Archive for October 2014

Condo Defect Claims Based On Chicago Municipal Code and Breach of Fiduciary Duty Reinstated

October 27, 2014

The recent decision of Henderson Square Condominium Association v. LAB Townhomes, LLC, 2014 IL App (1st) 130764, arose from suit brought by the condominium association and its board (“Plaintiffs”) against the developer and contractor (“Defendants”). Defendants completed construction of the condominium in 1996.  The unit owners discovered defects in 2007-2008.  Plaintiffs filed suit in 2011, almost 15 years after construction and 4 years after discovering defects.

Plaintiffs asserted causes of action for (i) breach of implied warranty of habitability; (ii) negligence; (iii) fraud; (iv) violation of the Chicago Municipal Code Section 13-72-030; and (v) breach of fiduciary duty.  The trial court dismissed plaintiffs’ claims and found plaintiffs’ causes of action to be time-barred by Illinois’ 10-year statute of repose period for construction-based claims.  735 ILCS 5/13-214.  Plaintiffs appealed.  On appeal, plaintiffs argued: (1) that the trial court erred in finding that counts IV and V of their complaint were time-barred under section 13-214 of the Code of Civil Procedure (735 ILCS 5/13-214 (West 1996)); and (2) that the trial court erred in finding that plaintiffs failed to state causes of action in counts IV and V.

The appellate court reversed and found plaintiffs’ claims under Counts IV and V were not time-barred.  The 10-year repose period for construction-related claims did not apply because Section 735 ILCS 5/13-214(e) was triggered by defendants’ fraudulent concealment.  Section 13-214(e) provides that the repose period does not apply if defendants engage in fraudulent misrepresentations or fraudulently conceals a plaintiff’s claim.  735 ILCS 5/13-214(e).  When fraud is evident, the statute of repose is tolled and the five-year limitations period in 735 ILCS 5/13-205 applies, which does not include a repose provision.  Plaintiffs argued defendants engaged in fraudulent concealment.

In order to demonstrate fraudulent concealment, plaintiffs must show deceptive conduct or the suppression of material facts, not just silence of the defendant.  Plaintiffs argued the packet issued by defendants to market the condominium project included specifications of the insulation to be used in constructing the project and placed prospective purchasers on notice that the project would contain insulation.  In addition, plaintiffs alleged defendants knew that extensive repairs were needed and defendants did not reasonably budget for such repairs.  The appellate court found that it should be left to the trier of fact to determine whether these alleged facts constituted fraudulent concealment.  The appellate court found plaintiffs pleaded adequate facts to demonstrate fraudulent concealment.

Furthermore, plaintiffs’ claims were premised on the City of Chicago Municipal Code.   Sections 13-72-030 and 13-72-100, (“the Ordinance Sections”), provide a real estate buyer with a private cause of action and damage remedy (including attorneys’ fees) where a seller makes misrepresentations in the course marketing real estate; condominiums.  Plaintiffs stated a cause of action under the Ordinance Sections and the appellate court rejected the defendants’ argument that the ordinance claims were duplicative of the plaintiffs’ fraud claims.  The Ordinance Sections gave rise to a private right of action and provided an additional remedy to a common law fraud claim.

Lastly, the appellate court looked to the Illinois Condominium Act in regards to plaintiffs’ breach of fiduciary duty claim.  Under the Act, Section 9.2 provides that a developer has the duty to adequately fund a reserve account for future improvements and repairs.  765 ILCS 605/9(c)(1), (2).  A reasonable reserve amount is a fact-based inquiry.  A reasonable reserve amount is determined by repair and replacement costs and the estimated remaining useful life of the property’s structural, mechanical and energy components.  The appellate court held the question of whether the developer adequately funded the repairs reserve account was not properly decided.  And that plaintiffs stated a valid claim and properly pled that defendants breached fiduciary duties by failing to disclose known latent defects in the condominium.  Defendants had a duty to charge assessments to fund adequate reserves for repairs and replacement of defects.

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.

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Dan Brenner, Kendall Woods Are Once Again Chosen As “Rising Stars”

October 21, 2014

We are proud to announce that two of Laurie & Brennan’s Associates, Dan Brenner and Kendall Woods, have been chosen again as “Rising Stars in Super Lawyers for 2014.  Super Lawyers recognizes the top up-and-coming attorneys, and only 2.5% of lawyers in each state are recognized as “Rising Stars.”

Partners Ty Laurie and Dan Brennan were again also selected to the Illinois Super Lawyers 2014 list for attaining high peer recognition and achievement in construction law.  The Super Lawyers honor is awarded to no more than the top 5% of lawyers in each state.  Attorneys are selected using a rigorous, multiphase process that includes statewide peer nominations, independent research on each candidate, and peer evaluations.

The Super Lawyers publication is recognized by U.S. courts.  The New Jersey Supreme Court Special Master stated that the Super Lawyers selection process is a “comprehensive, good-faith and detailed attempt to produce a list of lawyers that have attained high peer recognition, meet ethical standards, and have demonstrated some degree of achievement in their field.”  We congratulate our lawyers and look forward to continued success!

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.


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