Customarily, insurance policies cover both accidental and negligent loss, and nothing in the lease here indicated that the parties presumed otherwise or intended the tenant be liable for any fire loss.  The tenant presumes to contribute to the payment of insurance premiums by payment of rent,  and to conclude otherwise would defeat the reasonable expectations of the parties.  Therefore, under the instant lease, even though no mention was made relating to liability for loss due to fire, standard custom and usage would lead to a reasonable person to believe that the Landlord’s coverage would negate any intention to recover from the tenant. The provision in the lease that the Tenant would not do anything which would increase the risk of loss or increase the amount of premiums also was indicative of the intent of the parties that insurance proceeds were the source of recovery.  Finally, “Where a landlord has drafted the lease, a court will not impose a responsibility upon the tenant unless the circumstances and the contract clearly indicate that the tenant intended to assume such responsibility…Prospective tenants ordinarily rely upon the owner of the dwelling to provide fire protection for the realty (as distinguished from personal property) absent an express agreement otherwise.”

Justice Cook dissented.  He reasoned that since both the maintenance-of–the-premises clause and the yield-back clause in the lease provide that the Tenant shall be responsible for any damage to the premises except that caused by ordinary wear and tear, fire damage must have been intended by the parties to be the responsibility of the Tenant; i.e., it is neither ordinary wear or tear for property to burn to the ground.  Further, “Making individuals responsible for the damage they cause encourages individuals to act carefully.  We should be cautious in destroying that incentive.”  Justice Cook notes that “if there were no insurance here, if this were simply a suit between the landlord and the tenant, the tenant would clearly be liable. There is no justification for changing that result when the parties have purchased insurance.”

 

 4.  ZONING; ZONING,  ANIMUS and EQUAL PROTECTION:

In a case that has a lot in common with the earlier discussed case of  Nevel v. Village of Schaumburg, (7th Cir.,  7/26/02), http://www.ca7.uscourts.gov/op3.fwx?submit1=showop&caseno=01-1966.PDF,  the issues surrounding animus between and builder and a village, a  resultant refusal to approve a  subdivision plat,  and a allegation of  denial of equal protection were presented in Purze v. Village of Winthrop Harbor , (7th Cir., 4/9/2002),  http://www.ca7.uscourts.gov/op3.fwx?submit1=showop&caseno=00-4155.    Gilbert and Jerome Purze sued the Village of Winthrop when they were refused approval of several preliminary plats of a subdivision, alleging that the Village denied them equal protection of the law.  

The Purzes’ property was zoned rural, (R-5), and they petitioned it be re-zoned to residential use,  (R-3).  There was strong opposition from the neighbors, who did not want the rural character of the area to be altered, and the re-zoning request was denied.  The Purze brothers then employed an engineer, who prepared a resubdivision plat in an attempt to comply with R-5 zoning.  The zoning board denied this plat because it failed to meet the minimal width and square footage requirements, the easements were less than the required 20 feet,  and there were water runoff and detention, and traffic,  ingress and egress issues.  The Purzes then submitted another,  revised plat, which was once again questioned because it contained two lots with less than the required square footage, the easements that were not sufficiently wide, and concerns voiced by the Police and Fire Chief relating to access for emergency traffic.  Nonetheless, the zoning board approved this revised plan subject to adding an additional roadway and reconfiguration of the utility easement. The Village Board, however, rejected the plan, but agreed to waive the fee for the Purzes to submit another, further  revised plat for  consideration by the Village Board.  The Purzes decided, however,  to submit a new, revised plat to the zoning board.  This plat also had a number of problems, but the board also approved this revised plat by a divided vote and sent it on the to Village Board for review.  The Village Board noted that the second  revised plat still had several lots that were too small, the maintenance easements were still to inadequate, and the requested new road for emergency access violated the restrictions on “road jogs”.  Rather than submit a third revised plat, the Purzes filed suit alleging that they had been denied equal protection of the law by the Village Board.

