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REICHELT v. URBAN INV. & DEV. CO.

January 19, 1984

DIETER REICHELT, PLAINTIFF,
v.
URBAN INVESTMENT AND DEVELOPMENT COMPANY, A DELAWARE CORPORATION, UNITED DEVELOPMENT COMPANY, AN ILLINOIS CORPORATION; CHICAGO TITLE AND TRUST COMPANY, AS TRUSTEE UNDER TRUST DATED APRIL 2, 1967 AND KNOWN AS TRUST NO. 51875; AND BERT THOMAS D/B/A HOME INSPECTION CONSULTANTS, DEFENDANTS.



The opinion of the court was delivered by: Bua, District Judge.

MEMORANDUM ORDER

Three of the four defendants in this case — Urban Investment and Development Company, United Development Company, and Chicago Title and Trust Company — have moved this Court for an order dismissing Counts I and II of the plaintiff's First Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons stated below, defendants' motion to dismiss Count I is denied and defendants' motion to dismiss Count II is granted.

I. FACTS

In considering a motion to dismiss under Rule 12(b)(6), a complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to the relief requested. Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 1081, 31 L.Ed.2d 263 (1972). The following facts are alleged in the First Amended Complaint. For purposes of this motion, the Court assumes they are true. City of Milwaukee v. Saxbe, 546 F.2d 693, 704 (7th Cir. 1976).

In 1969, defendants were engaged in the business of constructing and selling residential homes in DuPage County, Illinois. In February of 1969, defendants finished construction of a residence located in Oak Brook, Illinois (hereinafter "the house"), and on February 5, 1969, sold the house to James and Ruth Heinis. On March 14, 1980, plaintiff Dieter Reichelt purchased the house from the Heinises. On December 15, 1982, Reichelt discovered large cracks in the floor and walls of the basement, along with movement of the west wall and excessive settlement of the interior floors and exterior patio.

Reichelt charges that these structural defects, not discovered by Reichelt until 1982, were caused by defendants' failure to properly construct the house. Specifically, Dieter charges that defendants, in violation of the National Housing Code, constructed the house on soil which could not reasonably be expected to support adequately the weight of the house. Furthermore, in an attempt to avoid the 12-year statute of repose imposed by Ill.Rev.Stat., ch. 110, § 13-214(b), Reichelt alleges that defendants intentionally and fraudulently concealed the defects in the house. In support of the fraudulent concealment charge, Reichelt alleges that defendants, while constructing the house, knew the house had been built on highly compressible fill material and that defendants covered the inadequate soil base with three to six inches of clay with the intent of concealing that defect. Furthermore, Reichelt charges that defendants fraudulently concealed the defects in the house by filling the cracks that had developed in the basement walls with hydraulic cement and by covering the walls with fiberglass mat and paint.*fn1

Reichelt predicates defendants' liability upon two theories. Count I charges that defendants' conduct constitutes a breach of the implied warranty of habitability as articulated by the Illinois Supreme Court in Redarowicz v. Ohlendorf, 92 Ill.2d 171, 65 Ill.Dec. 411, 441 N.E.2d 324 (1982). Count II charges that defendants' conduct constitutes an unfair and deceptive trade practice in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill. Rev.Stat. ch. 121 1/2, § 261 et seq.

In support of their motion to dismiss, defendants argue that both claims, filed more than 14 years after construction of the house, are barred by the 12-year statute of repose provided by Ill.Rev.Stat., ch. 110, § 13-214(b). In the alternative, defendants argue that Reichelt has failed to state a cause of action under either the implied warranty of habitability theory or the Illinois Consumer Fraud and Deceptive Business Practices Act. In reply, Reichelt argues that the 12-year statute of repose should be tolled due to defendants' fraudulent concealment of the cause of action and that the First Amended Complaint states causes of action under both the implied warranty of habitability theory and the Illinois Consumer Fraud and Deceptive Business Practices Act.

II. DISCUSSION

A. Statute of Repose

Section 13-214(b) of the Illinois Code of Civil Procedure provides:

  No action based upon tort, contract or otherwise may
  be brought against any person for an act or omission
  of such person in the design, planning, supervision,
  observation or management of construction, or
  construction of an improvement to real property after
  12 years have elapsed from the time of such act or
  omission. However, any person who discovers such act
  or omission prior to expiration of 12 years from the
  time of such act or omission shall in no event have
  less than 2 years to bring an action as provided in
  subsection (a).

Without more, Reichelt's complaint would fail since it was filed more than 12 years after the house was built.

Reichelt, however, argues that the 12-year statute of repose is inapplicable for two reasons. First, that under the Illinois "discovery rule," Reichelt's cause of action did not accrue until December 15, 1982, the date he discovered the structural defects in the house. Second, that this Court should toll the 12-year statute ...


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