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American National Bank and Trust Company v. Bentley Builders

October 20, 1999

AMERICAN NATIONAL BANK AND TRUST COMPANY, TRUST NO. 102592 08, PLAINTIFF-APPELLANT,
V.
BENTLEY BUILDERS, INC., DEFENDANT-APPELLEE



Appeal from the Circuit Court of Kane County. No. 96-MR-0207 Honorable Patrick J. Dixon and Gene L. Nottolini, Judges, Presiding.

The opinion of the court was delivered by: Justice Geiger

The plaintiff, American National Bank and Trust Company, Trust No. 102592 08, appeals from the following orders of the circuit court of Kane County: (1) the August 21, 1998, order dismissing count III of its complaint alleging breach of contract; (2) the December 3, 1998, order granting summary judgment on behalf of the defendant, Bentley Builders, Inc., as to count II of the plaintiff's complaint alleging slander of title; and (3) the December 3, 1998, order granting the defendant's motion to compel the return of earnest money deposit.

The facts relevant to the Disposition of this appeal are as follows. On August 5, 1993, the plaintiff and the defendant entered into a purchase agreement whereby the plaintiff agreed to sell five vacant lots to the defendant for $280,000. These lots were part of a subdivision known as "On Brentwood's Pond" in Geneva. Pursuant to the terms of the purchase agreement, the defendant deposited a total of $15,000 in earnest money with the plaintiff.

At the time the parties executed the purchase agreement, the vacant lots were unimproved and the plaintiff was in the process of obtaining final plat approval from the City of Geneva (the City). Paragraph 6(a) of the purchase agreement provided that the closing was to take place when the "lots [were] permitable by the [City]."

On March 29, 1995, the plaintiff sent the defendant a letter indicating that the closing could be scheduled. The plaintiff enclosed a letter from the City's building inspector to the plaintiff indicating that "building permits are now available for the construction of single family homes in the subdivision known as On Brentwood's Pond in Geneva, Illinois."

On April 12, 1995, the defendant sent the plaintiff a letter indicating that the defendant was not willing to close the transaction at that time. In this correspondence, the defendant explained that, according to industry custom, the lots would be "permitable" only when the plaintiff had completed those subdivision improvements necessary to secure occupancy permits from the City. The defendant therefore indicated that it would not close the transaction until the curbs, underground utilities, and "first lift" were completed.

On April 25, 1995, after several additional correspondences between the parties, the plaintiff sent the defendant a letter indicating that it considered the purchase agreement terminated. The plaintiff indicated that the defendant was in default under the terms of the purchase agreement because it had failed to close the transaction within 15 days of the plaintiff's notice that the lots were "permitable."

On May 8, 1995, the defendant recorded a copy of the purchase agreement document with the Kane County Recorder of Deeds.

On June 5, 1996, the plaintiff filed a verified complaint against the defendant. As subsequently amended, the complaint contained four counts. Count I sought a declaration that the defendant was in default of the purchase agreement and that the defendant had no rights, title, or interest in the five lots; count II sought damages for slander of title; count III sought damages for breach of contract; and count IV sought the alternative remedy of rescission of the purchase agreement. On August 18, 1996, the defendant filed a two-count counterclaim. Count I of the counterclaim sought specific performance of the purchase agreement; count II sought damages for breach of contract.

On June 8 and 9, 1998, the circuit court of Kane County conducted a bench trial. On August 4, 1998, the trial court filed a written memorandum decision. The trial court found that the term "permitable" was ambiguous and therefore found that its meaning could be derived only from parole evidence. After reviewing the evidence, the trial court found that lots were "permitable" at that time when the defendant could obtain a building permit from the City allowing it to commence construction on the lots. The trial court found that the defendant had been obligated to close the transaction upon the availability of the building permits and that the plaintiff had properly exercised its right to terminate the agreement when the defendant refused to do so.

The trial court therefore entered judgment in favor of the plaintiff as to count I of the complaint in the following respect: "It is declared that the August 5, 1993, agreement is terminated and that the defendant has no right[,] title[,] or interest in lots 33, 35, 43, 48 and 58 in ON BRENTWOOD'S POND SUBDIVISION Geneva, Illinois." The trial court also entered judgment in the plaintiff's favor as to count I of the defendant's counterclaim seeking specific performance. Additionally, the trial court denied the plaintiff any relief in its alternative count IV seeking rescission. As to count II (slander of title) and count III (breach of contract) of the plaintiff's complaint, as well as count II (breach of contract) of the defendant's counterclaim, the court continued the matter for reassignment to the law division for trial on "the money damages claims."

On August 21, 1998, when the matter came up for reassignment, the trial court entered the following order:

"(1) Based on the Court's ruling with regard to Count I of the Plaintiff's Second Amended Complaint, Count III [breach of contract] of Plaintiff's Second Amended Complaint and Count II [breach of contract] of the Amended Counterclaim are hereby dismissed. (2) Count II [slander of title] of Plaintiff's Second Amended Complaint is transferred [to the law division] *** for ...


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