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Board of Managers of the Village Centre Condominium Association v. Wilmette Partners

November 21, 2001

THE BOARD OF MANAGERS OF THE VILLAGE CENTRE CONDOMINIUM ASSOCIATION, INC., APPELLANT,
v.
WILMETTE PARTNERS, AN ILLINOIS LIMITED PARTNERSHIP, ET AL., APPELLEES.



The opinion of the court was delivered by: Justice Thomas

Docket No. 90439-Agenda 18-September 2001

UNPUBLISHED

At issue in this case are the requirements for a valid waiver of the implied warranty of habitability. The plaintiff, the Board of Managers of the Village Centre Condominium Association, Inc. (the Board), as representative of the owners of condominium units in relation to matters involving common elements, filed a one-count complaint in the circuit court of Cook County against defendants, Wilmette Partners (Wilmette), and Wilmette's general partner, Richard A. Keefe (Keefe), for breach of the implied warranty of habitability. The breach concerned the garage of the Board's condominium building.

Defendants moved to dismiss the Board's complaint with prejudice pursuant to section 2-619(a)(9) of the Illinois Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 1996)), on the ground that a disclaimer in the purchase contracts entered into by the unit owners and defendants barred any claims for breach of the implied warranty of habitability. The circuit court agreed with defendants and dismissed the Board's complaint with prejudice. The circuit court thereafter denied the Board's motion to vacate and entered a Supreme Court Rule 304(a) finding (155 Ill. 2d R. 304(a)). The Board thereafter filed a first amended complaint and a second amended complaint. The Board's second amended complaint remains pending before the circuit court.

The appellate court adopted the circuit court's written order as its order and affirmed the circuit court. No. 1-99-0571 (unpublished order under Supreme Court Rule 23). We allowed the Board's petition for leave to appeal (177 Ill. 2d R. 315), and now reverse the circuit and appellate courts.

BACKGROUND

For purposes of reviewing a court's ruling on a defendant's motion to dismiss, this court accepts as true the well-pleaded allegations of a plaintiff's complaint. River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 293 (1998). The well-pleaded facts in the Board's complaint show that in 1988 and 1989, defendant Wilmette developed a 36-unit condominium building in Wilmette, Illinois. The condominium building is a five-story structure. The two lowest levels include an indoor parking garage, which contains indoor ramps connecting the levels and leading from the upper level of the garage to the street. The parking garage is a common element of the building.

Wilmette used various real estate contracts to sell the condominium units. Twenty-nine of those contracts contained purported waivers of the implied warranty of habitability, while seven of those contracts did not. Only those contracts containing purported waivers of the implied warranty of habitability are at issue in this case.

The Board's complaint alleges that the upper level of the garage had certain specified design and construction defects which were not apparent prior to the sale of the condominium units. As a result of the design and construction defects, the concrete on the upper level of the garage floor developed cracks and separated, and the floor's structural support corroded. The upper level of the garage thus was incapable of supporting its own weight, was incapable of safely supporting the weight of normal vehicular traffic in the garage, and was in danger of collapsing into the lower level of the garage. Consequently, the garage could not be used by the unit owners for its intended purpose.

As noted, the Board filed suit against defendants for breach of the implied warranty of habitability with regard to the parking garage. Defendants then moved to dismiss the Board's complaint, arguing that a disclaimer in the purchase agreements was a valid disclaimer of the implied warranty of habitability. Defendants contended that the disclaimer was so clear and conspicuous that no other conclusion could be reached but that the unit owners read and understood the language in those disclaimers.

The disclaimers were set forth in section 10 of the purchase contracts and provided:

"EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 10, SELLER HEREBY EXCLUDES AND DISCLAIMS ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BY WAY OF ILLUSTRATION AND NOT LIMITATION, WARRANTIES OF FITNESS FOR PARTICULAR PURPOSE AND MERCHANTABILITY.

THE LIMITED WARRANTIES CONTAINED HEREIN SHALL BE IN LIEU OF ANY OTHER WARRANTY, WHETHER EXPRESSED OR IMPLIED, PROVIDED THAT IN THE EVENT ANY ITEM WARRANTED HEREIN IS DEEMED TO BE A CONSUMER PRODUCT UNDER THE MAGNUSON-MOSS WARRANTY-FEDERAL TRADE COMMISSION IMPROVEMENT ACT, THEN, AND ONLY IN THAT EVENT, THE DISCLAIMER OF IMPLIED WARRANTY SHALL COMMENCE FROM AND AFTER THE EXPIRATION OF THE EXPRESS WARRANTIES SET FORTH HEREIN."

Following briefing and argument, the circuit court entered a written order dismissing the Board's complaint with prejudice pursuant to section 2-619. The circuit court rejected the Board's argument that the disclaimer at issue was defective because it did not use the phrase "implied warranty of habitability." The circuit court also rejected the Board's argument that the disclaimer failed to put unit owners on notice of its implications. The circuit court concluded that given the conspicuous location of the disclaimer near the signature page, the large size print of the disclaimer, and the plain language of the disclaimer, the disclaimer was, as a matter of law, part of the agreement ...


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