The opinion of the court was delivered by: Justice Steigmann
Appeal from Circuit Court of Champaign County
Honorable Arnold F. Blockman, Judge Presiding.
In December 1994, plaintiffs, Jo Ann Kirkruff and James L. Armstrong, as trustees of the Helen B. Armstrong Family Trust (the Trust), filed suit against defendant, Tad Wisegarver, alleging, inter alia, that Wisegarver breached his fiduciary duty (count I) and violated the Consumer Fraud and Deceptive Business Practices Act (Act) (815 ILCS 505/1 et seq. (West 1994)) (count III) in his capacity as their real estate broker. (The trial court later granted plaintiffs' motion to voluntarily dismiss the remaining three counts.) In February 1997, the trial court contemporaneously conducted a jury trial as to count I and a bench trial as to count III. A jury subsequently returned a verdict in plaintiffs' favor on count I and awarded $58,200 in damages. In June 1997, the trial court found as a matter of law that damages totaled $90,324.74 (Wisegarver's stipulated net profits) and entered judgment in that amount on count I. The court also entered judgment in Wisegarver's favor on count III.
Wisegarver appeals, arguing that the trial court erred by (1) denying his motions for directed verdict and judgment n.o.v. because the evidence failed to show that (a) a fiduciary relationship existed, (b) Wisegarver breached his fiduciary duty, or (c) Wisegarver's breach of fiduciary duty proximately caused plaintiff's injury; and (2) entering judgment in plaintiffs' favor on count I in an amount exceeding the jury's award. Plaintiffs cross-appeal, arguing that the court's finding that Wisegarver did not violate the Act was against the manifest weight of the evidence. We affirm in part, reverse in part, and remand for further proceedings.
I. BACKGROUND The material in this section is not to be published pursuant to Supreme Court Rule 23. 166 Ill. 2d R. 23. [The following material is not to be published pursuant to Supreme Court Rule 23.]
The evidence at trial showed the following. The Trust owned a 20-acre tract of unimproved farmland located in Champaign County, Illi- nois. Following the death of her mother (the Trust's settlor), Kirkruff contacted Ray Eichelberger, an appraiser, to determine the fair market value of the property. When Kirkruff received Eichelberger's September 1992 appraisal, she noticed on a copy of a plat an advertisement by Wisegarver Real Estate indicating that Wisegarver specialized in land development and subdivision marketing and sales.
Sometime in early January 1993, Kirkruff contacted Wisegarver "to be an agent on [her] behalf in developing that property." According to Kirkruff, she specifically asked him to determine if the land could be developed and to look into marketing the property. Wisegarver indi- cated that he would research the issue and get back with her. In late January 1993, Kirkruff spoke with Wisegarver by telephone, and he told her that problems existed with the property, in particular, a gas pipe- line ran through the property, and there would be problems with annex- ation. Wisegarver also told her that developing the property would be "too costly" and "too time-consuming" for Kirkruff to do it.
Wisegarver testified that he holds himself out as a specialist in the marketing and sales of development land. During his initial conversation with Kirkruff, she told him she was interested in Wisegarver's marketing the property and determining whether it could be developed. Wisegarver stated that after speaking with Kirkruff, he "was going to do the informative investigations, basically for her and for [himself]." Wisegarver also stated that when he first investigated the property, he observed a Marathon Pipe Line Company (Marathon) sign which indicated to him that there was an easement and a pipeline on the property. According to Wisegarver, the easement constituted an important factor in determining the property's development potential because "if you had an easement that encompassed an entire property and that easement cannot be revised or changed, of course that affects the value of the property and also affects the development of the property." He then called Marathon and Chicago Title and Insurance Company, and he found that an easement covered the entire property.
On February 12, 1993, Marathon wrote Wisegarver and informed him that it had completed flagging the pipeline and that it was "sending [him] a copy of [its] guidelines for work or structures built near our pipelines." Wisegarver stated that he made Kirkruff "aware" that he had contacted Marathon about the easement. When asked if he knew in early February that no problems existed with respect to the pipeline over the property, Wisegarver replied "[n]ot necessarily." (He eventually obtained a partial release of the easement for $200.)
