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Chapman v. Hosek

OPINION FILED FEBRUARY 11, 1985.

LINDA CHAPMAN, PLAINTIFF-APPELLANT,

v.

ELSIE J. HOSEK ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. Daniel P. Glecier, Judge, presiding.

JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:

The issue raised on this appeal is whether the record demonstrates that there existed material questions of fact which precluded the entry of summary judgment in favor of defendants.

Plaintiff, Linda Chapman, entered into an agreement to purchase a parcel of residential real estate from the sellers, defendants Elsie and Richard Hosek. Defendants Century 21 Oakshire, Ltd., and its agent, Hugh Connolly, were the listing brokers, and defendants Roloff and Associates and its agent, Fred Aten, were the selling brokers. About seven weeks after plaintiff first saw the property and signed the real estate contract, she attempted to rescind on the grounds that defendants had made a material misrepresentation of fact that flood insurance was not required for the property and had concealed from her that during heavy rains the house flooded, as did the area immediately surrounding the house, which rendered it inaccessible. Plaintiff thereafter filed a lawsuit to recover her $7,000 earnest money deposit and incidental expenses. The trial court granted summary judgment in favor of defendants, and plaintiff has appealed. Each of the parties except Roloff and Aten has filed an appellate brief. The record is extensive, and only that portion which is relevant to this appeal will be summarized.

Plaintiff's verified complaint alleged that on March 30, 1982, she entered into an agreement to purchase the parcel of real estate commonly known as 8708 So. 83rd Avenue in Hickory Hills from the Hoseks. On April 28, 1982, she received a letter from the proposed mortgagee informing her that the subject parcel was located in a flood-hazard area and that she would have to buy flood insurance as a prerequisite to obtaining the mortgage. The mortgagee's letter included a map dated July 9, 1976, published by the Department of Housing and Urban Development-Federal Insurance Administration depicting the subject parcel as being in a flood-hazard zone; the map and letter were appended to the complaint.

The complaint further alleged that defendants knew the property was in a flood zone, that flood insurance would be required and that defendants had a duty to disclose these material facts, which they nonetheless concealed in order to induce her to sign the real estate agreement. In addition plaintiff contended that defendants made a material misstatement of fact in the property description listed by Century 21 and Connolly in the multiple service listing of the South-west Suburban Board of Realtors, which listing affirmatively stated that flood insurance was not required. Plaintiff asserted that the property listing thus concealed from her the fact that the property was in a flood-hazard zone and that during heavy rains it flooded, which caused damage to the property and rendered it inaccessible. Finally, plaintiff alleged that had she known the above information she would not have agreed to buy the property and that on May 18, 1982, she sent written notice of rescission of the agreement and a demand for the return of her earnest money deposit.

In response to interrogatories propounded by plaintiff, the Hoseks denied they ever had water in their crawl space or garage; admitted that their back yard flooded, that 83rd Street immediately in front of their house flooded, and that the property belonging to their neighbors to the north and south and across the street experienced flooding; and denied that the intersection of 83rd Avenue and 87th Street ever flooded to the extent that it became impassable. The Hoseks also stated that they first became aware of flooding conditions in the vicinity of their home when they moved to the house in 1972 and that in 1976 or 1977 they learned that a retention basin to control flood water was proposed to be built north of 87th Street within one-half mile of their home. They further asserted that they did not know their home was in a designated flood plain until May 1982 and that sometime in 1982 they attended meetings in Hickory Hills concerning the flooding problems in the area of their house.

Also during discovery, the trial court issued an order directing plaintiff to disclose the identity of all persons she intended to call as witnesses to prove her allegations of flooding and to specify whether they would testify concerning the subject residence or the area within a three-block radius thereof. In response, plaintiff named three witnesses who were to testify concerning flood conditions in the area of the residence and 10 additional witnesses to flooding both in the area and on the subject property. Plaintiff also stated she planned to introduce into evidence seven sets of photographs showing both the subject property and the immediate area in a flooded state.

HOSEKS' MOTION FOR SUMMARY JUDGMENT

The Hoseks subsequently filed a motion for summary judgment in which they asserted that: (1) they had no knowledge of any flooding or damage to the residence during the time they lived there; (2) they were not required to maintain flood insurance and were not aware that a prospective buyer would need it; (3) according to her deposition, plaintiff had no personal knowledge of flooding or damage to the residence; and (4) the fact that the property was located in a flood-zone plain was a matter of public record so that (a) plaintiff could have discovered that information if she had been diligent prior to signing the contract, and (b) they had no legal duty to disclose to plaintiff the fact that the immediate area in which the residence was located was subject to flooding. The motion was supported by the Hoseks' affidavits and a photocopy of what purported to be segments of plaintiff's deposition. We note that in that deposition plaintiff stated that when the house was initially shown to her she did not notice any damage, but she also said that it had been newly wallpapered and carpeted.

Plaintiff's response raised two primary deficiencies in the Hoseks' motion for summary judgment. First the motion did not address or dispose of the allegations in the complaint that defendants failed to disclose to her that flooding caused damage to the surrounding area and rendered the house inaccessible. Second, the motion did not foreclose liability on the part of the Hoseks based upon fraudulent representations or omissions by the other defendants who were the Hoseks' agents in the transaction. The trial court granted the Hoseks' motion for summary judgment.

CENTURY 21 AND CONNOLLY'S MOTION FOR SUMMARY JUDGMENT

Century 21 and Connolly thereafter filed a motion for summary judgment. Their motion was substantially similar to that filed by the Hoseks, with the additional assertions that neither Century 21 nor Connolly knew of any flood damage to the residence or was aware that a prospective buyer would need flood insurance. They also claimed that the representation in their property listing that no flood insurance was required was based upon information given to them by the Hoseks which they had no reason to believe was incorrect. Finally, Century 21 and Connolly claimed that in any event they had no duty to disclose to plaintiff the fact that the property was in an area subject to flooding. The motion was supported by Connolly's affidavit to the effect that all of the representations they made concerning the property were based upon those made to them by the Hoseks.

Plaintiff filed a consolidated response and motion to reconsider the summary judgment granted in favor of the Hoseks. She asserted that the flooding of the property and the surrounding streets was material information which defendants should have disclosed to her; that when Century 21 and Connolly, as agents for the Hoseks, affirmatively asserted that flood insurance was not required, she relied upon that statement and did not make any further inquiries; and that the Hoseks, Century 21 and Connolly are liable to her for failing to disclose the flood information and for making material misrepresentations which affected the desirability of the property. The ...


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