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03/04/88 John D. Cotter Et Al., v. Paul Parrish Et Al.

March 4, 1988

JOHN D. COTTER ET AL., PLAINTIFFS-APPELLEES AND CROSS-APPELLANTS

v.

PAUL PARRISH ET AL., DEFENDANTS-APPELLANTS AND CROSS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT

520 N.E.2d 1172, 166 Ill. App. 3d 836, 117 Ill. Dec. 821 1988.IL.303

Appeal from the Circuit Court of Jackson County; the Hon. D. D. Bigler, Judge, presiding.

APPELLATE Judges:

JUSTICE KARNS delivered the opinion of the court. HARRISON, P.J., and WELCH, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE KARNS

Paul and Viola Parrish, defendants, appeal from the judgment of the circuit court of Jackson County rescinding a contract for deed in favor of plaintiffs, John D. Cotter and Steven L. Bainbridge. Plaintiffs cross-appeal the trial court's failure to order full restitution. We affirm both appeals.

Paul Parrish, a building contractor, designed and built an underground house in Carbondale, Illinois. The house was completed in late 1977 or early 1978 whereupon the Parrish family moved in and resided in the dwelling until December 1981. The house, which was completely surrounded by earth on all four sides, consisted of two bedrooms, two full baths, a kitchen, dining room, utility room, office and atrium. A detached two-story garage/barn was connected to the house by means of a 36-foot long tunnel. At the time the dwelling was built, underground houses were uncommon in the area and Mr. Parrish had had no previous experience in constructing such structures.

The Parrishes placed the house up for sale in December of 1980. Plaintiffs first viewed the house in November 1981. After several visits and one meeting with the Parrishes to discuss any problems such as cracks or leaks in the structure, plaintiffs agreed to purchase the dwelling for a sale price of $85,000. Mr. Parrish assured them the house had no problems, cracks or leaks. Plaintiffs paid $17,000 as a down payment and began making monthly installments of $821.03 under the contract for deed.

Plaintiffs moved into the structure in December of 1981. They immediately noticed a V-shaped crack in the east wall of the detached garage/barn. Plaintiffs failed to notice the crack on their prior inspections of the house because a U-Haul-type of utility trailer had been parked in front of it. Mr. Parrish testified that he had no problems with the crack once he had repaired it by digging out behind the wall and filling it all back with rock to prevent water seepage. He further testified that the trailer was some eight inches away from the wall and the plaintiffs could have seen the crack if they looked.

Plaintiffs next discovered the wood stove in the atrium would not draw smoke. Further inspection revealed that the flue pipe was in an improper configuration and was of such material that it could generate toxic gas at certain temperatures. Plaintiffs spent approximately $500 to have this defect corrected.

Within two months plaintiffs learned that the atrium leaked constantly during rains, the exhaust fan above the stove dripped water, and the tunnel from the residence to the detached garage/barn often contained water. When plaintiffs removed the exhaust fan to correct the leak, they found a warning on it stating that it was not suitable for use over cooking implements.

By October of 1982, plaintiffs discovered leaks in the closets of the master and second bedrooms, the northwest corner of the living room and the master bedroom-bathroom. The walls in the closets began exhibiting mold and mildew, and a moldy, musty odor began to permeate the structure. When plaintiffs removed the walls they found rotted studs and "honeycombing" (fissures where concrete failed to set up) of the concrete walls. From one of these fissures, plaintiffs testified a stream of water poured through to such an extent that a 55-gallon garbage can used to catch the water had to be emptied three times a day. Plaintiffs dug up the dirt around the leaking walls and found further evidence of honeycombing. They also discovered protruding snap ties on the exterior walls. Snap ties are metal rods which are passed through freshly poured concrete to hold the concrete forms in place while the concrete sets up and are designed to be broken off and sealed up after the forms are removed. The ties were rusting and deteriorating, allowing water to migrate through the walls. An expert determined that, in addition to those structural problems, only damp-proofing as opposed to waterproofing had been applied to the exterior. In order to correct the problems, the perimeter of the house would need to be excavated down to the footing depth and the walls cleaned, all snap ties broken and patched, all honeycombed areas patched and a waterproofing membrane applied to the surface. In addition, drain tile would need to be replaced, backfilled and compacted.

Plaintiffs mailed a letter of rescission of the contract for deed to the Parrishes in June of 1983 but continued to make monthly payments to December. Mr. Cotter moved out in January 1984 and Mr. Bainbridge left in the spring. The Parrishes repossessed the abandoned house in May. According to Mr. Parrish, the house was filthy and many items were broken or missing. The Parrishes made the necessary repairs and by July of 1985 rented the house for $400 a month. The only problems the tenants experienced were dampness and mold and leaks in the tunnel.

Plaintiffs filed suit alleging breach of warranty of habitability, material misrepresentations concerning the condition of the structure, and fraudulent concealment of defects. The Parrishes filed a counterclaim for damage to the property and for back-due payments under the contract for deed. The trial court found that the Parrishes had breached the implied warranty of habitability but were entitled to a setoff for the rental value of the dwelling which accrued prior to the notice of rescission. The court therefore awarded plaintiffs $30,460.72 ($37,667.72 paid on ...


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