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08/03/87 Frank K. Phelps Et Al., v. Michael J. O'malley

August 3, 1987

FRANK K. PHELPS ET AL., PLAINTIFFS-APPELLEES

v.

MICHAEL J. O'MALLEY, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

511 N.E.2d 974, 159 Ill. App. 3d 214, 110 Ill. Dec. 797 1987.IL.1111

Appeal from the Circuit Court of Du Page County; the Hon. S. Keith Lewis, Judge, presiding.

APPELLATE Judges:

JUSTICE DUNN delivered the opinion of the court. LINDBERG, P.J., and INGLIS, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE DUNN

On June 30, 1979, plaintiffs, Frank K. Phelps and Robert W. Topping, entered into a contract to purchase 10 enumerated lots in Trinity Lakes Unit II, an Oak Brook, Illinois, subdivision, from defendant, Michael J. O'Malley. The contract price was $800,000. Plaintiffs paid $80,000 earnest money to defendant. The deal never closed, though, and defendant subsequently sold the lots to other purchasers, declaring that plaintiffs had forfeited their earnest money.

Plaintiffs brought this action for return of the earnest money plus compensatory damages. After a bench trial, the trial court found that defendant had breached the contract by failing to substantially perform the prerequisites necessary for setting the transaction for closing. The trial court awarded plaintiffs $387,500, representing the $80,000 earnest money and $307,500 as the difference between the contract price and the fair market value of the lots at the time of the breach. The court also awarded $12,000 as prejudgment interest on the earnest money from the time of the breach. Defendant appeals, arguing that he substantially performed the prerequisites necessary for setting the transaction for closing, that the prejudgment interest award was improper, and that plaintiffs' expert witness should not have been allowed to testify because he had not been disclosed prior to trial in violation of Supreme Court Rule 220 (103 Ill. 2d R. 220). We affirm the trial court on the first two issues, but find that plaintiffs' expert should not have been allowed to testify.

The trial court found that defendant breached the contract by failing to substantially perform the prerequisites necessary for setting the transaction for closing. Defendant acknowledges that a determination of whether the provisions of a contract have been substantially performed depends on the particular facts of a given case and that the trial court's findings thereon will not be disturbed unless contrary to the manifest weight of the evidence. (Luczak Brothers, Inc. v. Generes (1983), 116 Ill. App. 3d 286, 299.) For a judgment to be against the manifest weight of the evidence, it must appear that an opposite Conclusion is clearly evident. (J. R. Sinnott Carpentry, Inc. v. Phillips (1982), 110 Ill. App. 3d 632, 636.) Such a Conclusion does not appear clearly evident in this case.

At the time the contract was signed, defendant had not yet developed the Trinity Lakes Unit II subdivision to a point where the village of Oak Brook would issue building permits for the lots in question. At plaintiffs' insistence, therefore, the contract included the following clause:

"The date of closing shall be 45 days after notice is given to Purchaser by Seller that Seller has complied with all requirements of the Village of Oak Brook that are conditions precedent to the issuance of a building permit by the Village."

Subsequent to entering into the contract with plaintiff, defendant, through his corporation, Swissco, Inc., entered into a subdivision improvement agreement with the village of Oak Brook. The agreement contained the following provision regarding the issuance of building permits:

"9. It is agreed that no building permit shall be granted by any Village official for the construction of any structure until required utility facilities have been installed and made ready to service the property; and that roadways providing access to the subject lot or lots have been constructed or are in the course of construction and are suitable for vehicular traffic. It is understood and agreed that building permits may be granted for buildings on specific lots to which utility facilities have been installed and are operative and to which roadway access is suitable for vehicular traffic, notwithstanding the fact that all improvements within the subdivision may not be completed."

On May 7, 1982, defendant sent notice to plaintiffs that the village requirements with respect to issuance of building permits on the lots in question had been met and set a closing date of June 21, 1982. There does not seem to be any question as to whether the required utility facilities had been installed when defendant sent the aforementioned notice. There is conflicting evidence, however, of whether the roadways providing access to the lots were suitable for vehicular traffic on May 7, 1982, or on June 21, 1982. There is also a dispute as to whether defendant was required to submit "as built" drawings to the village prior to issuance of building permits.

Defendant argues that the trial court misconstrued the subdivision agreement by requiring that the roadways servicing the lots be completed, rather than just suitable for vehicular traffic. The record, however, does not support this argument.

Plaintiff Topping testified that upon receipt of defendant's letter, he called the Oak Brook village engineer, Dale Durfey, to confirm that building permits would issue. Durfey advised Topping that permits could not yet be issued, so Topping called defendant to relay Durfey's information. Defendant replied that there were only a few details to clear up and that he would do so.

Topping testified that he contacted Durfey again a few weeks later and again was informed that permits could not yet be issued. Topping advised Phelps of the problem, and Phelps also called Durfey. Durfey then sent a letter to Phelps on July 8, 1982, confirming that the village requirements were not satisfied.

In the meantime, the closing date had passed. Defendant's son testified that he received no indication from plaintiffs that they would not be closing, and that he had waited for plaintiffs at the title insurance company on June 21, 1982, to no avail. The parties dispute the amount of contact after that date. It does seem clear, however, that defendant did not again ...


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