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O'brien v. Noble

OPINION FILED MAY 12, 1982.

RAYMOND E. O'BRIEN ET AL., PLAINTIFFS-APPELLANTS,

v.

WILLIAM R. NOBLE ET AL., DEFENDANTS. — (NEIL SCHURTER ET AL., DEFENDANTS-APPELLEES.)



APPEAL from the Circuit Court of Champaign County; the Hon. HAROLD L. JENSEN, Judge, presiding. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:

Rehearing denied June 9, 1982.

Plaintiffs appeal from a judgment of the circuit court of Champaign County, sitting without a jury, in favor of all defendants in a suit against defendants Springer and Crane for negligent misrepresentation and against defendant Schurter for malpractice. We affirm.

The background of the controversy as revealed by the evidence arises out of the purchase by plaintiffs of certain real estate located in Champaign County. Defendant Crane is a real estate broker and defendant Springer is a broker employed by him. Crane placed an advertisement in a Champaign newspaper for certain property listed with him. It was a display advertisement with a picture of the premises and the Crane logotype, the significant language being as follows:

"FIVE ACRES

Exclusive area located South of Fisher — plenty of trees. Telephone and electricity available. Restricted to one house only. For further details and restrictions call [telephone number]."

Plaintiffs called the indicated telephone number and talked with defendant Springer. Later they went to the site to inspect the property. A second conversation took place during which plaintiff Kathleen O'Brien inquired about a number of things, including restrictions. Defendant Springer gave her an oral description of them together with a "restriction sheet" and a copy of a survey; she was also permitted to view a multiple listing sheet containing some additional general information. Afterwards Springer provided some additional information concerning restrictive covenants on the premises such as frontage and square footage requirements for houses and the use of propane tanks. At no time did plaintiffs make any inquiry concerning zoning.

The culmination was the execution of a form contract to purchase the premises signed by the plaintiffs on November 4, 1977, and by the sellers (defendants Noble, who have been dismissed from the case) on the same date. Plaintiffs were not represented by an attorney, although the name of a Champaign attorney appears on the instrument as being their counsel. Defendant Schurter's name appears as attorney for the sellers. The contract contains two provisions pertinent to the issues here which state:

"11. Subject to existing restrictive covenants, easements and zoning regulations, if any."

"13. THIS AGREEMENT WILL BECOME BINDING UPON EXECUTION BY THE SELLER."

A closing date was arranged for November 28, 1977, at a Champaign financial institution which was loaning plaintiffs a portion of the purchase price. Plaintiffs arrived, and, according to some of the testimony, were "distressed" to learn that the financial institution was not providing an attorney for them at the closing. At about the same time defendant Schurter arrived with his clients, the sellers. Some conversation ensued between Schurter and the plaintiffs; the evidence is unclear as to whether plaintiffs asked him to "represent" or to "help" them. After some hesitation, Schurter agreed to go over the closing statement with the plaintiffs and record their documents for them. Plaintiffs were aware that he was representing the sellers. Also present at the closing were defendant Springer and another person from her office, and an officer of the lending institution. All testimony concerning the closing indicated that the subject of zoning was never mentioned. The closing was accomplished; Schurter recorded the plaintiffs' deed for them and was paid a fee of $25 by them.

Subsequently plaintiffs learned that they could not obtain a building permit for a house on the premises because of insufficient frontage under the Champaign County zoning ordinance which became effective in October 1973. This was a developmental standard as distinguished from a permitted use. The property was in conformity insofar as a permitted use was concerned. Upon discovery of the problem, plaintiffs retained an attorney in August 1978; a petition for variance was filed in August 1979 and allowed in October 1979; plaintiffs' home was completed in May 1980.

Plaintiffs filed a multi-count complaint, naming the seller, Noble, as defendants and seeking various forms of relief against them, but as previously indicated, ultimately dismissed the suit as to them. Plaintiffs proceeded in damages against the brokers, Crane and Springer, as defendants, on a theory of negligent misrepresentation in that they failed to inform plaintiffs of the developmental restrictions in the zoning ordinance; similarly they proceeded against Schurter, the attorney, as defendant, on a theory of malpractice in that he failed likewise at the closing to inform them of the zoning matter. Since the theories are different, clarity demands that we consider them separately.

As to the doctrine of negligent misrepresentation, plaintiffs rely primarily on a British case decided by the House of Lords: Hedley Byrne & Co. v. Heller & Partners, Ltd.

A.C. 465 and its Illinois progeny. In that case an advertising agency purchased advertisements for a business and assumed personal responsibility for the cost. The business subsequently became insolvent and the advertising agency sued the business' bank, alleging that the bank had been negligent in that it provided plaintiff's bank with erroneous financial data concerning the business. The House of Lords held that a negligent, though honest, misrepresentation, spoken or written, may give rise to a cause of action for damages for loss caused thereby, apart from any contract or fiduciary relationship, since law will imply a duty of care when a person seeking information from ...


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