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Cadral Corp. v. Solomon

OPINION FILED SEPTEMBER 3, 1986.

CADRAL CORPORATION, PLAINTIFF-APPELLANT,

v.

SOLOMON, CORDWELL, BUENZ & ASSOCIATES, INC., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. Brian L. Crowe, Judge, presiding.

PRESIDING JUSTICE RIZZI DELIVERED THE OPINION OF THE COURT:

Plaintiff, Cadral Corporation, a condominium developer, brought a breach of contract action against defendant, Solomon, Cordwell, Buenz & Associates, its architect. Plaintiff sought to recover damages which resulted when defendant plotted plaintiff's high-rise condominium in a manner which violated a building-line restriction. The restriction had been created by a plat of resubdivision prior to the advent of the Chicago zoning ordinance. Following a trial on the merits, the jury returned a verdict in favor of defendant. On appeal plaintiff argues that the trial court erred (1) in denying plaintiff's motion for judgment notwithstanding the verdict, (2) in denying plaintiff's motion for a directed verdict on the issue of liability, and (3) in denying plaintiff's conditional motion for a new trial. We affirm.

The building involved here is located at 1555 North Astor Street, Chicago. The premises are part of a plat of resubdivision which was recorded with the Cook County recorder on November 26, 1904. The plat of resubdivision created a building line across the property 10 feet from the western property line, which runs along Astor Street. The effect of the restriction was that there could be no construction beyond the 10-foot line.

In January 1972, plaintiff, the owner and developer of the property, met with defendant, an architectural firm. The parties orally agreed that defendant would provide the architectural services necessary for the highrise condominium which plaintiff wanted to develop on its property. The parties entered into a written agreement on May 2, 1972. The contract was furnished by defendant. It is titled "Standard Form of Agreement Between Owner and Architect." The contract provides:

"2.1 The Owner shall provide full information regarding his requirements for the project.

2.3 The Owner shall furnish a certified land survey of the site giving, as applicable, * * * restrictions, easements, encroachments, zoning, deed restrictions, boundaries and contours of the site * * *.

2.7 The services, information, surveys and reports required by Paragraphs 2.3 through 2.6 inclusive shall be furnished at the Owner's expense, and the Architect shall be entitled to rely upon the accuracy and completeness thereof.

2.8 If the Owner observes or otherwise becomes aware of any fault or defect in the Project or non-conformance with the contract documents, he shall give prompt written notice thereof to the Architect."

Plaintiff acted as its own general contractor and developer through its agent, Charles G. Matthies, Inc. On May 3, 1972, defendant sent Charles G. Matthies a letter regarding various matters along with certain survey requirements. The letter stated, "We require a survey of the property to contain the following requirements as per the attached form." On May 16, 1972, at the request of Matthies, defendant sent its form survey requirements to Robert E. Biedermann of Gremley & Biedermann, so that Biedermann could perform the survey. The term "restrictions" does not appear on defendant's list of requirements.

On July 24, 1972, defendant received from Gremley & Biedermann a certified plat of survey. On the survey was a dashed line running the length of the property with the designation "10 ft. building line." Existing buildings were shown, and the western perimeters of these buildings appeared very close to, but did not exactly coincide with, the 10-foot building line. Defendant used the survey in preparing its plot plan for the proposed highrise, and the survey appears on the left side of defendant's plot plan. The plot plan shows that defendant used the concept of a reverse corner lot in siting the building. The advantage to using this concept was that the building could be pulled as far westward as possible so that the views from the building and the views from the neighboring building to the east would not be blocked. The plot plan shows that the western wall of the building was sited 6 feet 7 inches from the property line, which was in accordance with the zoning requirements for the area. Between November 1972 and April 1973, excavation of the premises was completed, and the caissons and some of the foundation walls were installed. In compliance with defendant's plot plan, the western foundation wall was set 6 feet 7 inches from the western property line.

In late April 1973, American National Bank, which had granted plaintiff a construction loan in February, conditional upon plaintiff submitting satisfactory evidence that the property and its use were in conformance with all applicable laws, ordinances and regulations, requested a foundation (spotted) survey. When plaintiff's agent, Helen Glennon, received the foundation survey on May 2, 1973, she realized that there was a problem because the western wall of the building extended beyond the 10-foot building line. Glennon contacted plaintiff's president, Thomas Maley, and advised him of the problem. A meeting between plaintiff and defendant was arranged for the next day.

