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02/21/97 JON L. NELSON AND ANNE E. NELSON v. WALTER

February 21, 1997

JON L. NELSON AND ANNE E. NELSON, PLAINTIFFS AND COUNTER-DEFENDANTS-APPELLANTS,
v.
WALTER E. ANDERSON AND SHELLY S. ANDERSON, DEFENDANTS AND COUNTER-PLAINTIFFS-APPELLEES.



Appeal from the Circuit Court of St. Clair County. No. 93-CH-260. Honorable Ellen A. Dauber, Judge, presiding.

The Honorable Justice Maag delivered the opinion of the court. Hopkins and Welch, JJ., concur.

The opinion of the court was delivered by: Maag

The Honorable Justice MAAG delivered the opinion of the court:

In this real estate contract action, summary judgment was granted in favor of the buyers on the ground that the sellers had not provided merchantable title. The sellers appeal.

On April 17, 1993, plaintiffs Jon and Anne Nelson (sellers) contracted to sell their home to defendants Walter and Shelly Anderson (buyers). The contract required buyers to pay an earnest money deposit of $1,500, with the balance of the purchase price to be paid on delivery of a warranty deed conveying a merchantable title, free and clear of all encumbrances, except those mentioned in the contract. The contract provided for closing within 30 days of signing, though the closing date was subsequently extended to June 30, 1993, by written agreement of the parties.

The contract further provided that sellers would employ a title insurance company to issue a report of title; buyers had 10 days from the receipt of the title report to voice objections, and sellers then had 90 days in which to satisfy buyers' objections.

The title report issued to the buyers by Chicago Title Insurance Company in early June 1993 indicated that the house was positioned less than 10 feet from the north lot line, in violation of an applicable setback covenant. Specifically, the recorded subdivision plat to which the instant property belonged contained a covenant prohibiting a building or any part of a building on any residential lot from being positioned less than 10 feet from the property lines of the adjoining owners. The record reveals that sellers' property was only 4.7 feet from the lot's north boundary line, in violation of the covenant. Buyers made a specific, timely objection based on the violation.

Sellers responded by obtaining written assurances from the title company that, for an additional fee, it would insure over the building line exception at issue. Buyers then indicated that they were not satisfied with the title company's assurances and remained specifically concerned with the title company's guarantee to issue policies to any future buyers of the property. This prompted additional correspondence from the title company, in which it expressly assured that it would insure over the building line exception in the future for subsequent purchasers.

Buyers remained dissatisfied with the condition of the title and refused to close by the closing date. Buyers subsequently purchased another piece of property. Sellers ultimately sold their property at a lower purchase price.

Buyers filed suit to recover their earnest money deposit, while sellers sued for damages. The cases were consolidated by the St. Clair County circuit court. Each party filed a motion for summary judgment. The trial court granted buyers' motion, reasoning that sellers had breached the real estate contract by failing to deliver merchantable title.

On appeal, sellers argue that:

(1) They complied with the terms of the contract by responding to the purchasers' objections to the title insurance commitment in a timely fashion; and

(2) The trial court erred in finding that title to the property was not merchantable because of the building line violation.

When reviewing a trial court's grant of summary judgment, the issue before the appellate court is whether the pleadings, depositions, admissions, and affidavits on file show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. If the court of review determines that a genuine issue of material fact exists, then the entry of summary judgment must be overturned. Jewish ...


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