Wisegarver learned in early February 1993 that the property was not within the city's zoning limits, which meant that it was subject to development requirements that were less stringent than if it were within those zoning limits. He acknowledged that even though he knew the property was not within the city's zoning limits, he nonetheless told Kirkruff it would be a "very risky development."
In late January or early February 1993, Wisegarver contacted Steve Kurth of Altech Consultants (Altech) and told Kurth that he was looking at some property and "there could be some work down the road maybe." A "Professional Services Agreement" between Wisegarver and Altech indicated, in relevant part, as follows: (1) the order date for Altech's services was "Early February, 1993"; (2) Kurth prepared the agreement in response to a meeting with Wisegarver; (3) Altech agreed to "plat a 15 lot - 20 acre subdivision"; and (4) the project name was "Wisegarver Section 32 Subdivision." Wisegarver testified that he could not remember whether he told Kirkruff that he had entered into an agreement with Altech. Kirkruff testified that Wisegarver never told her that he had hired Altech to develop the property as his subdivision.
Around February 8, 1993, Kirkruff again spoke with Wisegarver to reaffirm that the property could not be developed. She testified that during that conversation, Wisegarver told her that "it would be risky, time-consuming, costly, and because of the restrictions, he would have to set before meetings, board meetings, make several trips back and it would be not feasible for [her] to do it." Shortly after that conversation, Wisegarver's attorney prepared an agreement for Wisegarver to purchase the property at the appraised value of $46,000. Kirkruff testified that she did not see the written contract until sometime during March 1993.
Wisegarver testified that during the February 8, 1993, conversation, he told Kirkruff that he would be willing to buy the property at the appraised value because, even though the property had obstacles to overcome, he would be willing to attempt to develop the property. He also stated that he told Kirkruff he would pay the appraised price ($46,000, or $2,300 per acre) "due to the easement and the situation with the property." He acknowledged that he told Kirkruff that the property was worth no more than $2,300 per acre. He further stated that the property could have been sold for as much as $2,500 per acre, "[b]ut in the situation between [him and Kirkruff], if [he] were to market the property, [he] would charge a commission which basically off of that would be the same net to [Kirkruff]." Wisegarver never gave Kirkruff written notice that he was acting on his own behalf in connection with the development, nor did he ever make any efforts to market the property as Kirkruff had requested.
On April 14, 1993, Kirkruff signed an agreement to sell the property to Wisegarver for $46,000. At that time, Wisegarver told Kirkruff that "he would keep [the property] as farmland but that in the long hall [sic] it'd be investment property with maybe way down the line potential in development." Wisegarver did not tell her that he was in the process of getting the property approved for subdivision. Wisegarver proceeded to develop the property into 13 separate lots, the first of which he sold in June or July 1993, shortly after the Champaign County Board approved the final plat on June 15, 1993. His net profits after developing the property were "approximately" $90,324.74 (the total net profit of the subdivision as set forth on an account ledger prepared by Wisegarver).
Kurth testified regarding the work his company did on the subdivision, as follows:
"We eventually[,] *** starting in about April or May [1993,] did the boundary line and topographic surveys that are required to be part of the plans. We went to numerous meetings with the county in order to eventually secure approval. We prepared a final plat and plans of the tract. We bid out work to contractors. We would do the grading work and the paving work and the tile and drainage work. We did provide the field construction layout services for the contractors that did the physical site work on the land. We set all the lot and subdivision boundary corners, and we provided inspections of the construction work to comply with county require- ments."
Frank DiNovo, director of the Champaign County Department of Planning and Zoning (Department), testified that either Kurth or Wisegarver contacted him regarding the property at issue sometime before April 8, 1993. It took approximately two months for Wisegarver to obtain approval of the final plat in the subdivision. DiNovo characterized the development of the property as difficult but not extraordinarily so. He stated that "[i]t had its unique elements, but I don't think extraordinary would be an accurate way of characterizing it." DiNovo acknowledged that if a property owner has the right to develop a particular parcel for subdivision based upon its zoning classification, the Department must allow the development if the owner complies with all the technical requirements. He also stated that the property at issue did not have to be rezoned, and the pipeline's existence "was not a major issue in the case."
