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12/08/97 JOHN P. PEARL v. WILLIAM WAIBEL

December 8, 1997

JOHN P. PEARL, PLAINTIFF-APPELLANT, AND JOHN P. PEARL & ASSOCIATES, LTD., AND JOHN P. PEARL, AS TRUSTEE UNDER TRUST AGREEMENT DATED MAY 24, 1976, AND KNOWN AS THE PEARL ENTERPRISES LAND TRUST/PARTNERSHIP AGREEMENT, PLAINTIFFS,
v.
WILLIAM WAIBEL, DEFENDANT-APPELLEE.



Appeal from Circuit Court of Peoria County. No. 93L11. Honorable John A. Barra, Judge Presiding.

Rehearing Denied January 15, 1998. Released for Publication January 15, 1998.

Honorable James A. Knecht, J., Honorable Frederick S. Green, J. - Concur, Honorable Robert J. Steigmann, J. - Concur. Justice Knecht delivered the opinion of the court.

The opinion of the court was delivered by: Knecht

The Honorable Justice KNECHT delivered the opinion of the court:

On July 9, 1996, plaintiffs John P. Pearl, individually and as a trustee, and John P. Pearl & Associates filed a fourth-amended complaint in the circuit court of Peoria County against William Waibel, alleging fraud in the sale of land. The trial court dismissed the complaint with prejudice, ruling the fourth-amended complaint failed to relate back to the original complaint and thus violated the statute of limitations. Plaintiffs filed a motion pursuant to Supreme Court Rule 304(a) (155 Ill. 2d R. 304(a)), requesting the trial court find no just reason for delaying the appeal of the dismissal of his claims against Waibel with prejudice. The trial court granted plaintiffs' motion, and Pearl appealed. On appeal, Pearl contends the trial court erred in finding the fourth-amended complaint did not relate back to the original complaint. We agree and reverse.

On January 7, 1993, plaintiffs filed a complaint against Waibel and Cullinan Properties, Ltd. (Cullinan Properties). According to the complaint, in approximately 1989, Pearl began actively considering possible sites for an office building for John P. Pearl & Associates. In the years before his search, Waibel repeatedly urged Pearl to purchase his property (Waibel property). Plaintiffs entered an oral agreement with Cullinan Properties, through either or both Diane Cullinan and Larry Weber, to act as plaintiffs' broker in this search. When Pearl indicated to Waibel plaintiffs' interest in purchasing the Waibel property, Pearl learned Waibel had entered into a listing agreement with Cullinan Properties. Waibel was aware of plaintiffs' needs through his agent, Cullinan Properties.

Waibel knew of the material defects in the Waibel property, i.e., the property was covered with fill from the construction of Route 6, the fill made the property more expensive than usual for construction of an office building, and thus it was unsuitable for an office site. Neither Waibel nor Cullinan Properties informed plaintiffs of this defect prior to closing.

The complaint further alleged plaintiffs submitted an offer for the Waibel property through Cullinan Properties on June 10, 1989. Five days later, Waibel accepted plaintiffs' offer via Cullinan Properties. From that point on, Cullinan Properties served as the broker and agent for both Waibel and plaintiffs in the sale of the property. On January 9, 1990, Waibel conveyed the property to Pearl, as trustee for the Pearl Enterprises Land Trust/Partnership Agreement. In or about April 1991, plaintiffs learned for the first time the fill on the property made it more costly for development.

The original complaint contained three counts: (1) fraud, (2) breach of fiduciary duty, and (3) negligent misrepresentation. In count I, plaintiffs contended they relied on Waibel to provide material information regarding the suitability of the property as an office site and he intentionally failed to disclose the property was covered with fill. In count II, plaintiffs alleged Cullinan Properties breached its duty to discover and provide plaintiffs with the material information regarding the Waibel property. In count III, plaintiffs alleged Cullinan Properties, aware of plaintiffs' specific needs, represented the Waibel property was suited for those needs.

Cullinan Properties moved to dismiss the complaint, arguing counts II and III failed to state a cause of action. The trial court granted its motion on April 30, 1993, and granted plaintiffs leave to replead. Waibel filed a motion to dismiss count I of the original complaint. The record provides no indication on how Waibel's motion was resolved, whether with an order or a voluntary dismissal.

On June 1, 1993, plaintiffs filed their first-amended complaint against Waibel and Cullinan Properties. According to the first-amended complaint, plaintiffs and Cullinan Properties entered into an oral agreement Cullinan Properties would act as plaintiffs' broker and agent in finding an office site. Pearl learned Waibel entered into a listing agreement with Cullinan Properties. The listing agreement between Waibel and Cullinan Properties terminated on December 1, 1988. Waibel knew through his agent Cullinan Properties of plaintiffs' specific needs.

Weber and Cullinan informed plaintiffs another company was expected to make an offer on the property very soon and they solicited plaintiffs to make an offer on the Waibel property. A listing prepared by Cullinan Properties with the Peoria County board of realtors indicated the property was being farmed. In June 1989, Cullinan informed plaintiffs they had no time to have the property appraised because unless plaintiffs purchased it quickly, "out-of-town buyers" would purchase the Waibel property within a few days. Cullinan urged plaintiffs to make an immediate offer, without an appraisal or investigation from anyone other than Cullinan Properties. Plaintiffs received an environmental disclosure document from Waibel on or about November 30, 1989, indicating the property was "unimproved farm land" and no "landfill" existed on the property.

Count I of the first-amended complaint repeated the allegations of fraud against Waibel, alleging an intentional failure to disclose. Counts II and III alleged a breach of fiduciary duty and negligent misrepresentation, respectively, against Cullinan Properties. Count III maintained Cullinan Properties represented to plaintiffs the Waibel property was suited to plaintiffs' needs for an office site.

On April 21, 1994, the trial court granted plaintiffs' motion for a voluntary dismissal. The trial court ordered all claims against Cullinan Properties and Waibel dismissed ...


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