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09/30/97 NBD BANK v. KRUEGER RINGIER

September 30, 1997

NBD BANK, AS TRUSTEE UNDER TRUST NO. 4172-HP, SUCCESSOR IN INTEREST TO NBD TRUST COMPANY OF ILLINOIS, AS TRUSTEE UNDER TRUST NO. 4172-HP, SUCCESSOR IN INTEREST TO FIRST NATIONAL BANK OF HIGHLAND PARK, UNDER TRUST NO. 4172, AND KLAIRMONT ENTERPRISES, INC., BENEFICIARY OF NBD BANK TRUST NO. 4172-HP, SUCCESSOR IN INTEREST TO NBD TRUST COMPANY OF ILLINOIS, AS TRUSTEE UNDER TRUST NO. 4172-HP, SUCCESSOR IN INTEREST TO FIRST NATIONAL BANK OF HIGHLAND PARK, UNDER TRUST NO. 4172, PLAINTIFFS-APPELLANTS,
v.
KRUEGER RINGIER, INC., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. No. 93 L 09530. Honorable David Lichtenstein, Judge Presiding.

Released for Publication November 26, 1997.

The Honorable Justice Zwick delivered the opinion of the court. Greiman, P.j., and Theis, J., concur.

The opinion of the court was delivered by: Zwick

The Honorable Justice ZWICK delivered the opinion of the court:

Plaintiffs brought this action in tort to recover their costs incurred investigating, cleaning, removing and restoring Petroleum contaminated soil on a parcel of land purchased from defendant, Krueger Ringier, Inc., (Krueger). Defendant filed a motion to dismiss plaintiffs' claims pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 1996)). The trial court dismissed plaintiffs' action with prejudice, ruling, inter alia, that the tort-based recovery sought by plaintiffs consisted of damages for "economic loss" and was precluded by the supreme court's decision in Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 435 N.E.2d 443, 61 Ill. Dec. 746 (1982). Plaintiffs have appealed the dismissal of their claims, asserting that (1) the doctrine enunciated in Moorman does not bar their recovery and (2) liability should be imposed upon defendant as a matter of public policy.

On or about August 19, 1986, plaintiffs entered into a real estate sales contract with defendant for the purchase of certain real property, consisting of approximately 1,000,000 square feet, which was then commonly known as the Hall Printing Plant, on which defendant had conducted a commercial printing business. The subject property consisted of two distinct parcels of land, one of which was located north of Diversey Avenue at approximately 4600 West and was improved with various industrial buildings which contained certain items of printing equipment. The second parcel consisted of an unimproved lot situated immediately south of Diversey Avenue, also at approximately 4600 West.

Defendant had ceased its printing operation and vacated the premises sometime before August 19, 1986. Prior to the execution of the real estate sales agreement, the owner of the beneficial interest of plaintiffs' land trust walked through the property and conducted a visual inspection. The parties closed the real estate transaction on December 22, 1986.

In late 1990, plaintiffs discovered the existence of contamination to the underground soil on the unimproved lot located on the south side of Diversey Avenue. Waste water was removed from the subsurface of the lot in December 1990, and a sludge mixture was reclaimed from the subsurface in late 1991. Plaintiffs thereafter learned that the contamination possibly resulted from a petroleum-based substance which had leaked from ruptured underground storage tanks on the unimproved lot. In July 1993, plaintiffs discovered that a petroleum-based substance from the underground storage tanks had contaminated the soil beneath surface.

Plaintiffs filed suit in August 1993, claiming that defendant was liable to them based upon the contaminated condition of this unimproved lot. Plaintiffs' complaint, as finally amended, consisted of three counts and sought damages in excess of $30,000 as recovery for costs incurred "in the inspection and testing of subsoil, reclamation, removal of the tanks and in attempting to reach a corrective measure so as to return the soil[,] both the subsurface and surface[,] to a safe condition." In Count I of the complaint, plaintiffs alleged that defendants were liable under section 353 of the Restatement (Second) of Torts, "Undisclosed Dangerous Conditions Known to Vendor." Restatement (Second) of Torts § 353 (1965). Count II merely incorporated by reference the substantive allegations in Count I and alleged that plaintiffs' "injuries and damages [were] a direct and proximate result of defendant's *** actions." In Count III, plaintiffs again incorporated by reference the substantive allegations in Count I and asserted that, as a matter of public policy, defendant should be held liable for the cost of removing the underground storage tanks, abatement of the resulting contamination and reclamation of the soil. The trial court dismissed plaintiffs' complaint with prejudice, and plaintiffs have appealed.

We initially address plaintiffs' claim that the trial court erred in applying the Moorman doctrine so as to preclude recovery under section 353 of the Restatement (Second) of Torts. Restatement (Second) of Torts § 353 (1965).

In general, a vendor of land is not subject to liability for physical harm caused to his vendee or others while upon the land after the vendee has taken possession by any dangerous condition, whether natural or artificial, which existed at the time that the vendee took possession. See Restatement (Second) of Torts § 352 (1965). This principle reflects the doctrine of caveat emptor, which mandates that, in a real estate transaction, the deed of conveyance represents the full agreement of the parties and excludes all other terms and liabilities. See Heider v. Leewards Creative Crafts, Inc., 245 Ill. App. 3d 258, 275, 613 N.E.2d 805, 184 Ill. Dec. 488 (1993).

However, this general rule of nonliability is subject to the following exception set forth in section 353:

"(1) A vendor of land who conceals or fails to disclose to his vendee any condition, whether natural or artificial, which involves unreasonable risk to persons on the land, is subject to liability to the vendee and others upon the land with the consent of the vendee or his subvendee for ...


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