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Lake Bluff Heating v. Harris Tr. & Sav. Bk





Appeal from the Circuit Court of Lake County; the Hon. Lawrence D. Inglis, Judge, presiding.


This action originated as a mechanic's lien foreclosure proceeding brought by Lake Bluff Heating and Air Conditioning Supply, Inc. (Lake Bluff), to recover for work performed by them in March 1981 on certain residential property located in Libertyville, Illinois. At that time, the subject property was owned by Glenview Guaranty Savings & Loan Association (Glenview), which had acquired the property by foreclosure. In May 1981, Glenview sold the property to Harris Trust and Savings Bank (Harris), as trustee of a trust whose beneficiary was Barry M. Dolin. Both Harris and Glenview were defendants in the lien foreclosure action. Harris filed a cross-claim against Glenview in two counts. Count I alleged that Glenview breached certain express warranties in its contract of sale with Harris, and count II sought indemnification from Glenview for any amounts which Harris might be required to pay Lake Bluff in the lien foreclosure action. Harris moved for summary judgment on its indemnification claim and the motion was granted by the trial court. Subsequently, Glenview paid Lake Bluff the amount due to it, and the lien foreclosure proceeding was dismissed against both Glenview and Harris.

The cause proceeded to trial on count I of Harris' cross-claim, and after hearing the evidence and arguments of counsel the trial court found in favor of Glenview. Harris appeals, contending that: (1) the trial court's ruling on the indemnification count of the cross-claim established the law of the case and was inconsistent with its subsequent ruling against Harris; (2) the trial court erroneously found that Glenview did not breach any express warranties; and that (3) Glenview breached an implied warranty of habitability when it refused to complete necessary repairs to the premises.

Albert Dolin, an attorney and the father of Barry Dolin, the trust beneficiary, negotiated on behalf of Harris and Barry Dolin for the purchase of the property in question. Charles Skopp, senior vice-president in charge of lending at Glenview, represented Glenview in the negotiations. In November or December 1980, Dolin first contacted Skopp about purchasing the property for his son. At their initial meeting, Dolin noted the deplorable condition of the house, which had been severely damaged due to freezing of the plumbing and heating systems. Both systems were inoperable, interior piping had burst, and there was extensive water damage throughout. In December 1980, Glenview engaged the services of Brewer's Plumbing and Heating Company (Brewer) to repair the damage caused by the winter freeze, and Brewer commenced work on the property until sometime in March 1981. The repairs were never completed by Brewer. Meanwhile, negotiations between Harris and Glenview continued, with both Dolin and Skopp periodically inspecting the property from January through April 1981 to observe the progress of the repairs being done by Brewer. Both men were therefore aware of the lack of progress in these repairs in March and April. Nevertheless on April 23, 1981, the parties reached an agreement for the purchase of the property at a price of $195,000, subject to Harris' being able to obtain a $110,000 mortgage "with interest not to exceed 12% a year." A rider attached to the contract provided that Glenview "warrants that the damage caused by the freezing of the plumbing and heating facilities in the premises will be properly repaired or replaced prior to closing * * *." The closing date was specified as May 4, 1981.

After signing the contract of sale, Skopp and Dolin visited the building and observed that the work still had not been completed. Dolin then indicated to Skopp the importance of finishing the repairs, and Skopp subsequently contacted another contractor, Werner and Wilke, Inc. (Werner), who estimated it would cost $12,550 to complete the job Brewer did not finish. That estimate was given on May 4, 1981, the original closing date, and was shown to Dolin several days later.

Shortly before the closing, which was finally held on May 16, 1981, the parties agreed that the closing of the sale would be held prior to the completion of the work and repairs referred to in the rider of the contract. In that regard, Dolin drafted a letter to be signed by Glenview, dated May 14, 1981, which stated:

"Harris Trust and Savings Bank Trust No. 41133, its beneficiaries, and Barry M. Dolin


For and in consideration of the sale and purchase of the residential property on St. Mary's Road in Green Oaks, Ill., we represent and warrant that we have engaged and fully paid Brewer Plumbing and Heating Co. in Libertyville, Ill. to replace the heating system, including radiators, in the said house and make such system fully operable, and further, to replace all broken water pipes in the house which leak, including replacement of insulation, repairs to walls and floors and removal of all debris.

The aforesaid work was to have been completed prior to our closing but to facilitate an early closing this representation is made.

We do also agree and hereby assign to you all of our rights, privileges and demands which we may now have or subsequently acquire against the said Brewer Plumbing and Heating Company and we assign to you the full right and authority to proceed against Brewer Plumbing and Heating Company in any matter you may deem appropriate in our place and stead.

Very truly yours,

Glenview Guaranty Savings and Loan Association

By:_________________________________ ...

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