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Capiccioni v. Brennan Naperville

April 15, 2003

DEAN CAPICCIONI AND MAJEL CAPICCIONI, PLAINTIFFS-APPELLANTS,
v.
BRENNAN NAPERVILLE, INC., D/B/A REMAX NAPERVILLE, AND SHARON CLERMONT, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County. No. 01-AR-1450 Honorable Richard A. Lucas, Judge, Presiding.

The opinion of the court was delivered by: Justice Callum

UNPUBLISHED

Plaintiffs, Dean and Majel Capiccioni, sued defendants, Brennan Naperville, Inc. (Brennan), and Sharon Clermont, asserting claims under the Real Estate License Act of 2000 (Real Estate License Act) (225 ILCS 454/1--1 et seq. (West 2000)), the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2000)), common-law fraud, and negligent misrepresentation arising out of their purchase of a home. The trial court granted defendants' motion to dismiss (735 ILCS 5/2--615 (West 2000)) and found no just reason to delay enforcement or appeal of its order. 155 Ill. 2d R. 304(a). Plaintiffs appeal. We affirm in part, reverse in part, and remand the cause.

I. BACKGROUND

In 1998, plaintiffs moved from Ohio to Illinois and purchased a home in Bolingbrook. Brennan, a residential real estate brokerage company, and Clermont, a licensed real estate broker and one of Brennan's agents, represented the Bolingbrook property's sellers. Defendants' sales brochure for the Bolingbrook property listed as one of the home's features: "Acclaimed [school] District 204." Plaintiffs moved into the home, and their three children attended school in District 204 for three years. However, the children were unable to attend District 204 classes during the 2001-2002 academic year after plaintiffs discovered that their property was actually located in District 365-U. Plaintiffs subsequently sold the property and purchased another home. The new home was located in District 204.

On June 15, 2001, plaintiffs sued defendants. In their amended four-count complaint, plaintiffs asserted claims of common-law fraud, negligent misrepresentation, and violations of the Consumer Fraud Act and the Real Estate License Act.

In their Real Estate License Act count, plaintiffs alleged that Clermont's communications that the property was located in District 204 were false, untruthful, and misleading because, at all times, the property was located within District 365-U. Plaintiffs further alleged that the information did not come from the sellers because they had no children. The information was material because it was one of the major reasons plaintiffs purchased the property, and they would not have purchased it if they had known otherwise. Plaintiffs asserted that they were damaged as a result of Clermont's misleading representation because they purchased a home that they would not have otherwise purchased; they paid more for the property than it was worth; the property did not appreciate as much as it would have if it were within the boundaries of District 204; and they had to pay expenses associated with purchasing a new home.

In their Consumer Fraud Act count, plaintiffs additionally alleged that Clermont failed to check with any school districts or their employees regarding the home's school district. They further alleged that a property's school district is not a matter of public record. Plaintiffs asserted that, prior to their purchase, they conferred with District 204 employees and were informed that the property was located within District 204's boundaries.

Plaintiffs pleaded in their common-law fraud count that they relied upon Clermont's representations and that Clermont's statements were made with knowledge that the information was untrue or with reckless disregard of the truth. They asserted that it is widely known in the real estate industry that considerable misinformation exists regarding school district boundaries in Bolingbrook. Further, Clermont took no action to determine which district the property was located in, other than reviewing listings from previous sales. Clermont did not consult with District 204 employees, and she intended that plaintiffs rely on her claims. Plaintiffs reasonably relied on the false representations; they took reasonable steps to confirm Clermont's information and found no contradictory information.

In their negligent misrepresentation count, plaintiffs alleged that defendants owed a duty to them to use due care in obtaining and communicating information that they knew plaintiffs would rely upon in deciding whether to purchase the property. Further, defendants were negligent in marketing the property as located in District 204 when considerable misinformation exists about the area's district boundaries. Plaintiffs further alleged that Clermont intended that plaintiffs rely on her claims and plaintiffs reasonably relied on such.

On December 7, 2001, defendants moved to dismiss the complaint, arguing that plaintiffs' admission that they spoke to District 204 employees undermined their allegations that defendants knew or should have known that the property was not located in District 204 or that plaintiffs relied on defendants' representations. Further, defendants argued that plaintiffs did not adequately plead that defendants' actions proximately caused them damages. With respect to the Consumer Fraud Act count, defendants asserted that no liability can be found where the misrepresentations are discoverable by plaintiffs through the exercise of ordinary care. Rather, defendants must misrepresent facts of which they possess almost exclusive knowledge and the truth or falsity must not be readily ascertainable by plaintiffs. On the common-law fraud count, defendants responded that a misrepresentation concerning a matter of public knowledge could not support a cause of action against a realtor for common-law fraud. Moreover, given that plaintiffs independently confirmed the District 204 boundaries prior to the sale, they could not establish that they reasonably relied upon defendants' advertisement or that defendants proximately caused them damages.

Defendants further argued that plaintiffs did not adequately plead negligent misrepresentation because they did not plead any facts to support their claim that defendants knew or should have known that the property was not located within District 204. Moreover, even if defendants should have known about the true boundary, representations that concern matters of public knowledge cannot serve as the basis of a misrepresentation claim against a realtor in connection with the purchase or sale of real estate. Finally, because plaintiffs received essentially the same information from the District's employees prior to purchase, they did not plead the reliance element adequately to sustain the claim.

With respect to the Real Estate License Act claim, defendants responded that there is no reasonable basis to infer that defendants knew of the boundaries, where the school district itself was not aware of them.

On February 1, 2002, the trial court dismissed plaintiffs' amended complaint with prejudice. Plaintiffs appeal.

II. ANALYSIS

A. Standard of Review

A motion to dismiss under section 2--615 of the Code of Civil Procedure (735 ILCS 5/2--615 (West 2000)) challenges only the legal sufficiency of the complaint. Jarvis v. South Oak Dodge, Inc., 201 Ill. 2d 81, 85 (2002). The critical inquiry is whether the allegations of the complaint, when construed in the light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief may be granted. In making this determination, all well-pleaded facts in the complaint must be taken as true. Jarvis, 201 Ill. 2d at 86. We review de novo an order granting a section 2--615 motion to dismiss. Raintree Homes, Inc. v. Village of Long Grove, 335 Ill. App. 3d 317, 319 (2002).

B. Common-Law Fraud

Plaintiffs argue that they adequately pleaded common-law fraud. They alleged that defendants made an affirmative misrepresentation of a fact in their sales brochure and that plaintiffs justifiably relied on defendants' representation, notwithstanding the existence of any public records that would disclose the truth.

The elements of common-law fraud are: (1) a false statement of a material fact; (2) defendant's knowledge that the statement was false; (3) defendant's intent that the statement induce plaintiff to act; (4) plaintiff's reliance upon the truth of the statement; and (5) plaintiff's damages resulting from reliance on the statement. Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 496 (1996).

We conclude that plaintiffs pleaded no facts supporting their allegation that defendants knew that the statements about the school district were false. Because this failure is fatal to plaintiffs' common-law fraud claim, we do not address the other elements. Plaintiffs alleged in conclusory fashion that Clermont's statements were made with knowledge that the information was untrue. They also asserted that it is widely known in the real estate industry that considerable misinformation exists about school district boundaries in Bolingbrook and that Clermont took no action to determine which district the property was located in, other than reviewing prior listings from previous sales. Plaintiffs' allegations regarding the misinformation about Bolingbrook school districts are not facts from which a trier of fact could conclude that defendants knew that their statements were false. Estate of Johnson v. Condell Memorial ...


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