Kirkruff stated that between the time Wisegarver told her it was not economically feasible to develop the land and the date she entered into the agreement to sell the land to him, she asked him to sell the property for her based upon his representations. They agreed upon a commission of "[a]round 6 percent"; however, Wisegarver never listed or advertised the property. In addition, during January through April 1993, Wisegarver failed to advise her that he was attempting to develop the property for his own gain and that she should find another realtor to represent her interests. He did not tell her that the property's location outside the city's zoning limits was good for development purposes. She did not recall his telling her that he had contacted Marathon regarding the pipeline.
During the period from January 1993 through April 30, 1993 (when the parties closed the sale of the property), Kirkruff trusted Wisegarver and believed he was working for her as her real estate agent. She further stated that had she known Wisegarver was in the process of developing and subdividing the land on his own, she would not have sold him the property for $46,000. Instead, she would have contacted another realtor who specialized in land sales to assist her in developing the property herself. Kirkruff also stated that she "[e]asily" had enough assets to develop the property and would have been prepared to enlist the services of another realtor to assist her had Wisegarver not told her it was not economically feasible. On cross-examination, Kirkruff acknowledged that she had no experience in subdividing property.
Patricia Kaisner, a real estate broker and owner of a real estate construction and development company in Bloomington, Illinois, testified as plaintiffs' expert witness. Kaisner testified that in forming her opinions, she reviewed the complaint, Wisegarver's response thereto, the depositions of Kirkruff and Wisegarver, and the attached exhibits. Kaisner opined that a fiduciary relationship arose between Wisegarver and Kirkruff when Kirkruff initially contacted Wisegarver, who held himself out as a realtor and a professional, to seek his advice and opinion regarding the property. She also opined that as a result of that fiduciary relationship, Wisegarver had a responsibility to share with plaintiffs information about the property's economic potential, particularly in light of the fact that he was interested in the property for himself.
In addition, Kaisner opined that Wisegarver breached his fiduciary duties in the following ways: (1) when he misrepresented that it was not economically feasible to develop the land; (2) when he failed to give plaintiffs written notice that he was acting on his own behalf in his transaction with them in violation of the Real Estate License Act of 1983 (225 ILCS 455/1 et seq. (West 1992)); (3) when he failed to dis- close all relevant information in his possession, including his con- tractual arrangement with Altech, his communication with Marathon, and his plan to buy the property with the express intention to subdivide it and sell individual lots; (4) when he put his own interests ahead of plaintiffs' and proceeded to subdivide the land and sell all of the lots for a substantially higher price than he had paid; (5) when he failed to list the property for sale as Kirkruff requested; (6) when he failed to disclose to plaintiffs the potential costs and profits of developing and subdividing the property; and (7) when he failed to inform plaintiffs that he was taking actions to obtain approval to subdivide the property. She also stated that Wisegarver's representation that the pipeline was a barrier to developing the property was "ludicrous" because such things "are typical obstacles that anybody that looks at developing would have to overcome." She opined that even after Wisegarver informed Kirkruff of his interest in purchasing the property, his fiduciary duty to her continued.
On cross-examination, Kaisner acknowledged that someone living in Oregon (as Kirkruff did) would not be able to personally "orches- trate" the subdivision process from that location. When asked whether she knew of anyone who would hire themselves out to develop property for people living on the west coast, Kaisner responded as follows:
"No, I'm not aware of it. My experience has been that it's financially advantageous enough that most people would be interested in doing it, doing it for himself or with partners or some type of a partner arrangement."
In February 1997, the jury entered judgment in plaintiffs' favor on count I and awarded $58,200 in damages. In June 1997, the trial court found as a matter of law that damages totaled $90,324.74 (Wisegarver's stipulated net profits) and entered judgment in that amount on count I. The court also entered judgment in Wisegarver's favor on count III. This appeal ...