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Bd of Managers v. Amalg. Tr. & Sav. Bank

OPINION FILED JUNE 20, 1986.

BOARD OF MANAGERS OF VILLAGE SQUARE I CONDOMINIUM ASSOCIATION, PLAINTIFF-APPELLANT,

v.

AMALGAMATED TRUST AND SAVINGS BANK, TRUSTEE, ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County; the Hon. John Teschner, Judge, presiding.

JUSTICE STROUSE DELIVERED THE OPINION OF THE COURT:

This action was brought as a complaint for breach of contract and for injunctive relief to enjoin the use of a residential condominium unit for a commercial baby-sitting service in violation of provisions prohibiting such commercial use in both the declaration of covenants and the bylaws of the condominium association. The trial court granted defendants' motion for a directed verdict because plaintiff did not comply with the notice and hearing requirements imposed by section 18.4(1) of the Condominium Property Act.

In August 1983, David Erbstroesser (tenant) and his wife moved into a two bedroom condominium unit at 7303-6 Winthrop Way. This unit was owned by Daniel Dvorkin, as agent/beneficiary under trust No. 87096, and the Amalgamated Trust and Savings Bank, as trustee under the same trust (hereinafter lessors). The condominium complex was governed by the board of managers of the Village Square I Condominium Association (the association).

Testimony revealed that beginning sometime in August 1983, there were 8 to 10 children coming to tenant's unit for day-care service. On August 31, 1983, the association's managing agent advised lessor by mail that "your new tenants * * * are running a daycare center out of your unit." Since this activity violated the condominium regulations, the letter went on to state: "The Association Board will not permit this business to be conducted." No deadlines were given. In a letter dated October 17, 1983, the association's attorney wrote lessor, advising him that his tenants were operating a day-care center in their unit in violation of the declaration of convenience. In this letter the association notified lessor that the "violation * * * shall be cured within 30 days from receipt of this notice or be subject to the provisions of Article 20 relative to the remedies and rights of the Board of Directors."

Nothing in the record shows that the parties further discussed this matter until March 26, 1984, when tenant's attorney complained that other tenants in the apartment complex were offering day-care services in their units, and asked why his client was being singled out. On April 4, counsel for the association responded that they were unaware of other individuals conducting similar activities in the complex. The letter closed: "I would urge you to request that your client's [sic] cease from the current activity so as to bring themselves within the provisions of the Declaration."

On August 31, 1984, the association filed this complaint, alleging a breach of provisions in the condominium declarations and bylaws which prohibit the use of any condominium unit for other than residential purposes. Specifically, the complaint alleged that the tenant in possession was "permitting daycare baby-sitting services to be conducted in the unit." On October 29, 1984, tenant filed a pro se answer wherein he admitted that the "daytime child care service [was] of limited scope, both in number and selection of local children." On October 28, lessors answered stating they had insufficient knowledge whether child care services were being offered by their tenant.

On November 29, 1984, tenant wrote to the association, again admitting the use of the unit for child-care services. In this letter he requested an early hearing before at least three members representing the association on the matter. No hearing was ever held by the association pursuant to tenant's request. On January 14, 1985, tenant, by his counsel, motioned for a deferment of the trial date. This motion included the November 29 letter.

On February 15, 1985, the association sent to lessor and tenant a notice that they were in violation of the association's bylaws and declaration. It allowed 30 days for compliance, with the threat of termination of possession for noncompliance. On February 28, 1985, tenant filed a "Notice of Cessation of Child-Care Activity." The document stated that tenant "beginning 1 February 1985 with full and final termination by 15 March 1985, has ceased and abandoned all activity of `child-day-care' service in his unit (Phase I)."

On March 12, 1985, lessors filed a motion to dismiss the association's complaint on the basis that the association had commenced this lawsuit prior to the expiration of the 30-day notice served on tenant on February 15, 1985, claiming violation of section 309.2 of the Condominium Property Act (Ill. Rev. Stat. 1983, ch. 30, par. 309.2) and section 9-104.1(a) of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 9-104.1(a)). The trial court granted lessors' motion in part by striking the paragraph of the complaint which contained a request for termination of tenant's possession. In that same order, the trial court set the case for trial.

On April 11, 1985, the association filed a petition, supported by affidavit, for attorney fees in the amount of $1,927.50. On that same day, lessors filed motions for summary judgment and for leave to file an affirmative defense of laches. The trial court denied lessors' motion for summary judgment, granted lessors leave to file their affirmative defense, granted the association 14 days to reply to the affirmative defense, and set the case for trial on May 1, 1985.

The case proceeded to trial on May 1, 1985. At the conclusion of the association's case, defendants moved for a directed finding. One of the arguments advanced by defendants was that they were denied their "statutory right to a hearing before the Board of Managers of the Association prior to the institution of a lawsuit against them." The court took defendants' motion under advisement, and requested the parties to submit legal authorities in support of their positions before May 9, 1985.

On May 9, 1985, the court denied defendants' motion for a directed finding and continued the case to May 22, 1985. In announcing its ruling, the court stated: "I am not ruling on whether or not, at this junction whether or not the plaintiff's [sic] must require an in-house hearing prior to filing the suit. I would like some more law on that issue."

On May 22, 1985, defendants made an oral motion for reconsideration on the motion for directed finding claiming section 18.4 of the Condominium Property Act requires a hearing as a prerequisite to filing a suit for injunctive relief that includes a prayer for attorney fees. The association argued that no such requirement was either expressly contained in the statute or intended by the General Assembly. Prior to announcing its ruling, the judge defined the question presented in the following terms: "The question is: Is the imposition of attorney fees a penalty, which mandates, or requires a hearing before the local board?"

That same day, the trial court entered an order granting defendants' motion for directed verdict and stated: "The basis of granting Defendants [sic] motion * * * is that the plaintiff did not comply with the notice requirements contained in Ill. Rev. Stat., ch. 30, paragraph ...


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