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Geist v. Lehmann

MAY 29, 1974.




APPEAL from the Circuit Court of Lake County; the Hon. HARRY D. STROUSE, JR., Judge, presiding.


Herbert Geist, the plaintiff in a suit for rescission of a real-estate contract, appeals from the orders of the trial court which dismissed both his first and second amended complaint and denied his motion for summary judgment on his second amended complaint.

On June 4, 1969, the plaintiff Geist entered into a contract to purchase real estate from the defendant, Robert O. Lehmann. The property consisted of a 20-room Georgian house, a large swimming pool, and a pool house. The house was located upon two lots, all of Lot 7 and the north half of Lot 9. As borne out by the testimony and evidence at trial, the landscape of the property gave the appearance that the front grounds included all of Lot 9. The real estate contract, however, merely gave the address of the property, 500 North Green Bay Road, Lake Forest, Illinois, and only gave the approximate acreage, 3 1/4 acres.

During the week preceding the date set for closing (October 1, 1969), Geist's attorney first received the legal description, the title-commitment letter, and the survey of the property. After the attorney examined the title, Geist apparently first became aware that the property he was about to purchase did not include all of Lot 9. In a letter to Lehmann's attorney, dated September 29, 1969, Geist's attorney stated that there would be no closing on October 1st and requested Lehmann either to correct the "title defects" or to rescind the contract and return the earnest money. Lehmann's attorney replied in a letter dated September 30, 1969, that it would not be possible to obtain the other portion of Lot 9 and that Geist should be prepared to close on October 1.

On October 1, 1969, Lehmann stood ready to close but Geist did not close the transaction. On October 9, 1969, Geist filed suit for rescission of the contract. Geist based his suit for rescission upon a mistake of a material fact (the boundaries of the property) which was caused by the innocent misrepresentations of Lehmann and Gilbert Rayner Associates, the real estate brokers. Lehmann filed suit for specific performance and the two suits were then consolidated.

At trial, Geist testified that he was misled as to the boundaries of the property by a plat of the subdivision which was given to him by a realtor, Roberta Lieberman. Mrs. Lieberman had received the plat from Carmin Olson, a real estate broker employed by Gilbert Rayner Associates. Lehmann had earlier contacted Mrs. Olson in order to list the property with Gilbert Rayner Associates. The plat introduced into evidence by the plaintiff showed the Lehmann property included all of Lot 9. Mrs. Lieberman testified that this plat looked like the plat she gave Geist.

This testimony was contradicted by Mrs. Olson who testified that all the plats given to Mrs. Lieberman showed that the Lehmann property included only the north half of Lot 9. Two plats, one which had been in the possession of Mrs. Lieberman and one plat which Mrs. Lieberman had subsequently returned to Mrs. Olson, were introduced into evidence by the defense. Both plats showed Lehmann's property as including only the north half of Lot 9.

Geist further testified that when Mrs. Lieberman showed him the property, she pointed out the boundaries as including both lots. He also testified that neither Lehmann nor Mrs. Olson pointed out to him what the actual boundaries were, even though they both were aware that the property did not include all of Lot 9. Therefore, Geist testified he was misled by the visual appearance of the property. Mrs. Geist also testified that when she visited the property, one of Lehmann's employees was mowing both halves of Lot 9.

Mrs. Lieberman, however, testified she never pointed out the boundaries to Geist. Mrs. Olson testified that she had told Geist a Mr. Fentress owned half of Lot 9. Furthermore, the real estate broker who had helped Geist prepare his offers, testified that when he attempted to explain the boundaries of the property, Geist said, "Look, I know all about the land. Let's not fool around. Let's get this offer in."

All parties agreed that when the property was first listed on the master listing, the stated acreage of the property was 4 acres and the asking price was $225,000. At the time Geist submitted his final offer the acreage was changed to 3 1/4 acres and the price reduced to $185,000.

Between the time of filing of the complaint for rescission on October 9, 1969, and the commencement of the trial on December 14, 1970, two fires caused extensive damage to the Lehmann house. The first fire occurred in August, 1970, and the second in September, 1970. During the course of the trial, Geist's attorney tried to elicit testimony pertinent to the fire and the fire damage from the defendant in an effort to prove an additional ground for rescission. Lehmann's attorney, however, objected. After a lengthy discussion, the court and the parties agreed that if Geist should be denied rescission on the grounds of misrepresentation and Lehmann should be granted specific performance, then Geist would be permitted to file an amended complaint for rescission based on destruction of the premises.

On February 8, 1971, the trial court found for Lehmann, dismissing Geist's complaint for rescission and entering judgment for specific performance of the contract. Accordingly, on February 8, 1971, plaintiff Geist filed his amendment to the complaint for rescission. In his answer Lehmann admitted material damage to the premises. On April 14, 1972, Geist filed a motion for summary judgment based on the contractual clause permitting the purchaser to treat the contract null and void if there were material damage of the premises prior to closing.

Defendant Lehmann, however, then filed a petition for the vacation of the decree of specific performance and the reaffirmation of the order dismissing Geist's complaint for rescission. Lehmann set forth allegations of plaintiff Geist's bankruptcy subsequent to the decree of specific performance, of defendant's extensive negotiations with the fire insurance companies, of the companies' position to pay proceeds only to the defendant, and of defendant Lehmann's then present desire to elect forfeiture of the earnest money under the contract. Pursuant to this petition, on April 17, 1972, the trial court entered an order vacating the order for specific performance and reaffirming its order dismissing Geist's complaint for rescission. The court denied Geist's motion for summary judgment and, therefore, permitted Lehmann to elect forfeiture of the earnest mony.

The initial issue before this court is whether the trial court properly dismissed plaintiff Geist's first amended complaint for rescission which was based on plaintiff's mistake due to defendant Lehmann's innocent misrepresentations of a material fact. If the trial court properly dismissed the amended complaint, the issue becomes one of what remedies are available to the seller and the purchaser when the purchaser has delayed the closing and ...

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