The trial court granted summary judgment in favor of the Village based on a finding that the Purzes had failed to present sufficient evidence to establish that similarly situated owners were treated more favorably and that the Village officials were motivated by personal ill-will or  animus toward them. Affirming, the Seventh Circuit noted that “to make out a prima facie case the Purzes must  present evidence that the defendant deliberately treated them differently from others in a similar situation and sought to deprive them of the equal protection of the laws for reasons of a personal nature unrelated to the duties of the defendant’s position.” The Purzes’ comparison with three other developers in the Village to support their position that others were treated more favorably was rejected; the other individuals were not identically situated in all relevant aspects because these developers sought and obtained variances under different circumstances and conditions.

 

5.  RESIDENTIAL REAL PROPERTY DISCLOSURE ACT; MERGER AND ISSUES OF FACT:

In Coughlin v. Gustafson, (1st Dist., 6/21/02), http://www.state.il.us/court/Opinions/AppellateCourt/2002/1stDistrict/June/Html/1991691.htm , the First District once again examines post-closing residential real estate transaction issues in conjunction with the Residential Real Property Disclosure Act, negligence, breach of contract, and a doctrine of merger defense.  Aspects of these issues have been previously raised in Neppl v. Murphy, (1st Dist., 2000), 316 Ill.App.3d 581, Lanterman v. Edwards, (3rd. Dist., 1998) 294 Ill.App.3d 350, and  Woods v. Pence, (1999), 303 Ill.App.3d 573, but they are brought together in a somewhat complex factual situation here, and admirably presented in this decision by Justice Buckley.

The trial court  entered summary judgment in favor of the seller, Gustafson, upon the buyer’s, (Coughlin), complaint alleging (1) breach of real estate sales contract, (2) violation of the Residential Real Property Disclosure Act, (3) negligence in removal of storage tanks, and (4) breach of implied warranty of habitability.  The facts of the case indicate that at the time of  an inspection pursuant to a home inspection rider, the buyer discovered that there were leaking fuel oil tanks in the crawl space beneath the home.  The seller agreed to professionally remove the tanks and clean the contaminated areas.  The contract also required that the seller certify that the roof and foundation were waterproof at the time of closing, and deliver a water and septic test  indicating the water quality was good and the septic function properly.  At the time of closing, the parties agreed that seller would place $1,000 in escrow to ensure repair of the septic system.  Shortly thereafter, buyer received an estimate of $8,000 to $9,000 for this work. At the time of closing, seller did not yet have the roof and foundation certification because the roofer could not come out to the house before closing.  The trial court’s grant of summary judgment was based on a finding that the buyers accepted the escrow deposit and elected to close when they were not obligated to do so and had knowledge of the condition of the property; “On this record it is clear that the contract has merged into the deed exchanged for good and valuable consideration.”

The First District’s opinion reversing begins with the litany of cases holding that where there are executory agreements contained within the contract for sale that are separate and distinct from the provisions relating to the delivery of the deed and nature of title, (i.e., the condition of the heating system, Nepple v. Murphy ,  and Lanterman v. Edwards, and  roof leaking, Woods v. Pence), that provision is collateral and independent to the provisions in the deed and therefore not merged by the closing. In this case, the fact that they agreed to place $1,000 into escrow further  indicated the parties clearly intended to have the agreement to repair or replace the septic tank survive the closing. Turning to the issue of whether the closing served as a bar under the Residential Real Estate Disclosure Act the Court noted (1) “This court’s research, however has not turned up a case which applied the merger doctrine as a bar to a claim under the Disclosure Act”, (and) (2) “Moreover the language of the Disclosure Act itself does not support such a conclusion.  Section 60 of the Disclosure Act provides: ‘No action for violation of this Act may be commenced later than one year for the earlier of the date of possession, date of occupancy, or date of recording an instrument of conveyance…application of the doctrine of merger would operate as a bar certainly inconsistent with the express language of section 60…”  Applying the previous ruling in Woods v. Pence, the Court also found that summary judgment was improper because there were material issues of fact:  “There are questions as to the existence of defects, defendant’s alleged knowledge of the defects, and any good-faith belief that defendant may have had regarding whether the alleged defects had been corrected. Accordingly, we find that summary judgment is not appropriate.”    Finally, on the issue of negligence relating to the removal of the underground storage tanks, the participation in the removal by defendant created a sufficient issue of fact to make summary judgment inappropriate on this count as well.

