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Egan v. Steel

OPINION FILED OCTOBER 17, 1985.

ROBERT R. EGAN, PLAINTIFF-APPELLANT,

v.

ROSEMARY C. STEEL ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. Arthur L. Dunne, Judge, presiding. JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

Plaintiff, Robert R. Egan (Egan), appeals from a trial court order granting judgment on the pleadings in favor of defendant, Rosemary C. Steel (Steel), and ordering escrowee-defendant, Draper & Kramer, Inc., to return to Steel earnest money it was holding pursuant to a real estate sales agreement between Egan and Steel. On appeal, Egan contends that the trial court erred by failing to consider certain disputed material issues of fact evidencing that Steel waived her right to void the sales agreement and also that Steel was estopped from voiding the agreement, thus foreclosing judgment on the pleadings in favor of Steel. We reverse and remand for further proceedings.

BACKGROUND

On April 25, 1984, Steel contracted to purchase from Egan 110 shares of capital stock in 1320 North State Street Apartments, Inc., pursuant to a Cooperative Real Estate Agreement (sales agreement). The sale carried with it the privilege of residing in apartment 12-B on the premises owned by the cooperative corporation. Paragraph 14 of the agreement provided that if Egan did not obtain and deliver to Steel by May 25, 1984, written approval by the corporation's board of directors for sale of the stock to Steel and for sublease to Steel's son, either party would have the right at any time thereafter to void the agreement by serving written notice to the other, and Steel would be entitled to the return of her $29,500 earnest money deposit. Paragraph 14 provided in pertinent part:

"If written approval of the sale by the Board of Directors of the 1320 North State Street Corporation is not received on or before thirty (30) days after the date of the seller's acceptance hereof together with written approval of the subleasing of the Premises [to Steel's son] as set forth in Paragraph 20 below, this Contract shall, at the election of either party and upon written notice to the other party, become null and void and all earnest money and accrued interest returned to the purchaser."

Prior to May 23, 1984, Steel and her son appeared before a screening committee of the board of directors as a preliminary step in obtaining board approval for the sale and sublease of the premises. On May 23, 1984, the screening committee gave its approval, and on May 24, 1984, Steel met with the board of directors. On or about May 30, 1984, the board of directors approved the sale of stock to Steel, and Steel's counsel was advised of the decision. On May 31, 1984, written board approval was mailed to Steel, and she received it on June 5, 1984.

In her brief, Steel notes that after May 25, 1984, and until June 5 or 6, 1984, it was her intention to close the purchase of Egan's cooperative apartment. Within that time period documents relating to the closing were delivered from Egan's broker to Steel's counsel and a UCC search was ordered by Egan's counsel. Within that period, Steel's counsel represented to Egan's counsel that a copy of the title insurance commitment would, by agreement, be delivered to Egan's counsel so that final preparations for closing could commence. On June 6, 1984, Steel's counsel delivered to Egan's counsel a letter which purported to void the sales agreement on the ground that the board of directors' sale approval was not effectuated by May 25, 1984, as required under the terms of the sales agreement.

On June 11, 1984, Egan filed a verified complaint for declaratory relief against Steel in the trial court. The complaint sought a judgment declaring Steel to be in default of the sales agreement and granting to Egan the right to the escrowed earnest money deposit. Steel filed her verified answer on July 27, 1984. She moved for judgment on the pleadings on August 23, 1984. On October 4, 1984, judgment on the pleadings was entered in favor of Steel by the trial court, and Draper & Kramer was ordered to return the earnest money deposit to Steel.

OPINION

The only issue before this court is whether the trial court correctly entered judgment on the pleadings in favor of Steel. It is apparent that the trial court concluded that Steel had an absolute right to void the sales agreement pursuant to paragraph 14, since Egan failed to obtain written board of directors' approval of the sale by May 25, 1984.

Egan takes the position that by continuing to participate in the steps required for the closing of the real estate sale and purchase at a time beyond May 25, 1984, Steel effectively waived Egan's obligation to obtain the board of directors' written consent to the sale by the May 25, 1984, date. Additionally, Egan contends Steel is legally estopped from voiding the sale. Further, Egan urges that the trial court erred in allowing Steel's motion for judgment on the pleadings in that material issues of fact relating to the existence of waiver and estoppel would have to be resolved by a trial on the merits. We agree with Egan.

I

A motion for judgment on the pleadings presents the trial court with a question of law as to whether there exists an issue of fact to be tried in a particular case. (Murphy v. S-M Delaware, Inc. (1981), 95 Ill. App.3d 562, 420 N.E.2d 456.) If any material fact is made an issue, judgment on the pleadings may not be entered. (Laue v. Leifheit (1983), 120 Ill. App.3d 937, 458 N.E.2d 622, aff'd (1984), 105 Ill.2d 191, 473 N.E.2d 936.) This requires that the reviewing court examine the pleadings on file in order to determine if there exists an issue of fact, or if the controversy can be resolved solely as a matter of law. Murphy v. S-M Delaware, Inc. (1981), 95 Ill. App.3d 562, 420 N.E.2d 456.

In the case before us, Egan's complaint for declaratory relief states in pertinent part:

"8. Prior to May 23, 1984, Steel and her son appeared before the Screening Committee of the Board, which approved Steel's purchase and the ...


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