Appeal from the Circuit Court of the 14th Judicial Circuit, Whiteside County, Illinois No. 97--LM--162 Honorable Vicki R. Wright Judge, Presiding
The opinion of the court was delivered by: Justice Breslin
IN THE COURT OF APPEALS OF THE STATE OF ILLINOIS
Defendant Rubloff-Sterling (Purchaser) appeals from the trial court's issuance of summary judgment in favor of plaintiff Lawrence E. Reaver (Seller) regarding a real estate contract dispute. The trial court held the contract unambiguously entitled the Seller to interest payments on the agreed sales price even though the Purchaser failed to exercise its option to buy the parcel of land. Based on a careful review of the contract, we affirm. In so doing, we also hold that the payment of statutory interest on this judgment does not amount to the payment of interest on interest, so as to violate the prohibition against compound interest.
The parties' initial agreement concerned a 29.5-acre parcel of commercial real estate. The Purchaser's obligation to close the transaction was subject to its obtaining, within 45 days of the signing of the contract, the permission of the Illinois Department of Transportation to install two curb cuts that would allow more convenient access to the property. The contract also contained a "prevailing party" provision, obligating the losing party to pay the prevailing party's attorney fees in the event of litigation over the contract.
The parties later executed a substantial amendment to the original sales contract. Through the amendment, the original parcel was divided into two smaller parcels -- parcel 1 and parcel 2. The parties closed on parcel 1 for a price of $458,450, and the Purchaser was granted an option to buy parcel 2 if it could obtain the desired curb cuts.
The disputed provisions of the amendment read as follows: "Purchase Price for the Premises. [A]s consideration for this Second Amendment, Purchaser shall pay [the] Seller the sum of $1,750 upon the execution of this agreement which shall be non-refundable. Purchaser shall pay to the Seller for Parcel 2 of the Premises *** the sum of $668,550, payable $5,000 as earnest money which has been deposited *** and the balance of $663,550 on the Closing Date for Parcel 2, together with any accrued but unpaid interest at the rate of 8.25% from the date of the closing of Parcel 1. Interest on the $663,550 shall be payable quarterly in arrears from the date of the closing of Parcel 1. This interest shall be refundable only in the event that the Seller is unable to complete the sale of Parcel 2.
The Purchaser never obtained permission for the curb cuts and made no quarterly interest payments. When the Purchaser refused to pay the interest payments, the Seller commenced this suit.
The Seller filed a motion for summary judgment contending that the plain language of the contract provided that he was owed approximately $40,000 in interest on the option to buy parcel 2. In granting summary judgment to the Seller, the court awarded him $41,057.16 (3 payments of $13,685.72) in interest pursuant to the contractual amendment. In addition, the court granted the Seller $7,633.20 in attorney fees and $3,382.70 in statutory interest. The statutory interest payments were calculated as follows:
Amount DueDate DueInterest from date due to date of Judgment- $13,685.728/14/96678 days at 5% = $1,271.08 $13,685.7211/14/96586 days at 5% = $1,098.61 $13,685.723/14/96466 days at 5% = $873.64 $3,243.33.
The Purchaser now appeals.
The central question on appeal is whether the trial court erred when it found the contract unambiguously required the Purchaser to pay the Seller interest on the agreed sales price even though the Purchaser failed to exercise its option to buy the parcel.
When construing a contract, the contractual terms are given their plain and ordinary meaning. Little v. Tuscola Stone Co., 234 Ill. App. 3d 726, 600 N.E.2d 1270 (1992). Construing the language of a contract is a question of law appropriate for summary judgment unless the contract is ambiguous. People ex rel. Burris v. Memorial Consultants, Inc., 224 Ill. App. 3d 653, 587 N.E.2d 34 (1992). A contract is ambiguous if it is subject to more than one reasonable interpretation. Pre-Fab Transit Co. v. Northbrook Property & Casualty Insurance Co., 235 Ill. App. 3d 103, 600 N.E.2d 866 (1992). If the language of a contract is unambiguous, the intent of the parties must be determined solely from the words of the contract. Farm Credit Bank v. Whitlock, 144 ...