There is nothing “new” in the law here, but it is good to see a number of previous decisions applied consistently in one set of somewhat complex facts.

6.   SLANDER OF TITLE & ATTORNEY’S  LIEN:

In Chicago Title and Trust Co. v. David Levine, (3rd Dist., June, 2002),

http://www.state.il.us/court/Opinions/AppellateCourt/2002/3rdDistrict/June/Html/3010884.htm , a decision which is fairly limited to some very unusual circumstances nonetheless gives a good overview of the elements of slander of title to real estate.

David Levine, an attorney, filed an attorney’s lien under the Illinois Attorney’s Lien Act, (770 ILCS 5/1), for legal services provided to Thomas Cassidy and Television Cablecasting, Inc, (which was a corporation owned by Cassidy) in a case filed by Susan Fasse in Cobb County, Georgia to dissolve her common law marriage with Cassidy.   Part of the property involved in the Georgia case was farmland located near Delavan, Illinois.  While this case was pending, the parties and their agents were subject to an order of the Georgia  Court not to encumber any property belonging to the parties. A year and a half after that order was entered,  and one week prior to a jury awarding Fasse 100% of the stock of the corporation owning the farm, (Television Cablecasting, Inc.), Levine filed an attorney’s lien against the farm in the Office of the Recorder of Deeds of Tazwell County in the sum of  $42,762.35. Levine also ‘backdated’ a letter by two years   and sent it Fasse with a copy of his attorney’s lien, and filed an action against the corporation for his attorney’s fees in Georgia.   Chicago Title, as the land trustee holding title to the farm, filed a  slander of title action against Levine in Tazwell County, requested declaratory judgment that the lien was invalid, and prayed for an award of its attorney’s fees and punitive damages. 

At trial, Chicago Title’s expert testified that an “attorney who performed a minimum amount of legal research would know that the lien was invalid”.  Levine only testified that he believed the lien was valid because his client, Cassidy, a Illinois Attorney,  had told him it was.

Affirming the jury verdict in favor of Chicago Title awarding $3,929.60 in attorneys fees  and $30,000 in punitive damages, the decision reviews the elements of slander of title: (1) a false and malicious publication, which (2) disparages title to property, resulting in (3) damages due to the publication, made (4) with malice in that the  statements were known to be false,  were made with reckless disregard of the truth or falsity , or despite a high degree of awareness of its probable falsity. Here, Levine admitted he did not independently research the law on attorney’s liens, no notice in writing was served  and no client or party against whom the claim was made was identified in the lien as required by 770 ILCS 5/1.  There was no itemization for the $40,000 of attorney’s fees claimed, and, of course, the recording of the lien violated the court order  not to encumber the property of the parties during the pending proceedings. The lien resulted in additional attorney’s fees and a delay in the closing when a portion of the farmland was to sold while encumbered. This accounted for the $3,929.60 portion of the award.  The Appellate decision held that there was sufficient evidence for the jury to determine that Levine acted with malice and disregard for the truth that the lien was an inappropriate encumbrance.

 

7.  SUMMER READING;  THE SOPRANOS, INDIVIDUAL DIGNITY CLAUSE and STANDING OF ITALIAN AMERICANS TO SUE FOR DEFAMATION:

American Italian Defense Association v. Time Warner Entertainment Company, L.P., (1st Dist., 6/28/02), http://www.state.il.us/court/Opinions/AppellateCourt/2002/1stDistrict/June/Html/1013827.htm ,  has nothing to do with real estate, but is an “interesting summer read” nonetheless, and may assist you some day in the area of standing and an understanding of the Illinois Constitution.  (For those of you who are ‘busy’ and only want to read what is ‘worthwhile’ for your practice, skip ahead…Time Warner wasn’t enjoined from broadcasting “The Sopranos” because it was defamatory to Italian Americans…For the rest of you who want to know how they got there,  read on…)

