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St. Francis Courts> v. Investors Real Estate

OPINION FILED MARCH 1, 1982.

ST. FRANCIS COURTS> CONDOMINIUM ASSOCIATION, PLAINTIFF-APPELLEE,

v.

THE INVESTORS REAL ESTATE ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. ALBERT GREEN, Judge, presiding.

JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:

This is an appeal by defendants from the trial court's order granting plaintiff's motion for partial summary judgment and entering certain mandatory and negative injunctions against defendants. For the reasons stated below, we affirm.

Plaintiff, St. Francis Courts> Condominium Association, is a not-for-profit corporation incorporated under the Illinois General Not For Profit Corporation Act. (Ill. Rev. Stat. 1979, ch. 32, par. 162a et seq.) Defendants, William Dec, doing business as the Investors Real Estate, Edward Niziol and Jean Pierre Gourguechon, were partners in the development of an apartment building into the St. Francis Courts> condominium complex. Title to the building developed by defendants was held by Chicago Title & Trust Company, as trustee under Trust No. 1072963, dated June 1, 1978. Defendants were the beneficiaries of the trust and also were vested with the power of direction.

The Declaration of Condominium Ownership (Declaration) for St. Francis Courts> was recorded in the office of the recorder of deeds of Cook County on August 4, 1978. The plat recorded with the Declaration showed the building was to contain 73 apartments on three floors and 19 garage spaces in the basement. The ground floor area was shown to be part of the common elements, with the exception of one garden unit. Likewise, the basement area was to be part of the common elements, except for the garage spaces. A first amendment to the Declaration was recorded on January 5, 1979. None of the unit boundaries were changed by this amendment, and it is not at issue here.

On October 26, 1979, a second amendment was recorded. This amendment contained a new plat, which was dated April 11, 1979. This plat changed the boundary lines of five units. Basement space originally designated part of the common elements was annexed to these five first-floor apartment units. These units were to be developed as duplex units. Construction on the first unit began in April 1979.

The controversy here involves the effectiveness of the second amendment to the Declaration and the defendant's construction of duplex units in the basement. Plaintiff alleged in its second amended complaint that the second amendment to the Declaration was null and void because it was recorded after 24 units were conveyed to new owners. Thus, it ws alleged, the annexation of common elements in the basement was improper pursuant to the terms of the Declaration and sections 23, 27 and 31 of the Condominium Property Act. (Ill. Rev. Stat. 1979, ch. 30, pars. 323, 327, 331.) The construction work in the basement, then, was an encroachment upon the rights of all the common owners.

Upon the filing of plaintiff's motion for partial summary judgment, defendants moved to strike the motion and the second amended complaint. Defendants asserted that plaintiff did not have standing to bring this action and that the second amendment, with the new survey, was valid. The trial court denied defendants' motion, holding that plaintiff had standing to sue. The trial court then granted plaintiff partial summary judgment, declaring the second amendment null and void, ordering defendants to remove certain construction from the basement and further enjoining them from engaging in any future construction in the basement common area.

Defendants appeal, asserting (1) the trial court improperly determined that plaintiff had standing to bring this action and (2) the second amendment was properly adopted, becoming valid on the date of recording.

Defendants set forth two interrelated arguments in support of their contention that plaintiff lacks standing to bring this action; first, the Condominium Property Act (Act) (Ill. Rev. Stat. 1979, ch. 30, par. 301 et seq.) does not give plaintiff power to bring this action in matters involving the common elements and, second, plaintiff has no remedial interest in the cause of action asserted in its complaint. We disagree with defendants' arguments.

There can be no doubt but that plaintiff, a not-for-profit corporation, may institute a legal action in its own name. Section 18.1 of the Act provides for incorporation of a not-for-profit corporation under the General Not For Profit Corporation Act (Ill. Rev. Stat. 1979, ch. 32, par. 163a et seq.) "for the purpose of facilitating the administration and operation of the property." (Ill. Rev. Stat. 1979, ch. 30, par. 318.1.) The General Not For Profit Corporation Act vests in the board of directors of a not-for-profit corporation power to sue on behalf of the corporation in the corporation's own name. (Ill. Rev. Stat. 1979, ch. 32, pars. 163a4, 163a16.) Similarly, section 18.3 of the Act provides that the unit owners' association shall have the powers specified in the General Not For Profit Corporation Act whether nor not the association is incorporated. Ill. Rev. Stat. 1979, ch. 30, par. 318.3.

• 1 The legislature has thus specifically authorized condominium associations to maintain legal actions on behalf and in the name of the association. (Board of Managers v. Beringer (1981), 94 Ill. App.3d 442, 418 N.E.2d 1099.) Notwithstanding defendants' argument to the contrary, the board of managers is empowered to exercise all the powers and duties of the association, including the operation, care and upkeep of the common elements. Ill. Rev. Stat. 1979, ch. 30, par. 318.4(a).

Defendants' argument based on American Federation of Technical Engineers, Local 144 v. LaJeunesse (1976), 63 Ill.2d 263, 347 N.E.2d 712, are incorrectly applied to this case. LaJeunesse held that unincorporated associations generally do not have legal capacity to sue. At the same time, the supreme court recognized that such a capacity to sue may be authorized by legislative action. (63 Ill.2d 263, 266.) The contention that plaintiff has no remedial interest in this action is premised largely on the theory that the corporation does not have the power to bring an action in matters relating to the common elements. Defendants interpret section 9.1 of the Act (Ill. Rev. Stat. 1979, ch. 30, par. 309.1) as granting such power exclusively to the board of managers. Section 9.1 reads in part:

"The board of managers shall have standing to act in a representative capacity in relation to matters involving the common elements or more than one unit, on behalf of the unit owners, as their interests may appear."

Defendants' reasoning is based on Tassan v. United Development Co. (1980), 88 Ill. App.3d 581, 410 N.E.2d 902. There, a class of owner-plaintiffs sued the developer for a breach of the implied warranty of habitability. The developer cited section 9.1 of the Act and made an argument which is the reverse of that presented before us; that is, only the board of managers had standing to bring an action on behalf of the condominium association. The court noted that for purposes of this action there was no contract between the developer and the association out of which to imply a warranty of habitability for the common elements. However, since it was the ...


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