APPEAL from the Circuit Court of Winnebago County; the Hon.
JOHN E. SYPE, Judge, presiding.
MR. JUSTICE LINDBERG DELIVERED THE OPINION OF THE COURT:
In an action for negligent misrepresentation of a material fact in a commercial real estate transaction, the Circuit Court of Winnebago County, after a bench trial, found defendants guilty and awarded plaintiffs $5,700 in damages. From this verdict, defendants appeal.
In October of 1977, Jasper and Pamela Rotello (plaintiffs), who were then operating a soft-serve ice cream business in the city of Rockford, contacted Lee Johnson, a realtor, to seek his help in finding a new location for their business. In December, plaintiffs notified Johnson that they were interested in a piece of property at 2111 Harlem Road. Upon investigation, Johnson discovered that the property was owned by R. Neil Scott and Robert Hultgren (defendants). Johnson obtained the owners' permission to show the property to the plaintiffs.
The property was comprised of three tracts. On the northernmost tract was a building which housed a restaurant, then vacant. The second tract was occupied by a leased mini-putt operation, and apparently a small building. The third tract was vacant.
Plaintiffs viewed the property on several occasions between December 20, 1977, and mid-January 1978. An inspection of the grounds outside the buildings, however, was limited due to the heavy snowfall at this time.
Sometime in early January 1978, Johnson, at plaintiffs' request, called one of the owners, Mr. Scott, and inquired whether there was a sewer and water hookup to the building housing the restaurant. Defendant replied "yes." At trial, defendant admitted that by "sewer" he meant public sewer.
On January 21, the parties entered into a real estate contract for the purchase of the entire property for $84,000. Although the contract was made contingent upon obtaining appropriate zoning so as to allow the operation and expansion of plaintiffs' ice cream business, no mention of sewer hookup was made in the contract.
The closing was on March 20. Shortly thereafter, a plumber inspecting the building for purposes of renovation informed the Rotellos that it looked as if the plumbing was not connected to the public sewer, but to a septic system. The records of the Rockford Sanitary District subsequently confirmed this fact.
When told of this discovery, defendants met with the Rotellos and offered to rescind the contract and return the purchase price. The Rotellos refused.
In November, plaintiffs purchased an easement from an adjoining property owner so as to hook up their plumbing to the city sewer. In addition, pipe from the sewer to the building which housed the restaurant was laid. At trial, Mr. Rotello testified that the sewer connection was necessary to accommodate the large quantity of water cycled through the ice cream cooling system, for which the septic tank was inadequate. Although plaintiffs had experimented with an internal recycling system from July to September, it had failed to maintain a sufficiently cold temperature.
On December 7, 1978, plaintiffs filed suit to recover damages incurred as a result of defendants' negligent misrepresentation that the property was connected to the sewer.
Defendants' first contention on appeal is that the trial court's finding that they negligently misrepresented the existence of a city sewer hookup was against the manifest weight of the evidence.
• 1 In arguing this issue, both parties rely on Lyons v. Christ Episcopal Church (1979), 71 Ill. App.3d 257, 389 N.E.2d 623. Plaintiff in that case had purchased a residence owned by the church which had been advertised as having sewers. The church (through its attorney) had made this representation to a realtor who had, in turn, placed the ad in the newspaper. After purchasing the house, plaintiff discovered that there was no ...