Appeal from the Circuit Court of Cook County; the Hon. Richard
L. Curry, Judge, presiding.
JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:
This is an appeal by plaintiff, Raymond H. Stender, from the trial court's order granting judgment in favor of defendants and dismissing the complaint. Plaintiff sued defendants for specific performance of an alleged contract to purchase an apartment complex. Legal title to the property was held in trusts by defendant banks, National Boulevard Bank of Chicago and Pullman Bank and Trust Company, as trustees. The beneficiary of those trusts was a partnership of which the two individual defendants, D.F. Antonelli, Jr., and William G. Barr, are the general partners.
On February 9, 1981, plaintiff submitted a signed draft of a proposed contract for sale of property known as the Prentiss Creek Apartments in Downers Grove, Illinois. This proposed contract, consisting of a form contract, rider and joinder provision, was the third draft resulting from extensive telephone conversations and a previous meeting between the parties and their representatives. An addendum was also drafted by the parties.
The proposed contract was signed by plaintiff "as nominee for a trust to be formed." A certified check for $200,000 was also tendered as earnest money. This check was provided by Walton Realty, a partnership of which plaintiff is a member. The proposed contract called for a purchase price of $15,400,000, with a closing date of April 1, 1981. At closing, a $1,400,000 down payment was to be made, with the remaining amount secured by a wrap-around mortgage. This wrap-around mortgage was to bear an interest rate of 7 1/4% per annum, payable monthly for 84 months. Also, three annual payments of $600,000 were to be made on the first three anniversary dates of the mortgage.
At the time of the offer, the property was encumbered by mortgages totaling $7,695,000. An agreed-upon escrowee was to receive the wrap-around mortgage payments and pay on the existing mortgages as they became due. A junior mortgage on the property, securing an indebtedness of $1,850,000, was held by Barclays/American Business Credit (successor to Aetna Business Credit, Inc.) (hereinafter referred to as Barclays). Under the terms of this mortgage, a sale or further encumbrance on the property could not be made without the prior written consent of Barclays.
During the February 9, 1981, meeting, defendant Antonelli signed the joinder, addendum and a letter of direction to the trustees. Defendant Barr signed those documents the next day in Miami, where he was on vacation. His attorney was present at the time and reviewed the documents beforehand.
On February 11, 1981, Paul Barile, a real estate broker involved in the transaction, took the proposed contract and letter of direction to the offices of each defendant bank. Neither bank, as trustee, would sign the contract because of an assignment of beneficial interest for collateral purposes to Barclays.
Attorneys for plaintiff and defendant Antonelli agreed to extend the April 1, 1981, closing date to May 1, 1981, in an attempt to gain Barclays' approval of the proposed contract. A letter from plaintiff addressed to the banks and mailed to Antonelli's attorney on February 17, 1981, indicated plaintiff's willingness to the extension. This letter referred to the proposed contract as an offer and specifically referred to plaintiff's agreement to extend the time for "acceptance of said offer."
The parties continued their negotiating efforts to satisfy all conditions for the sale and meet the extended closing date. Through the remainder of February and March, the primary effort, however, was directed at obtaining Barclays' consent to the transaction. Barclays had imposed numerous conditions to their approval of the deal. At a meeting early in March 1981, defendant Antonelli agreed to Barclays' demand that two additional percentage points be paid on the loan. Another condition set forth by Barclays required an irrevocable letter of credit in the amount of the mortgage or a prohibition against foreclosure on the purchasers without first paying off the Barclays mortgage. Although most of the conditions set forth by Barclays were acceptable to defendants, this last condition was not.
A question also arose as to the status of the $200,000 earnest money. These funds were not earning any interest payable to the purchaser, as required by the proposed contract. The parties' attorneys discussed what steps to take in this regard. Unable to agree on the type of escrow agreement for the funds, Antonelli's attorney returned the certified check to plaintiff's attorney.
Further negotiations to settle all the conditions of the deal failed. Defendants suggested a transfer of the property by articles of agreement so as to eliminate the need for Barclays' consent. This suggestion was rejected by plaintiff and his counsel. A dispute existed over the disposition of a lease to an independent party (Presidential Villas, Inc.) of a portion of the apartment complex. Additionally, the parties never agreed on an engineer's report containing cost estimates for the repair and replacement of roof areas and mechanical or structural systems in the buildings. Finally, the wrap-around mortgage was never drafted and agreed upon by the parties.
As a result, the transaction did not take place on the extended May 1, 1981, closing date. Further talks proved fruitless. In early June 1981, it was learned defendants had entered a contract to sell the Prentiss Creek Apartments to another purchaser.
On June 4, 1981, plaintiff filed his complaint seeking specific performance of the alleged contract with defendants. On February 22, 1982, trial in this matter began. During the trial, plaintiff attempted to introduce evidence pertaining to the negotiations of the parties prior to the February 9, 1981, proposed contract. The trial court sustained defendants' objections to all evidence of events occurring before that date. Plaintiff was also barred from introducing evidence of the subsequent agreement for the sale of the property entered into between defendants and another purchaser. Plaintiff submitted an offer of proof to the court relevant to these matters.
At the close of plaintiff's case in chief, defendants moved for judgment in their favor. The trial court entered judgment for defendants and dismissed the complaint (see Ill. Rev. Stat. 1981, ch. 110, par. 2-1110), finding that plaintiff was not entitled to specific performance. The court further found that plaintiff did not prove the elements needed for a binding contract to exist between the parties. The court specifically found the proposed contract "too ...