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April 6, 1995


Appeal from the Circuit Court for the 13th Judicial Circuit LaSalle County, Illinois. No. 92 L 206. Honorable Robert L. Carter Judge, Presiding.

Rehearing Denied May 16, 1995. Released for Publication May 16, 1995.

Present - Honorable Allan L. Stouder, Presiding Justice, Honorable Peg Breslin, Justice, Honorable Michael P. Mccuskey, Justice. Stouder, P.j., and McCUSKEY, J., concur.

The opinion of the court was delivered by: Breslin

JUSTICE BRESLIN delivered the opinion of the court:

The plaintiff, Louis Paukovitz (Paukovitz), filed suit against the defendant, Imperial Homes (Imperial), claiming breach of implied warranty of habitability, breach of third-party beneficiary contract, and negligent misrepresentation. The trial court dismissed the plaintiff's claims for failure to state a cause of action. We affirm the trial court's decision on the counts for implied warranty of habitability and negligent misrepresentation, but reverse and remand on the count based on breach of a third-party beneficiary contract.

When Paukovitz decided to build a home on a parcel of land he owned, he contacted Vignali Builders (Vignali). The parcel upon which Paukovitz wanted to build this home was situated on a hillside and Paukovitz wanted to build the home into the hillside so that the basement door on the southeastern portion of the house would be at ground level. Vignali told Paukovitz that Imperial might be able to design the kind of home he wanted and would also be able to sell the shell materials for the home to Vignali.

Paukovitz contacted imperial and commenced negotiations with it for the design of the home and the sale of the shell materials for the home. An agent for Imperial came to the Paukovitz site and inspected it along with Paukovitz and Vignali. Imperial invited Paukovitz to come to its headquarters in Charleston, Illinois, to see how the homes were designed and constructed. After Paukovitz rejected several designs, Imperial and Paukovitz agreed on a design known as "Lou Paukovitz 88-14."

In June 1988, Vignali and Imperial entered into a contract for Vignali to purchase the plans and materials for the Paukovitz home. Approximately one month later, Paukovitz entered into a contract with Vignali to build the home on the Marseilles property. The contracts were virtually identical. The contract between Vignali and imperial refers to the home plans as "Lou Paukovitz 88-14".

Subsequent to the construction of the home, Paukovitz discovered that the basement walls were improperly supported and this lack of support was causing structural damage to the home. Because of this defect in the home, Paukovitz sued Imperial. His Second Amended Complaint contained a count for breach of implied warranty of habitability. That count was dismissed by the trial court without leave to re-plead. The Third Amended Complaint contained claims for breach of third-party beneficiary contract, brought by Paukovitz as a third-party beneficiary of the contract between Vignali and Imperial, and for negligent misrepresentation. These claims were dismissed with prejudice as well.

Implied warranty of Habitability

Illinois courts recognize an implied warranty of habitability arising out of contracts for sales of homes between builder-vendors and buyers. ( Petersen v. Hubschman Construction Co., Inc. (1979), 76 Ill. 2d 31, 389 N.E.2d 1154, 27 Ill. Dec. 746.) In order to prevail, the plaintiff must prove that the defendant was the builder-vendor of the home. Wiersema v. Workman Plumbing, Heating & Cooling, Inc. (1980), 87 Ill. App. 3d 535, 409 N.E.2d 159, 42 Ill. Dec. 664.

It is undisputed that Imperial did no construction work on Paukovitz' home. It only supplied the shell materials and the plans which Vignali then used to construct the residence. The parties do not cite, and we are unable to find, any reported cases in which a court held that the supplier of plans and shell materials was a builder-vendor for the purposes of the implied warranty of habitability. Moreover, in every case cited by Paukovitz to support his contention that Imperial was the builder-vendor, the defendant had conducted some kind of construction work on the home in question. Inasmuch as Imperial did not contribute to the actual construction of Paukovitz' home, we find that it was not a builder-vendor which could be held liable for the breach of the implied warranty of habitability.

Third-Party Beneficiary Contract

A person who is not a party to a contract may nevertheless sue based on the contract if that person is directly benefitted by the contract. ( People ex rel. Resnik v. Curtis & Davis, Architects & Planners, Inc. (1980), 78 Ill. 2d 381, 400 N.E.2d 918, 36 Ill. Dec. 338.) The benefit must be direct to the person asserting third-party beneficiary status; an incidental benefit is not a sufficient basis for the claim. ( Wheeling Trust & Savings Bank v. Tremco Inc. (1987), 153 Ill. App. 3d 136, 505 N.E.2d 1045, 106 Ill. Dec. 254.) A person's status as third-party beneficiary depends upon the intent of the parties to the contract and must be determined on a case-by-case basis. ( Midwest Concrete Products Co. v. LaSalle National Bank (1981), 94 Ill. App. 3d 394, 418 N.E.2d 988, 49 Ill. Dec. 968.) Circumstances surrounding the execution of the contract may be considered (155 Harbor Drive Condominium Assoc. v. Harbor ...

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