At the May 3 meeting, John Buenz, who had primary responsibility for drawing and designing the building, "guesstimated" that the cost of moving the building to conform to the 10-foot building line would be $500,000 to $1,000,000. The parties agreed that plaintiff would attempt to get title insurance to cover the problem. To this end, defendant obtained evidence of other building-line encroachments in the area, as well as an opinion letter from an attorney that these other encroachments rendered the building-line restriction unenforceable. Plaintiff submitted these documents to three title insurance companies. All three declined to issue coverage because the other encroachments were insignificant, and they did not wish to face the risk of any legal action that might be instituted by other owners of the resubdivision property.

Plaintiff and defendant next attempted to get consents from the other owners of property in the resubdivision. By mid-July, it was clear that these efforts would be unavailing. Meanwhile, construction of the building came to a halt on May 11, 1973.

Sometime in mid-July, Buenz advised plaintiff that transfer beams could be used to move the western wall of the building back 3 1/2 feet to conform to the building line, but that this process would reduce the width of the building by that amount. This solution was unacceptable because the units would then be too small to be readily saleable.

In early August, Thomas Waldron, plaintiff's treasurer, saw an article in a newspaper about a new, luxurious condominium building in the area which offered larger units. Shortly thereafter, Maley sent Buenz a copy of the article and asked Buenz whether he could redesign the units in the building in a similar manner. Buenz was amenable to this suggestion. Whereas the originally designed building was to be a "deluxe" building containing 176 units, the redesigned building is a "luxury" condominium, which has an additional floor and only 113 units. The units are larger in the redesigned building and have more bedrooms and bathrooms. The redesigned units were meant to appeal to a different market from the one to which the original units were meant to appeal. The redesigned building has more saleable area than did the original building, due to the extra floor, elimination of balconies and less square footage in the public corridors.

A few days after Buenz was notified about the new concept in which plaintiff was interested for its building, Maley received a letter from The Engineers Collaborative, which Maley had contacted, regarding possible solutions to the building-line problem. This letter was never shown to defendant.

During October and November 1973, the structural-revision work necessary to remedy the building-line violation was completed. Construction of the building resumed in early December.

Although plaintiff had anticipated a profit from the sale of the units in the building of at least $1,800,000, plaintiffs experienced losses totaling between $1,000,000 and $1,500,000.

• 1 Plaintiff first argues that the trial court erred in denying its motion for judgment notwithstanding the verdict. In Pedrick v. Peoria & Eastern R.R. Co. (1967), 37 Ill.2d 494, 229 N.E.2d 504, the supreme court set forth the standard by which such motions are to be decided. The court stated:

"In our judgment verdicts ought to be directed and judgments n.o.v. entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand." (37 Ill.2d 494, 510, 229 N.E.2d 504, 513-14.)

According to plaintiff, even when the evidence relevant to the four critical issues on which the jury was instructed is viewed in the light most favorable to defendant, the evidence still so overwhelmingly favors plaintiff that no contrary verdict could stand. The four issues are: (1) whether plaintiff performed the conditions required of it under its contract with defendant pertaining to plaintiff's obligation to furnish the plat of survey, or alternatively, whether defendant undertook or waived compliance with the survey provisions; (2) whether defendant breached its duty to possess and apply the knowledge and use the skill and care that is ordinarily used by reasonably well-qualified architects in the locality in which they practice; (3) whether plaintiff suffered economic damages and (4) whether plaintiff's economic damages directly and naturally resulted from defendant's breach of the contract. Since we do not know the basis for the jury's decision, we shall discuss the evidence relating to each of these issues.

In regard to plaintiff's performance of its contractual obligation to furnish a plat of survey, plaintiff contends that the evidence established as a matter of law that the responsibilities required of it were performed. Plaintiff states that "[t]he relevant provisions of the May 2, 1972 Contract between defendant and plaintiff unambiguously required that notice of a site restriction need be given to defendant only by means of a certified land survey furnished at plaintiff's expense which duly showed such restriction." According to plaintiff, it is undisputed that defendant undertook the responsibility for providing the surveyor with its survey requirements, that the surveyor furnished defendant with a certified land survey on July 24, 1972, and that plaintiff bore the expense of the survey. Since defendant failed to mention "restrictions" in its list of survey requirements, plaintiff argues, defendant is barred from claiming that plaintiff did not ...


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