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03/20/97 LASALLE NATIONAL TRUST v. BOARD DIRECTORS

March 20, 1997

LASALLE NATIONAL TRUST, N.A. AS TRUSTEE UNDER TRUST NO. 11611, DATED FEBRUARY 20, 1993, CARMA MCCLURE, THE BENEFICIAL OWNER THEREUNDER, PLAINTIFFS-APPELLEES,
v.
BOARD OF DIRECTORS OF THE 1100 LAKE SHORE DRIVE CONDOMINIUM, AN ILLINOIS NOT-FOR-PROFIT CORPORATION, DEFENDANT-APPELLANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE JOHN V. VIRGILIO, JUDGE PRESIDING.

Released for Publication April 24, 1997.

Presiding Justice Wolfson delivered the opinion of the court. Cerda and Burke, JJ., concur.

The opinion of the court was delivered by: Wolfson

PRESIDING JUSTICE WOLFSON delivered the opinion of the court:

Carma McClure wanted to renovate her Lake Shore Drive penthouse condominium. She ran into some problems, not the least of which was the building's condominium board. She sued the Board, contending it violated its fiduciary duty to her when it impeded her attempts to rebuild the apartment. That, she said, was constructive fraud.

After all equitable matters were settled, a bench trial was held to determine liability and damages. The trial court ruled in the owner's favor. It awarded damages of $896,609.52. The Board appeals. With the exception of parts of the damages finding, we affirm the trial court.

FACTS

The defendant, the Board of Directors of the 1100 Lake Shore Drive Condominium (Board), is charged with directing the operation and management of the 1100 North Lake Shore Drive Condominium Association (Association). The LaSalle National Trust is the legal owner of units 39A, 39B, and 40B located at 1100 North Lake Shore Drive, Chicago, Illinois. Plaintiff Carma McClure (McClure) is the beneficial owner of the units. These units comprise the penthouse at 1100 Lake Shore Drive. They always have been sold as one unit. An earlier owner added a roof house on the 41st floor.

McClure filed a complaint in the Chancery Division of the Circuit Court of Cook County on September 19, 1992. The complaint originally named two board members as defendants as well as the Board, but the individual board members were dismissed. The parties settled all equitable matters. The Chancery Court transferred the case to the Law Division for a trial on liability and damages only.

When McClure purchased the penthouse for $1.4 million on March 20, 1991, the unit was not in good condition. She and her husband, James Martin, decided to completely renovate the penthouse. The renovation plans included the construction of a new, expanded roof house and a roof deck.

McClure began the renovation project by demolishing the interior of the penthouse. Her architect for the renovation was the Landahl Group (Landahl).

McClure began the demolition work in 1991. She did not notify the Board. She did not have an appropriate city permit.

The demolition caused several problems. The Board was cited by Chicago because of McClure's failure to obtain a permit. An elevator cab was damaged. There were problems coordinating the contractors. The alarm system was accidently cut off for part of a day. Yard boxes and dumpsters were removed from the site allegedly in violation of Chicago ordinances. Two other units in the building were allegedly damaged because of the demolition. The Board claimed it incurred legal expenses as a result of these problems.

McClure paid for the damage to the elevator cab.

One of the allegedly damaged units belonged to Elizabeth Rann (Rann). Rann was the president of the association at the time of the demolition. Rann claimed that her apartment suffered $16,552 in damages. McClure paid these damages as part of an agreement with the Board. She maintained during the suit that the damages were not her fault and that the amount was inflated. She claimed she paid the damages in order to speed up construction. McClure presented evidence that Rann was having financial difficulties at the time of the alleged damage.

McClure finished the demolition in July 1991. She provided the Board and the city with a complete set of plans for the rest of the renovation project in October 1991.

Had the Board approved the plans immediately, work could have begun on November 5, 1991. The job would have taken 26 weeks to complete. It would have been completed in May 1992.

On September 24, 1991, the Board passed a resolution which said, "all expenses incurred by the Board in connection with the modification by a unit owner to his unit or adjacent living [sic] comment [sic] elements shall be assessed to the unit owner. Expenses which will be assessed include, but are not limited to engineering, architectural and attorney fees and the cost of documents, plans, and specifications."

Starting in June 1991, the Board refused to approve McClure's construction unless she agreed to assume responsibility for the roof. McClure offered to pay for one-third the cost of replacing the main and the machine room roofs if the Board would approve her plans. The machine room roof was not a limited common element.

On March 4, 1992, the Board submitted a proposed agreement to McClure that said she would have to meet certain conditions before it would approve the renovation project. McClure would have to pay Rann for the damage done to her unit. She would have to put a security deposit in escrow to cover future damages. She would have to pay for the expenses ($10,969) the Board incurred in reviewing and approving the renovation plans as required by the September resolution. She would have to agree to maintain, repair, and replace the roof. She would have to comply with Chicago's fire protection regulations. She would have to agree to design the roof top structure to be consistent with the overall design of the building. She would have to have a full time, on-site representative present during construction.

Owners of another unit doing renovations at the same time were also required to sign an agreement. That agreement required the owners to have a full-time, on-site field representative present, required the owners to post a bond, and required the owners to change some of their construction plans. These owners were not required to pay any money other than the escrow or to assume responsibility for a particular part of the building.

Although McClure disagreed with many of the agreement's provisions, she signed it on May 15, 1992, to get the Board's approval for her plans. Once she had its approval, she could get a city permit and begin construction. The Board approved the ...


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