Appeal from the Circuit Court of Carroll County; the Hon. John
W. Rapp, Judge, presiding.
JUSTICE HOPF DELIVERED THE OPINION OF THE COURT:
Defendants, Liph and Patricia Dusenbury, sold a house to Michael and Lori Cummings, plaintiffs. Soon after moving into the home, the Cummings sued for rescission of the contract for the sale. After a bench trial, the circuit court of Carroll County found that, because of a unilateral mistake, the Cummings were entitled to rescission of the real estate contract and damages, less an amount for rent for the period of time they occupied the premises.
On appeal, the Dusenburys contend that the trial court erred in finding that a unilateral mistake existed so as to allow rescission of the contract and a return to the status quo as existed before the contract was made. The Dusenburys argue that a unilateral mistake does not allow rescission. Rather, they urge, the mistake must be mutual. The mistake in the present case concerned whether the home purchased by the Cummings was suitable for year-round living. The trial court found that, by the standards in the industry, it was not, and it held that it would be unconscionable to enforce the contract for sale of the home. The Dusenburys also argue that the Cummings did not exercise reasonable care in determining whether or not the home was a "year-round home." They further urge that they have not been placed in statu quo and that there was a variance between the pleadings and the proof, i.e., the complaint did not plead unilateral mistake.
The Cummings raise a number of issues by way of cross-appeal. They urge, inter alia, that the trial court erred in denying their request for punitive damages and in not determining whether an implied warranty of habitability had been breached.
The house in issue was built by the Dusenburys during the winter of 1973-74. It was a kit home, made of logs, and had a log interior. The Dusenburys lived in it on weekends for several years while selling lots and building other homes at Lake Carroll. In 1977 they lived in the subject house for a year. Some leakage occurred after this, so the windows were removed and set in foam rubber with adhesive. After this, the windows stopped leaking. The roof, Liph Dusenbury testified, only leaked when there was an extremely cold winter with quite a bit of snow. He had no condensation or leakages during the year he lived in the house. He then put the house on the market and leased it to a number of different people, none of whom complained about leaks.
The Cummings first looked at the house in July of 1982. After viewing the property with realtors, they made arrangements to have a realtor contact the sellers and ask specific questions about the home. Realtor Patricia Barrett testified that she called the Dusenburys from her office on July 23, 1982. Barrett testified it was a Saturday, that the Cummings were present in her office and that she probably talked to Mrs. Dusenbury. She asked questions from a list that was introduced into evidence. Barrett asked the questions that had been given to her by the Cummings and wrote down some notes as given by Mrs. Dusenbury. The first question on the list concerned the heating costs and the notation indicated that the electric bill was $120 a month in 1980. Barrett testified that Mrs. Dusenbury said the windows were thermopane, they didn't sweat, and that "it was a year round house." She indicated that the Cummings were concerned about being able to remain warm in the house during the winter.
The Cummings moved into the house in mid-August 1982. Michael Cummings testified that soon after moving in they found that the roof leaked when it rained. They found that the windows leaked and they had a problem with flies coming into the house. He indicated the fly problem got worse in the winter, and in the wintertime the walls would drip from condensation and were wet to the touch. In the fall when it rained, the roof would leak in three or four places, but when winter started the roof leaked all over the place. Photographs of the leaks from the windows and roof were admitted into evidence. Cummings testified that his 19-month-old child was affected by the condensation on the walls because the furniture had to be moved away from the walls to keep it dry. He also stated that one of the realtors who showed him the house may have suggested that insulation and walls be added to the interior surface.
Duane Hanson testified as an expert for the plaintiffs. He had built many log homes in the area and had inspected the subject house. He saw stains on the wall and signs of moisture on the windowsills. He testified that the homes he built had no moisture problems and that the roof on the subject house needed repairs in the amount of $3,000 to $20,000, depending on how much was done. He noted that some of the sills may have had dry rot forming and that recaulking could eliminate the fly problem. Hanson testified that the minimum property standards for HUD or FHA, as they exist today, would not be met by the house in issue. Hanson testified that while the log home industry began upgrading the thickness of woods in the early 1970s, the subject house was still meant to be a second or vacation home and was not really classified as a year-round house, even at the time it was built.
Arnold Prowant, another building contractor, also testified for plaintiffs. He indicated the roof leaked because it expanded and contracted and recommended that a new roof be placed over the old roof. Because the walls of the house were only about 2 1/2 inches thick, he suggested studding the outside walls with 2 x 4s, putting on a layer of visqueen and fiberglass insulation, and then siding the outside.
Defendant Liph Dusenbury testified that he built the house in the winter of 1973 and spring of 1974. He indicated that the water marks on the interior walls got there during construction and that he replaced the single-pane windows with thermopane windows in 1974. He sold the house on contract to an individual who moved in it for a few months and then defaulted and disappeared. He denied having had a phone call with Pat Barrett on July 23, 1982.
The trial court took judicial notice of the fact that July 23, 1982, was a Friday. The Cummings had testified that realtor Barrett had made the phone call to Mrs. Dusenbury on a Saturday. Liph Dusenbury stated that he did not talk to realtor Barrett until the closing and he never indicated verbally or in writing that the house was a year-round home.
Patricia Dusenbury testified that during the winter of 1978, during a heavy snow period, she and Liph lived in the house and there had been no problems, although she did indicate there was a roof leak around the fireplace. Some of the defective thermopane windows were replaced. Mrs. Dusenbury also testified that to the best of her knowledge she never spoke with realtor Barrett on the telephone.
• 1 The first issue raised by the Dusenburys is the contention that the doctrine of unilateral mistake was improperly applied so as to allow rescission of the contract. They contend that only mutual mistake, not unilateral mistake, can justify rescission. They rely on the case of Diedrich v. Northern Illinois Publishing Co. (1976), 39 Ill. App.3d 851, 350 N.E.2d 857. However, Diedrich included the following pertinent language: "If by reason of a mistake of fact by one of the parties to a contract not due to his negligence, the contract is different with respect to the subject matter or terms from what was intended, equity will rescind the contract where the parties can be placed in status quo. (Steinmeyer v. Schroeppel (1907), 226 Ill. 9, 80 N.E. 564.)" (Emphasis ...