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Bachewicz v. American Nat'l Bk. & Tr. Co.

OPINION FILED JULY 26, 1979.

ALLEN BACHEWICZ ET AL., D/B/A B & B INVESTMENT COMPANY, PLAINTIFFS-APPELLANTS,

v.

AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, TRUSTEE, ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. JOHN F. HECHINGER, Judge, presiding.

MR. JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

Plaintiffs, B&B Investment Company and its individual partners, appeal from an order of the circuit court of Cook County dismissing their complaint for specific performance of a contract to convey real property. A notice of appeal has also been filed from the court's denial of plaintiffs' motion for leave to file an amended complaint.

The issues which we consider on appeal are (1) whether plaintiffs have a right to rely on provisions of defendants' joint venture agreement to show the existence of a valid contract enforceable under the statute of frauds, and (2) whether the trial court erred in denying plaintiffs leave to file an amended complaint.

We affirm the trial court's denial of leave to amend but reverse the trial court's order dismissing the complaint, and we remand the cause for further proceedings.

The following facts are alleged in plaintiffs' complaint and must be accepted as true for purposes of the motion to dismiss. Plaintiffs Allen Bachewicz, Joseph Bachewicz and Lawrence Conjar are engaged in real estate management and development as a partnership named B&B Investment Company (B&B). In 1977, plaintiff B&B became interested in acquiring an apartment building at 5601 North Sheridan Road in Chicago. The beneficial owners of the apartment building are two limited partnerships, defendant The Statesman Limited Partnership (Statesman) and defendant 5601 North Sheridan Associates (Associates). Legal title to the property is held in trust by defendant American National Bank and Trust Company of Chicago.

Statesman and Associates own and manage the subject property under a 1972 agreement designated in the complaint, a "joint venture agreement." Under the agreement, Statesman and Associates each own an undivided 50 percent interest in the property. Paragraph 9 of the agreement provides the following conditions for either the sale of a co-owner's individual interest or the sale of the entire building.

"9. Both parties shall be free to transfer interests in their respective partnerships as provided in their respective partnership agreements, but in the event that either party shall desire to sell its entire partnership interest, the respective party, as the case may be, shall give the other party thirty (30) days' prior written notice of the price, terms and conditions on which it proposes to dispose of its interest and the other party shall have the right by written notice to agree to purchase upon such price, terms and conditions. In the event that said other party declines to purchase as aforesaid, the selling party may thereafter dispose of its interest to a third party upon the terms and conditions offered, or less favorable terms to such third party. In the event the selling party desires to dispose of its interest on more favorable terms to any third party, it shall again give the other party thirty (30) days' prior written notice and the other party shall have the right to purchase as aforesaid. In the event an offer is received for the purchase of the entire apartment building, and the parties cannot agree whether to accept said offer, the party who desires to accept said offer shall so advise the other party in writing. Thereafter, said other party shall have thirty (30) days within which to either consent to the sale as proposed by such third party or may, within said thirty (30) day period, elect in writing to purchase the interest of the party desiring to sell for an amount equal to the proportionate share of the offer which would have been received by the party desiring to sell its interest in the apartment building. Failure to make an election within the thirty (30) day period shall be deemed to be a consent to such proposed sale, and the parties shall thereafter proceed to consummate such sale, and both parties agree to execute all necessary documents to complete such sale."

On or about June 29, 1977, B&B made a written offer to purchase the subject property from Associates and Statesman for the purchase price of $1,839,233.39. On July 6, 1977, Associates sent a letter to B&B stating:

"The undersigned as 50% beneficial owner of the above property herewith accepts your offer to purchase the above property dated June 29, 1977, a copy of which is attached hereto as Exhibit A (the "Offer"), subject to a condition precedent: the acceptance of the Offer by The Statesman, an Illinois Limited Partnership, being the remaining 50% beneficial owner of the above property, which acceptance may be express or implied and within the time therefor allowed, pursuant to paragraph 9 of that certain Agreement between the undersigned and The Statesman, dated in 1972, a copy of which is attached hereto as Exhibit B.

Our acceptance shall be deemed effective coincident with the time of acceptance by the Statesman as aforesaid."

Attached to the letter was a copy of the joint venture agreement executed by Associates and Statesman.

On July 8, 1977, Associates notified Statesman of their acceptance of B&B's offer. Thereafter, within the 30-day period contemplated by paragraph 9 of the joint venture agreement, Statesman neither responded to the notice nor notified Associates of an election under paragraph 9 to purchase Associates' interest in the property. Further, Statesman has since refused to cooperate with Associates in completing the sale to B&B.

On October 19, 1977, plaintiffs filed a complaint seeking specific performance of their alleged contract with defendants. The complaint named Statesman, Associates and the trustee as defendants but, because of Associates' willingness to complete the transaction with B&B, sought a judgment for specific performance only against Statesman. Associates answered the complaint and acknowledged that it had entered into a contract with B&B. Statesman moved to dismiss the complaint, alleging, inter alia, that the contract was unenforceable under the statute of frauds and that provisions of the joint venture agreement, particularly paragraph 9, could not be relied on by plaintiffs. The trial court granted defendant Statesman's motion to dismiss the complaint on February 24, 1978, finding no just cause to delay the enforcement or appeal of that order. On March 14, 1978, plaintiffs filed a notice of appeal from the February 24 order.

Then, on March 27, 1978, plaintiffs asked the trial court for leave to file an amended complaint against Associates, seeking specific performance and damages. The trial court denied plaintiffs leave to file an amended complaint and plaintiffs filed a second notice ...


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