Appeal from the Circuit Court of Rock Island County; the Hon.
Gene M. McWhorter, Judge, presiding.
PRESIDING JUSTICE ALLOY DELIVERED THE OPINION OF THE COURT:
Plaintiffs James Denton and Ruth Denton appeal from the judgment of the circuit court of Rock Island County finding in favor of defendant Eslie Hood in their breach of contract and fraud action against Hood. In 1979, the Dentons entered into an installment agreement for warranty deed with Eslie Hood, for the purchase of some real estate in Rock Island County. In November 1982, they filed the instant action against Hood, alleging that he was guilty of fraud and misrepresentation at the time of the agreement. Reliance, for their contract theory, was based upon paragraph 14 of the articles of agreement for warranty deed, which paragraph stated:
"Seller's Warranty. The seller, as owner of the premises, warrants that no notice has been issued and received by the seller or seller's agent from any city, village or other governmental authority of a dwelling code violation, which presently exists in any dwelling structure on the premises covered by this contract."
The underlying basis for both theories was the fact that Hood, prior to the sale, had received a notice that the garage structure on one parcel was in violation of the county zoning, and had not conveyed that information to the buyers. The trial court heard the evidence, some of which was conflicting, and found for the defendant Hood on both theories. The Dentons appeal and contend that the court erred in its construction of paragraph 14 of the contract and the statutory provision upon which it is based. (Ill. Rev. Stat. 1981, ch. 29, par. 8.22.) They also argue that the court erred in concluding that the evidence was insufficient to prove breach of contract or fraud on Hood's part.
The record reveals that the subject real estate has been zoned R-1 residential since before the time Eslie Hood acquired the property. After his acquisition, Hood submitted blueprints for a single-family residential structure to be built on one parcel of the property. A building permit for the construction of a residence on that property was issued to him by appropriate county authorities. However, the structure built on the property, while in accordance with the outside dimensions of the residence blueprints, was never finished as a residence. Instead, Hood utilized the building as a garage, for the storage of equipment and maintenance work on equipment. In January 1979, the office of zoning code enforcement for the county of Rock Island sent Hood a letter about the property. The letter indicated that code enforcement had examined the property and discovered that the building was being used to store automobiles. It advised Hood that the property was zoned R-1 single-family residential, and that the use of the building as a storage facility or body shop was not a permitted use under that zoning. Hood was informed that the storage of vehicles constituted a violation of county zoning resolutions. It does not appear, from the record, that any further action was taken subsequent to the letter, by either Hood or the county. At least until James Denton took possession, the status quo ante prevailed.
Also, in 1979 plaintiff James Denton, having heard the "garage" property might be for sale, contacted defendant Hood about possible sale. Hood was interested in selling both the garage property and another piece of property, across the road from the garage, which had a residence on it. The Dentons and Hood reached an agreement on a purchase price of $60,000 for the two properties. Testimony from the parties about the conversations concerning the two properties was somewhat contradictory. James Denton testified that he told Hood that he wanted to use the garage to work on his cars. When the two walked through the garage, Denton noticed the storage use made of it by Hood. According to Denton, Hood told him he could use the property to work on his cars in the garage. Eslie Hood admitted that he probably did tell James Denton he could work on his cars there, since Hood himself used the garage to work on his trucks and equipment. Hood also testified, however, that he did tell Denton that the property was zoned single-family residential. While admitting that he did not tell Denton that he had to build a house on the property, he maintained that Denton was informed about the zoning classification. Hood also gave Denton the original blueprints for the house and other pertinent documents. Hood also testified that, aside from the letter, no one ever bothered him about his working on the machinery in the garage. It was also established that at no point during their conversations did Denton inquire about zoning, or zoning violations, and Hood did not mention the previous notice of violation received from the county zoning office.
Testimony from zoning authorities indicated that the use of the property as a garage, for working on autos or other equipment, was contrary to the residential zoning of the area, and that such use would only be proper as an accessory use to a residence on the property. Denton testified that he did not have the financing to complete the residence structure so as to comply with zoning and be permitted to work on his cars on the property.
The articles of agreement for warranty deed between James Denton, his mother, Ruth, and Eslie Hood were signed, and James moved into the house across the street and began working on cars on the garage property. In June of 1980, the code enforcement officer sent him a letter indicating that the presence of unlicensed and inoperable vehicles on the property was in violation of the county zoning ordinance respecting the property. The letter to Denton indicated that further inspections would follow to determine if the violations had been cured. At about this time, faced with having to discontinue using the garage for his automobile work, Denton contacted Hood. Through his attorney, Denton demanded a refund from Hood of all moneys paid by the Dentons, being $29,828.61, toward the purchase of the property under the contract for deed. Hood refused to make any refund, and this suit followed.
Other pertinent evidence before the court indicated that the Dentons had made all payments required under their purchase contract, up to the date of demand for refund, although the timeliness of those payments had not been in strict accordance with the provisions of the contract.
The trial court in this bench trial found in favor of the defendant Hood. The court concluded that paragraph 14 of the contract was not intended to cover zoning violations, but rather different types of dwelling code violations. The court also found that the parties had examined the land without representation or inquiry into the legality of a commercial use, and that fraud, either by express statement or by concealment, had not been shown by clear and convincing evidence. From the findings and the judgment of the court, plaintiffs appeal.
• 1 The first issue is whether the court correctly determined that paragraph 14 of the contract was not intended to include, as dwelling code violations, the zoning violation notice received by Hood prior to the sale to the Dentons. We have set forth that provision previously, and, as both parties accept, the provision and its warranty were included so as to comply with section 2 of "An Act relating to installment contracts to sell dwelling structures." (Ill. Rev. Stat. 1981, ch. 29, par. 8.22.) Section 2 states:
"After the effective date of this Act, any installment contract for the sale of a dwelling structure shall be voidable at the election of the buyer unless there is attached to the contract or incorporated therein a certificate of compliance, or in the absence of such a certificate (i) an express written warranty that no notice from any city, village or other governmental authority of a dwelling Code violation which existed in the dwelling structure before the installment contract was executed had been received by the contract seller, his principal or his agent within 10 years of the date of execution of the installment contract, or, (ii) if any such notice of violation had been received, a list of all such notices so received with a detailed statement of all violations referred to in such notice. The requirements of this section cannot be waived by the buyer or seller." (Ill. Rev. Stat. 1981, ch. 29, par. 8.22.)
"Dwelling structure" is defined by the statute as "any private home or residence, or any building or structure to be occupied or resided in by 12 or less family units." ...