The AIDA brought suit as a corporation existing to educate the public concerned the history, culture, language and customs of immigrants to the United States coming from Italy by increasing awareness of their contributions to our society and “opposition by lawful means of all forms of negative stereotyping, and defamation of Italian Americans”.  The AIDA invoked the Illinois Constitution Individual Dignity Clause to support its complaint for declaratory judgment against Time Warner:

“To promote individual dignity, communications that portray criminality, depravity or lack of virtue in, or that incite violence, hatred, abuse or hostility toward, a person or group of persons by reason of or by reference to religious, racial, ethnic, national or regional affiliation are condemned.”  (Ill. Const. 1970, Art. I, Section 20)

The AIDA did not seek damages or a restraining order against Time Warner; only declaratory judgment.  In further support of its complaint, the AIDA referenced Section 12 of the same Article of the Illinois Constitution: 

“Right to Remedy and Justice:  Every person shall find a certain remedy in the laws for all injuries and wrongs which he receives to his person, privacy, property or reputation.  He shall obtain justice, by law, freely, completely and promptly.”  (Ill. Const. 1970, Art. I, Section 12).

Time Warner filed a motion to dismiss pursuant to Section 2-615 based on a failure to state a cause of action, alleging that the Individual Dignities Clause does not grant a cause of action, but is merely a statement of philosophy.  The trial court granted Time Warner’s motion,  and sua sponte held that the AIDA did not have an interest separate and distinct from the general public in the issues raised and therefore lacked standing.  On appeal, the First District affirmed.

Turning first to the “standing” issue, the Court notes that a lack of standing is an affirmative defense,  which is waived if not plead.  Here, while Time Warner did not raise the issue in its motion to dismiss, the trial court did raise the issue at hearing  and allowed time for the parties “to address the issue fully at the hearing”.  Since the issue of standing and waiver thereof  “is a limitation on the parties and not the jurisdiction of this court”,  the Court could consider whether the AIDA’s standing  to “vindicate the individual dignity of Italian Americans”  on its own initiative.  Finding that the AIDA sought neither damages nor a restraining order against Time Warner, there was no grant of relief that could redress any injury identified in the complaint, it held AIDA lacked standing to sue.  Equally important, the Court found that the Individual Dignities Clause “is hortatory and does not create a cause of action.  The plain and ordinary meaning of the clause is to condemn such communications, not to make them unlawful.  The legislature is merely expressing its distaste and disapproval of such communication…merely an _expression of philosophy and not a mandate that a certain remedy be provided in any specific form.”   

Ba Da Bing!   So now yous guys git otta here, and…. don’ let me catch yous talkin’ bad or makin’ TV shows ‘bout Injuns, ‘cause dey won’t be so easy to win on in court on, ya see?”

8. DEDICATIONS AND EASEMENTS FOR PUBLIC ROADWAYS; STATUTORY PREREQUISITES AND EXPANSION:

Klose v. Mende, Commissioner of Highways, (3rd Dist., 4/22/02) http://www.state.il.us/court/Opinions/AppellateCourt/2002/3rdDistrict/April/Html/3010098.htm was first decided by an opinion filed on December 7, 2001, then modified upon by the opinion denying rehearing filed on April 11, 2002, and followed by a new modified opinion filed April 18, 2002, which was corrected on May 24, 2002.  this somewhat checked appellate history, only enhances the historical interest the case has by its facts due to the necessity of the Court’s examination of the laws of the 1850’s to determine if there was a proper dedication of land.  In the end, the decision has some very clearly stated law on dedication of roadways and easements by prescription for roadways. 

Klose filed suit against the Meridian Township Highway Commissioner, Frederick E. Mende,  seeking declaratory judgment that they were the owners of two roadways. This action was occasioned by the receipt of a right of way agreement requesting Klose make two 66 foot right-of –ways available to the Highway Department for improvements on the roadway.  Klose refused and the Highway Department then produced evidence in the form of an 1856 ledger enter by the Meridan Township Clerk that the roadways had already been dedicated.  The trial court ruled in favor of the Highway Department based on the ledger entry, found the 1856 road dedication to be valid, and dismissed Klose’s complaint.  On appeal, the Third District reversed.

