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Dahm, Inc. v. Jarnagin

OPINION FILED MAY 10, 1985.

DAHM, INC., PLAINTIFF-APPELLANT,

v.

JERRY DEAN JARNAGIN ET AL., DEFENDANTS (ANTHONY D. PAINTER, EX'R OF THE ESTATE OF BETTY M. PAINTER, DECEASED, DEFENDANT-APPELLEE).



Appeal from the Circuit Court of Fulton County; the Hon. Charles H. Wilhelm, Judge, presiding.

JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:

On June 15, 1984, the circuit court of Fulton County, on defendants' motion, dismissed plaintiff's complaint for specific performance. Plaintiff appeals.

We reverse and remand.

A motion to dismiss admits all properly pleaded facts. (Sierens v. Clausen (1975), 60 Ill.2d 585, 328 N.E.2d 559; Trautman v. Knights of Columbus (1984), 121 Ill. App.3d 911, 460 N.E.2d 350.) Plaintiff's complaint alleges that on March 21, 1974, plaintiff, Dahm, Inc., contracted to sell real estate to Jerry Jarnagin, Raymond Rumler and Albert Painter on an installment basis. Subsequently, Painter died and Betty Painter, his widow, succeeded to his interest. During 1983, purchasers failed to pay taxes, provide evidence of insurance, and make installment payments.

On February 15, 1984, plaintiff sent a letter to defendants, Jarnagin, Rumler, and Betty Painter, notifying them of plaintiff's intent to file a civil suit declaring a forfeiture if payments were not made current. On March 13, 1984, plaintiff filed a suit asking for specific performance of the contract.

Defendants moved to dismiss the complaint pursuant to section 2-619 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2-619), alleging plaintiff elected to forfeit the contract as shown by the February 15, 1984, letter. Defendant Painter also objected to the complaint as it pertained to her, stating she was not a party to the original contract. In affidavits attached to their motions, defendants stated the defaults were not cured and that they consented to the forfeiture of the contract.

The trial court dismissed the complaint, finding the February 15, 1984, letter evidenced an election of plaintiff's remedy. The court relied upon Perino v. Protect-All-Shelters, Inc. (1970), 128 Ill. App.2d 477, 262 N.E.2d 349.

Plaintiff argues that the February 15 letter was not an unequivocal declaration that the contract was forfeited. Plaintiff characterizes the letter as a threat that something will happen if the default is not cured. Plaintiff also distinguishes the Perino case and argues that since forfeitures are avoided if possible, the court should not find plaintiff elected to forfeit the agreement absent a clear declaration of forfeiture. Only defendant Painter filed a brief in this court. Defendant argues that the letter was not merely a warning, that it unequivocally declared a forfeiture, and that Perino controls the present situation.

It is well settled that a vendor under an installment contract cannot forfeit the contract and sue on the contract for damages. (Herrington v. McCoy (1982), 105 Ill. App.3d 527, 434 N.E.2d 67; Morey v. Huston (1967), 85 Ill. App.2d 195, 228 N.E.2d 544.) The vendor must elect which remedy he wishes to pursue.

A declaration of forfeiture must be unambiguous and convey a firm purpose to insist upon the forfeiture. (Brown v. Jurczak (1947), 397 Ill. 532, 74 N.E.2d 821.) The party declaring the forfeiture should do so in the manner provided in the contract. (Zeta Building Corp. v. Garst (1951), 408 Ill. 519, 97 N.E.2d 331; Bocchetta v. McCourt (1983), 115 Ill. App.3d 297, 450 N.E.2d 907.) Although forfeitures are not favored, courts will enforce forfeiture provisions where the right is clearly shown and injustice will not result. Aden v. Alwardt (1979), 76 Ill. App.3d 54, 394 N.E.2d 716.

Paragraph 7 of the agreement provides that in the event of default vendor may elect to declare the entire balance owed due and payable or may elect to declare a forfeiture. Upon vendor's election to forfeit the contract, purchaser's contract payments are considered as liquidated damages and in full satisfaction of vendor's claims against purchaser. The election may be taken only after seven days' advance written notice to purchaser.

The agreement does not establish a method of electing forfeiture. It does not state what acts constitute proof of the election.

The parties agree that plaintiff had a right to declare a forfeiture of the agreement. The only issue is whether the February 15 letter was an unambiguous declaration that the contract was forfeited. (Brown v. Jurczak (1947), 397 Ill. 532, 74 N.E.2d 821.) The letter states:

"In accordance with the provisions contained in the contract between Dahm, Inc. and you dated March 21, 1974, you are hereby notified that Dahm, Inc. intends to file a civil lawsuit declaring a forfeiture based upon this ...


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