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12/31/87 Batler, Capitel & Schwartz v. Frank E. Tapanes Et Al.

December 31, 1987

FRED M. ADAMCZYK ET AL., PLAINTIFF-APPELLANT

v.

FRANK E. TAPANES ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

BATLER, CAPITEL & SCHWARTZ, as successor in interest to

517 N.E.2d 1216, 164 Ill. App. 3d 427, 115 Ill. Dec. 530 1987.IL.1991

Appeal from the Circuit Court of Lake County; the Hon. Raymond J. McKoski, Judge, presiding.

APPELLATE Judges:

JUSTICE DUNN delivered the opinion of the court. UNVERZAGT, J., concurs. JUSTICE REINHARD, Dissenting.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE DUNN

The plaintiff, Batler, Capitel and Schwartz, appeals from an order of the circuit court which granted a motion for a directed finding for the defendants, Frank E. Tapanes and Robin J. Tapanes. On appeal, the plaintiff contends that the circuit court erred in finding that (1) the doctrine of merger precluded the plaintiff's recovery of real estate tax credits which were erroneously calculated prior to closing and (2) the plaintiff was not entitled to reimbursement for the overpayment of real estate taxes under the theory of unjust enrichment. We affirm.

The relevant facts which gave rise to this appeal were elicited from a bystander's report made pursuant to Supreme Court Rule 323(c) (107 Ill. 2d R. 323(c)). On February 9, 1986, Fred M. Adamczyk and Anita Jo Adamczyk (Adamczyks) entered into a contract with the defendants for the sale of the Adamczyks' residential home. The plaintiff represented the Adamczyks during the sale of their home and at the closing of that sale. The real estate sales contract between the parties stated, among other things, that taxes were to be based on the most recent ascertainable real estate taxes.

As part of its responsibility for preparing the proper documentation for closing, the plaintiff determined the real estate tax proration credit given to the defendants. The plaintiff based its calculation of the tax credit on the amount of real estate taxes paid in 1984 ($3,555.26) as stated in the "Attorneys' Title Guaranty Fund Commitment to Insure Title" (commitment). Prior to closing, the plaintiff received a title search done by the Law Bulletin Title Services which indicated that the Adamczyks paid $2,355.26 in 1984 real estate taxes. The defendants failed to discern the discrepancy between the tax figures produced by the commitment and the title search.

At the closing of the transaction, the plaintiff tendered a closing statement which erroneously prorated the real estate tax credit in accordance with the commitment's 1984 tax figure. A Lake County tax bill issued to the Adamczyks indicated that they paid $2,355.26 in 1984 real estate taxes; however, the plaintiff did not present this bill at closing. Subsequent to closing, the Adamczyks brought the tax proration error to the plaintiff's attention, and it was determined that the defendants had been overcredited by $1,496.10. Upon being informed of the tax proration error, the defendants refused to reimburse the Adamczyks. The plaintiff then paid $1,496.10 to the Adamczyks in exchange for the right to seek reimbursement from the defendants.

The plaintiff, as a successor in interest to the Adamczyks, filed a small claims complaint seeking reimbursement from the defendants based on the theory of unjust enrichment. The circuit court dismissed the plaintiff's cause of action finding that the doctrine of merger precluded recovery by the plaintiff. Additionally, the circuit court determined that the facts of this case did not support the theory of unjust enrichment. The plaintiff filed a motion to reconsider which the circuit court denied.

This appeal raises the issues (1) whether the contract for the sale of the Adamczyks' home merged into the deed thereby extinguishing the plaintiff's cause of action and (2) whether the plaintiff has stated a cause of action under the theory of unjust enrichment. Our analysis of the applicable law in conjunction with the particular facts of this case leads us to conclude that the circuit court properly dismissed the plaintiff's complaint.

When the terms of a contract for the sale of real estate are fulfilled by the delivery of the deed, there is a merger of the two instruments (Chicago Title & Trust Co. v. Wabash-Randolph Corp. (1943), 384 Ill. 78, 87, 51 N.E.2d 132), and the deed, in the absence of a reservation, supercedes all contract provisions (Mallin v. Good (1981), 93 Ill. App. 3d 843, 845, 417 N.E.2d 858). There is an exception to this rule when the executory contract contains provisions collateral to and independent of the provisions in the subsequent deed. (Hagenbuch v. Chapin (1986), 149 Ill. App. 3d 572, 576, 500 N.E.2d 987.) Nor does the rule apply when the evidence clearly and convincingly proves that a misrepresentation or mutual mistake existed when the deed was delivered. (149 Ill. App. 3d 572, 576, 500 N.E.2d 987.) In determining whether and to what extent a contract has merged into a deed, we look to the intention of the parties and the surrounding circumstances. See Biehl v. Atwood (1986), 151 Ill. App. 3d 763, 766, 502 N.E.2d 1234.

The plaintiff contends that the issue of tax proration is independent of the passage of title to real property and depends solely upon the terms of the contract by and between the grantor and grantee. Initially, we note that the plaintiff has cited no persuasive authority for the proposition that the issue of tax proration generally is considered a collateral matter which is independent from the passage of title, nor have we discovered any case which supports that contention. Additionally, there is no evidence in the record that either party intended that the computation of real estate taxes be a separate and independent agreement which was collateral to the conveyance of the deed. Instead, it is clear that both parties contemplated the extinction of their contractual rights and duties upon the ...


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