The law in effect at the time governing statutory dedications of land (1851 Ill. Laws 24, Section 1-5), required a dedication be deposited with the clerk of the township accompanied by a petition requesting permission to build a road, a record of a personal examination of the commissioner, notice of and a date for a public hearing,  or a separate survey, report,  and plat of the land to be affected.  In this case, the only document of record with the Clerk was the notation on the Township Ledger. There was no record of a personal examination, no order, no notice, hearing, survey, petition or plat.   The evidence of the mere ledger entry was not sufficient under the statute then in existence, and the “dedication” was not valid.  The Court also noted that since Klose had exercised possession and dominion over the purported dedicated roadway since 1856, the 40 year limitation on claims to real estate (735 ILCS 5/13-118)  barred any claim by the Township going back almost 150 years.  (The public use exception found in 735 ILCS 5/13-120(6) was also held to be inapplicable since the dedication was never complete and the property therefore never placed in public use.)

Finally, however, the  Third District opinion finds that the Highway Commission did acquire an easement by prescription over the roadway currently in use by use open, notorious, uninterrupted, continuous and exclusive use for more than 20 years.  This did not entitle the Commission to widen or expand the roadway as they wished to a 66 foot wide street, however, or include different uses and purposes (i.e., drainage and curbs) from the historic and current circumstances.

9.   FROM THE TITLE COMPANY’S PERSPECTIVE:

Carrying the “history”  theme of the last keypoint forward, (and while most regular readers are looking ahead to see where Dick Bales’ piece “From the Title Company’s Perspective” is going to fit into this month’s issue), probably brings us to a good spot to note that Dick is “on vacation” this month.  For those of you who Dick well, it will come as no surprise to learn that his idea of a “vacation” is to stay home for a couple of weeks  to complete the editing and proofs (there are 90 illustrations!) of his soon to be published book.  Dick is an acknowledged expert and historian on the Chicago Fire.  His book,  entitled “The Cause of the Great Chicago Fire and the Myth of Mrs. O’Leary’s Cow”, will published by McFarland & Company, Inc.,  and can be ordered on the internet   (www.mcfarlandpubl.com  or www.amazon.com ). The book will be out the first week of October, and there is rumor that Dick will be signing copies on October 8th;  the 131st anniversary  of the 1871 fire.  The book is the product of Dick’s passion for both history and title research.  The foundation for his ultimate conclusion that Mrs. O’Leary’s cow did not start the blaze comes from the land and title records of pre-fire Chicago maintained, of course, by Chicago Title Insurance Company, which he has researched.

10.        PRACTICE TIPS:  “REPRESENTING THE HOME BUYERS IN POST-CAVEAT-EMPTOR ILLINOIS:

John O’Rourke’s article, “Representing the Home Buyers in Post-Caveat-Emptor Illinois” can be found at http://www.isba.org/Member/aug02lj/p421.htm ,  and is quick, seven page read that will update you on the law as it has develop in real estate transactions.  As John states in his preface, “Illinois has moved from the certainty – an unfairness – of caveat emptor to a developed mix of common law and statutory remedies for dissatisfied homebuyers.  Despite their annoyances and pitfalls – several of which are discussed below – these changes offer real estate practitioners greater opportunity to provide value to clients.”  He then retraces the cases that have reduced caveat emptor to a mere shadow of its former self, walks us through the rise of seller disclosure statute and some the cases,  leading to the issues relating to scope of disclosure, warranties,  and repairs that coincidently only needs an appendix with this month’s case,  Kleczek v. Jorgensen, to be completely up-to-date.  If for no other reason, this article is suggested reading online because of the “technology” the ISBA uses in its publication.  There are three “hyperlinks” imbedded in the article.  Two of them are “FYI Sidebars” which, when ‘mouse-clicked’ lead the reader to an online version of  the Residential Real Property Disclosure Report form, the current Residential Real Estate Disclosure Act statute on line,  and a listing of articles on seller’s disclosures from past  ISBA Journal.   Now that is the future of legal publications and continuing education!