Appeal from the Circuit Court of Cook County. Honorable Arthur L. Dunne, Judge Presiding.
Hartman, DiVITO, Scariano
The opinion of the court was delivered by: Hartman
JUSTICE HARTMAN delivered the opinion of the court on rehearing:
Plaintiff, Curtis Casket Company (Curtis), owner and proposed seller of certain real estate, filed a complaint against defendant, D.A. Brown & Company (Brown), putative buyer, for specific performance of their real estate contract. Brown moved to dismiss the complaint, purportedly pursuant to section 2-615 of the Code of Civil Procedure (Ill. Rev. Stat. 1991, ch. 110, par. 2-615 (now 735 ILCS 5/2-615 (West 1992)) (section 2-615)), alleging insufficiency in law. The circuit court granted the motion. On appeal, we affirmed in a Supreme Court Rule 23 order (134 Ill. 2d R. 23), but subsequently granted Curtis' petition for rehearing and vacated the earlier order. We now reverse and remand for reasons which follow.
The issues presented for review on rehearing are whether (1) the circuit court erred in dismissing Curtis' action for specific performance; and (2) Brown's April 8, 1991 letter constituted an unjustified repudiation of the contract which excused timely performance by Curtis.
Curtis' complaint alleged that on March 26, 1991, Curtis and Brown executed a contract for the sale and purchase of the subject real estate located at 2350 West Ogden Avenue in Chicago, for $575,000. The contract, a copy of which was attached to the complaint as an exhibit, set forth the closing date as the later of either (1) April 5, 1991, or (2) 35 days after the delivery of a title insurance commitment disclosing removal or correction of unpermitted exceptions, or title insurance covering such exceptions. Curtis was given 30 days from the date of delivery of a title commitment showing unpermitted exceptions to have the latter removed or provide insurance covering such exceptions. The contract provided that time was of the essence. By a letter dated April 8, 1991, Brown informed Curtis that because of an exception in the title commitment, namely an alley in the rear of the subject property over which a passageway and under which a tunnel is maintained will not be insured; and because the sprinkler system on the subject property is serviced by water from a building not covered by the contract, Brown "has no desire to proceed with the sales contract * * *, declares it void and demands return of its earnest money deposit." Nevertheless, on May 23, 1991, Curtis tendered a deed and related documents to Brown and demanded consummation of the contract. Brown refused.
Curtis further alleged it had performed all the necessaryconditions of the contract; was not in default; did all the acts necessary to close the transaction; "stands ready, willing and able to complete its performance * * * and close the transaction"; and had no adequate remedy at law. Curtis sought court ordered specific performance of the contract.
Brown filed its appearance without a jury demand. Thereafter, Brown moved to dismiss the complaint, allegedly pursuant to section 2-615, averring that on March 18, 1991, it received a title insurance commitment ordered by Curtis which contained three unpermitted title exceptions, and attached a copy of the commitment with its exceptions as an exhibit. By the terms of the contract, performance was contingent upon the removal of the title exceptions by April 17, 1991, and the closing date then became April 22, according to Brown. Curtis failed to tender performance until May 25, 1991, the untimeliness of which assertedly defeated Curtis' claim to specific performance. Brown also alleged that the complaint was substantially insufficient in law, but identified no deficiencies.
Curtis filed a response to the motion to dismiss, with supporting affidavits, claiming that Brown's April 8, 1991 letter constituted an anticipatory breach of contract which "made the date of plaintiff's tender of performance irrelevant." Attached was a copy of the April 8 letter. Curtis asserted that the claims set forth in that letter were insufficient to terminate the contract. More specifically, Curtis averred that, two title commitments were issued, necessitated by the failure of the March 18 commitment to mention a parking lot, which was part of the subject property. A subsequent, corrective commitment was issued on March 25. Therefore, under the contract terms, it had until April 24 to clear unpermitted title exceptions and the closing date became April 29. Curtis then alleged that the title exception concerning the alley did not relate to the subject real estate; the sprinkler system had been installed by a previous owner who then owned both buildings, had been fully functional for over 43 years, passed its last city inspection, and complied with all municipal ordinances; Brown had inspected the property before entering into the contract; and Curtis had made no representation to Brown about the water source for the sprinkler system. Further, Curtis maintained, the title insurance exception relating to the alley was waived by the insurer.
Brown filed a reply, with supporting affidavits, averring that the contract was void because of Curtis' untimely tender of performance. Brown, upon receiving notice of the title insurance exception, was advised by Curtis' attorney that the sprinkler system was serviced by water from an adjoining building not owned by Curtis. Brown securedan estimate of $40,000 as the cost of acquiring an independent water source for the building, which it offered to split equally with Curtis. Curtis refused. Brown asserted that Curtis was not entitled to specific performance under the facts of this case.
On October 2, 1991, the circuit court conducted a hearing on Brown's motion to dismiss the complaint for specific performance. Brown's counsel argued that the remedy of specific performance was not a matter of right, but rather rests within the court's sound discretion. While investigating the title insurance exception, Brown learned that the water source for the sprinkler system was from an adjoining building, not owned by plaintiff, and that no easement was provided. Brown also maintained that Curtis' tardy tender of performance should bar the remedy of specific performance. Curtis, in response, urged that Brown's April 8 letter constituted an anticipatory breach of the contract, which thereby excused timely tender of performance.
The circuit court granted the motion to dismiss the complaint for specific performance, finding that Brown did not waive the contractual provision making time of the essence through its April 8 letter and that the sprinkler system constituted a "very significant defect." The court later granted Curtis leave to file an additional count seeking monetary damages for breach of contract, which apparently is still pending in the circuit court. The court found no just reason to delay enforcement or appeal of the specific performance count. 134 Ill. 2d R. 304(a).
The standard of review on appeal from a motion to dismiss a complaint under section 2-615 is whether the complaint sufficiently states a cause of action; the merits of the case are not at issue. ( McCormick v. Kruk (1991), 220 Ill. App. 3d 449, 451, 581 N.E.2d 73, 163 Ill. Dec. 122.) Only the pleadings are considered in such a motion. ( Shugan v. Colonial View Manor (1982), 107 Ill. App. 3d 458, 460, 437 N.E.2d 731, 63 Ill. Dec. 82.) All well-pleaded facts in the complaint must be taken as true with all inferences from it to be drawn in favor of the nonmovant. ( Meerbrey v. Marshall Field & Co. (1990), 139 Ill. 2d 455, 473, 564 N.E.2d 1222, 151 Ill. Dec. 560.) A motion to dismiss, however, does not admit Conclusions of law or fact ...