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Zimmerman v. Northfield Real Estate

OPINION FILED DECEMBER 31, 1986.

IRVING R. ZIMMERMAN ET AL., PLAINTIFFS-APPELLANTS,

v.

NORTHFIELD REAL ESTATE, INC., ET AL., DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Cook County; the Hon. Alan E. Morrill, Judge, presiding.

JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT:

Plaintiffs, Irving R. and Geraldine C. Zimmerman, purchased a single-family residence and later discovered that the lot size was smaller than they had thought and that the home had numerous defects. Plaintiffs filed this action, alleging fraud, negligent misrepresentation, and certain statutory violations, against defendants, Northfield Real Estate, Inc., and its agent Ellen A. Reed (brokers), and sellers William Dunn and Mary Lou Dunn, who is now known as Mary Lou Steinbach.

Count I of the complaint alleges common law fraud against all defendants, and the trial court dismissed the common law fraud action against the brokers. The court denied the motion to strike and dismiss the common law fraud count against the sellers. Count II alleges negligent misrepresentation by all defendants, and that count was dismissed as to all defendants. Count III alleges violations by all defendants of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1983, ch. 121 1/2, par. 262), and that count was dismissed as to all defendants. Count IV sets forth a private cause of action under the Real Estate Brokers and Salesmen License Act (Ill. Rev. Stat. 1981, ch. 111, par. 5701 et seq.) against the brokers, and that count was also dismissed. Plaintiffs appeal from the dismissal of these counts. Defendant Steinbach cross-appeals from the order denying her motion to dismiss count I, and this court granted her leave to appeal from the interlocutory order. Appellee William Dunn has not filed an appearance or brief in this court.

The complaint alleges that during the period of April to October 1983, plaintiffs visited the sellers' home in Northfield, Illinois, several times. In October 1983, plaintiffs signed a contract with the sellers, agreeing to pay $325,000 for the home. The contract included an exculpatory clause:

"10(j). Purchaser acknowledges for the benefit of Seller and for the benefit of third parties that neither the Seller, broker nor any of their agents have made any representations with respect to any material fact relating to the real estate, its improvements and included personal property unless such representations are in writing and further that Purchaser has made such investigations as Purchaser deems necessary or appropriate to satisfy Purchaser that there has been no deception, fraud, false pretenses, misrepresentations, concealments, suppressions or omission of any material fact by the Seller, the Broker, or any of their agents relating to the real estate, its improvements and included personal property."

The trial court granted defendants' motion to strike and dismiss all counts in the complaint with prejudice except for the common law fraud count against the sellers. The court found that pursuant to Supreme Court Rule 304(a) (87 Ill.2d R. 304(a)) the portion of its order dismissing all counts against the brokers was a final and appealable order. In regard to the sellers, the court found, pursuant to Supreme Court Rule 308(a) (87 Ill.2d 308 (a)), that substantial ground for difference of opinion existed as to certain questions, i.e., whether the facts alleged in count II state a negligence cause of action against the sellers, and whether the facts alleged in count III state a consumer fraud cause of action against the sellers. On August 30, 1985, plaintiffs filed a post-judgment motion which included a request for leave to file a supplemented amended complaint. On January 16, 1986, the trial court denied that motion.

• 1 Initially we address Steinbach's contention that this court is without jurisdiction to consider any questions except those certified by the trial court. Rule 308 provides for interlocutory appeals by permission where substantial ground for difference of opinion exists on a question of law and immediate appeal could materially advance the ultimate termination of the litigation. (87 Ill.2d R. 308.) Review by the appellate court is limited to those questions certified by the trial court. (Getto v. City of Chicago (1981), 92 Ill. App.3d 1045, 416 N.E.2d 1110.) We agree with Steinbach that as to the sellers only the two questions certified by the trial court are before us on appeal.

• 2 The broker defendants argue that plaintiffs have relied on facts not alleged in the original complaint. We note that while the trial court order states that defendants' motion to dismiss was granted pursuant to section 2-615 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2-615), the brokers' motion specified neither section 2-615 nor section 2-619. The trial practice of failing to designate whether a motion to dismiss is brought under section 2-615 or section 2-619 should not be countenanced by trial courts. (Premier Electrical Construction Co. v. La Salle National Bank (1983), 115 Ill. App.3d 638, 450 N.E.2d 1360.) Although materials outside of the complaint may be considered under section 2-619 or section 2-1005, a section 2-615 motion to dismiss for failure to state a cause of action admits all well-pleaded facts and attacks only the complaint's legal sufficiency. (Curtis v. Cook County (1982), 109 Ill. App.3d 400, 440 N.E.2d 942, aff'd in part, rev'd in part on other grounds (1983), 98 Ill.2d 158, 456 N.E.2d 116.) Although the trial court considered the answers to interrogatories, it was not prejudicial where our findings are based only upon a review of the original complaint. See Loeb v. Gray (1985), 131 Ill. App.3d 793, 475 N.E.2d 1342.

