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09/22/94 W.E. ERICKSON CONSTRUCTION v. CHICAGO

September 22, 1994

W.E. ERICKSON CONSTRUCTION, INC., ELMHURST NATIONAL BANK, AS TRUSTEE UNDER TRUST #4663, AND WILBERT E. ERICKSON, PLAINTIFFS-INTERVENORS-APPELLANTS,
v.
CHICAGO TITLE INSURANCE COMPANY, A MISSOURI CORPORATION, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. Honorable Richard L. Curry, Judge Presiding.

Petition for Leave to Appeal Denied February 1, 1995.

Cahill, Hoffman, Johnson

The opinion of the court was delivered by: Cahill

JUSTICE CAHILL delivered the opinion of the court:

Plaintiffs W.E. Erickson Construction, INC., Elmhurst National Bank, and Wilbert E. Erickson, (hereafter, Erickson) appeal a summary judgment for defendant Chicago Title Insurance Company (Chicago Title) on Erickson's complaint for breach of contract and negligent misrepresentation. Erickson also appeals the denial of a motion for leave to amend the complaint to include a count for fraudulent misrepresentation. We affirm.

Erickson contracted with Congress-Kenilworth Corporation (C-K) in 1981 to build a water slide as part of an amusement park in Crestwood, Illinois. Earlier that year, C-K obtained whatever interest it had in the property when it solicited and obtained a quitclaim deed from a former owner. C-K's title to the property and that of the party who quitclaimed it is not an issue in this appeal.

The contract between Erickson and C-K provided for monthly progress payments from C-K. Erickson applied for a payment of $246,958 on June 16, 1981. C-K was unable to make the payment. Instead, it passed a corporate resolution on June 20, 1981, which authorized transfer of its interest in the property to Erickson as security for loans obtained by Erickson to complete construction. C-K then executed a warranty deed to Betty J. Eide, a nominee for Erickson. Eide in turn executed a quitclaim deed to Elmhurst National Bank as trustee for Erickson, the beneficiary of the trust.

Two days later, on June 22, 1981, Erickson applied for title insurance. The same day Chicago Title issued a title commitment which indicated that Elmhurst National Bank land trust held title to the property. The commitment provided $5,500 of coverage.

Erickson completed work on the project on July 3, 1981, and the water slide opened the next day. In August 1981, C-K received a letter from the Army Corps of Engineers stating that the federal government held title to the property and that C-K was unlawfully encroaching upon it. C-K then executed a lease with the Army Corps which allowed C-K to continue to operate the water slide.

C-K then sued Chicago Title. Erickson intervened, claiming damages from C-K and Chicago Title in excess of $450,000. C-K settled its claims with Chicago Title and Erickson and is not a party to this appeal. Related cases are reported at W.E. Erickson Construction, Inc. v. Congress-Kenilworth Corp. (1986), 115 Ill. 2d 119, 503 N.E.2d 233, 104 Ill. Dec. 676, and W.E. Erickson Construction, Inc. v. Congress-Kenilworth Corp. (1985), 132 Ill. App. 3d 260, 477 N.E.2d 513, 87 Ill. Dec. 536.

Erickson's complaint against Chicago Title contained two counts: negligent title search and breach of title commitment. Erickson later substituted a negligent misrepresentation count for the negligent title search count and added a count for breach of implied covenant. Erickson was also allowed to add a third-party beneficiary claim.

In February 1984, Chicago Title moved for summary judgment on the negligent misrepresentation and implied covenant counts. It also moved for partial summary judgment for any amount in excess of $5,500 on the count for breach of title commitment. The court granted summary judgment on the negligent misrepresentation count and the breach of implied covenant count. The court also granted partial summary judgment on the breach of contract action, limiting possible recovery to $5,500. In November 1986, the court granted Chicago Title's motion to strike and dismiss Erickson's third-party beneficiary claim. So, at the end of 1986, the only count remaining against Chicago Title in Erickson's complaint was breach of contract with damages limited to $5,500.

Trial began four years later, in October 1990. At the request of the parties, the court recessed the trial for sixty days while they negotiated a settlement, but no agreement was reached.

No more pleadings were filed until March 1992, when Erickson moved to add a count for fraudulent misrepresentation. The court denied the motion. The parties then filed cross-motions for summary judgment on the remaining breach of contract claim, and Erickson moved to vacate the partial summary judgment limiting ...


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