• 3 A complaint must be legally sufficient in order to state a cause of action. (Gregor v. Kleiser (1982), 111 Ill. App.3d 333, 443 N.E.2d 1162.) In determining whether a complaint states a cause of action, courts liberally construe the complaint so that controversies are determined on their merits. (Borushek v. Kincaid (1979), 78 Ill. App.3d 295, 397 N.E.2d 172.) A reviewing court should interpret facts alleged in a complaint in a light most favorable to plaintiff, and the complaint should not be dismissed unless the pleading discloses no set of facts, if proved, under which plaintiff could recover. (Davis v. Keystone Printing Service, Inc. (1982), 111 Ill. App.3d 427, 444 N.E.2d 253.) A pleading must show only the possibility of recovery, not an absolute certainty, and it should not be dismissed unless it appears that the pleader in no event would be permitted to recover. Neuman v. City of Chicago (1982), 110 Ill. App.3d 907, 443 N.E.2d 626.

• 4, 5 Plaintiffs contend that the trial court erred in dismissing the common law fraud count against the brokers. Defendant Steinbach cross-appeals from the trial court order denying her motion to dismiss the common law fraud count against the sellers. The requisite elements of a common law fraud cause of action are that a false statement of material fact was intentionally made, that the party to whom the statement was made had a right to rely on it and did so, that the statement was made for the purpose of inducing the other party to act, and that reliance by the person to whom the statement was made led to his injury. (Redarowicz v. Ohlendorf (1982), 92 Ill.2d 171, 441 N.E.2d 324.) Intentional concealment of a material fact is the equivalent of a false statement of material fact. (Obermaier v. Obermaier (1984), 128 Ill. App.3d 602, 470 N.E.2d 1047.) Where a person has a duty to speak, his failure to disclose material information constitutes fraudulent concealment. Salisbury v. Chapman Realty (1984), 124 Ill. App.3d 1057, 465 N.E.2d 127.

• 6 The complaint sufficiently alleges that the broker defendants intentionally concealed, or made statements in regard to, material facts. The complaint alleges that the brokers knew the lot size was less than one acre, knew the bathtubs and plumbing drain tile system did not work properly, knew the basement had four or five leaks, knew the south and east walls were badly deteriorated by moisture, knew the living-room wall contained a substantial hole, and knew the basement had suffered massive flooding of up to four feet of water.

The trial court based its dismissal of the fraud count against the brokers partly on its belief that the complaint did not allege that the brokers "actively engaged in a course of conduct designed to deceive." The complaint alleges, however, that the brokers intentionally, with intent to deceive, issued a multiple listing sheet falsely advertising the lot size as one to three acres, or 43,650 square feet (equal to one acre).

The trial court also based its dismissal of the fraud count on its belief that the "only parties that could be concealing would seem to me to be the sellers." The court cited examples of wallpapering over cracks and leaks and stated it did not believe "that the real estate broker could conceivably be guilty of that." Other well-pleaded facts, however, sufficiently allege the brokers' knowledge and fraudulent conduct. The complaint alleged that defendant Reed lived next door to the Dunn home for at least five years and was previously employed by the developer of the subdivision which had divided and sold much of the land surrounding the Dunn home. From these allegations it is reasonable to infer that Reed knew of the flooding and of the lot size.

• 7 The complaint also sufficiently alleged that the brokers had a duty to speak regarding material information of which they had knowledge. Realtors have a duty to disclose material facts under the Real Estate Brokers and Salesmen License Act. (Ill. Rev. Stat. 1981, ch. 111, par. 5701 et seq.) Real estate brokers and salespersons occupy a position of trust with respect to purchasers with whom they are negotiating and owe a duty to exercise good faith in their dealing with such purchasers even absent the existence of an agency relationship. (Sawyer Realty Group, Inc. v. Jarvis Corp. (1982), 89 Ill.2d 379, 432 N.E.2d 849; Richmond v. Blair (1985), 142 Ill. App.3d 251, 488 N.E.2d 563.) Thus, the brokers' silence may constitute fraudulent concealment of material facts. (Salisbury v. Chapman Realty (1984), 124 Ill. App.3d 1057, 465 N.E.2d 127.) The broker defendants had a duty to ...


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