United States District Court, N.D. Illinois, Eastern Division
May 16, 2005.
SHELLY HARTWICK, Plaintiff/Appellant,
GEORGE CRAIG, Defendant/Appellee.
The opinion of the court was delivered by: JAMES MORAN, Senior District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff purchased a house from defendant, soon was
dissatisfied with it, and sued to rescind the transaction and for
damages, claiming that she had been defrauded. Craig filed for
bankruptcy protection and Hartwick filed an adversary complaint,
claiming that defendant was indebted to her because of the fraud,
and that the debt was non-dischargeable.*fn1 Bankruptcy
Judge Goldgar ruled against her after two days of testimony and
consideration of numerous exhibits. She appeals, and we affirm.
Most of plaintiff's efforts are to attack the judge's
credibility determinations. As we advised her before she embarked
on the endeavor, that is a daunting task. Our standard of review
is whether the determinations are clearly erroneous. Judge
Goldgar wrote a thorough and careful 33-page opinion. He credited
some witnesses and, more particularly, discounted much of
plaintiff's testimony. We are unable to comment on the latter
because she did not include her own testimony in the record. We
accept, therefore, his credibility determinations regarding her
testimony. In view of plaintiff's pro se status, we have
carefully reviewed everything she has presented, whether or not it is relevant or
was even presented to the bankruptcy court. What emerges is a
scenario as described by Judge Goldgar a scenario well
supported by the record.
Defendant and his wife rented the "cottage" in 1997, and
purchased it in 1998. It was rundown when they purchased it, and
particularly after the purchase they engaged in a number of
rehabilitation projects.*fn2 At the time of the sale, the
house was almost 70 years old. It had been added to ("jack
built") without regard to any update of the heating system; had
settled so as to have obvious slanting of floors, indicating a
foundation problem; had an antiquated electrical system; and,
among other things, needed three space heaters for adequate heat.
Defendant did not list these as material defects, conditions that
would have a substantial adverse effect on value, and Judge
Goldgar concluded that defendant violated the Illinois
Residential Real Property Disclosure Act (RRPDA), 765 ILCS 77/1
et seq. (2000), and that there was therefore a debt. But he
further concluded that defendant, in good faith, did not consider
these to be defects, he had lived with them for years the space
heaters provided adequate heat, one just had to be careful not to
overload a circuit and blow a fuse, and there had been no further
settling after they moved in. None raised substantial safety
concerns and they were used to all of them. Moreover, the major
ones were obvious; plaintiff was aware of the slanting floors and
had to have been aware of the wiring system and the space
heaters. She did not justifiably rely on any failure to disclose.
Indeed, her real estate agent, Jose Resto, specifically counseled
against her purchasing the house because of the "red flags,"
which he thought made the house unsuitable for a single woman with
Plaintiff attacks the credibility of her realtor, Jose Resto,
because of what she believes are inconsistencies in his
testimony. But Judge Goldgar observed the witness and heard the
witness' testimony, and that testimony was not inherently
incredible. Moreover, his decision did not turn on that
testimony. He concluded that Craig did not intentionally make
disclosures he knew to be untrue and that plaintiff did not
justifiably rely on those disclosures. Rather, "[t]he house's
problems were so numerous and so obvious they render irrelevant
any misrepresentations or omissions Craig may have made. . . .
Not only were the problems with the house readily apparent, they
were readily apparent to Hartwick." She also attacks the
credibility of Craig. Again, Judge Goldgar observed the witness
and heard his testimony, and that testimony was not inherently
incredible. As we have previously noted, the evidence supports
the scenario described by the bankruptcy judge. Again, his
decision did not turn on that testimony, as that testimony only
marginally related to whether or not plaintiff justifiably
A third contention is that Roy Guerra, an electrical contractor
plaintiff had look at the house, could have testified that Craig
was intending to seek bankruptcy protection if sued by plaintiff.
Guerra was not, however, even asked the question Judge Goldgar
never excluded any such testimony. Further, as we previously
noted, there was nothing improper about seeking that protection.
Finally, plaintiff seeks a new trial because the record
indicates that Judge Goldgar prohibited Craig from testifying as
a sanction for failure to file a trial brief, and, she says,
there is no record that it was ever lifted. The sanctions order
was entered June 29, 2004. Craig's trial brief was filed the
following day and the sanction as to Craig was lifted. The sanctions order also prohibited Hartwick from pursuing her fraud
claim against Craig for failure to file a trial brief relating to
that issue. Although the record does not reflect that sanction as
lifted, an amended trial brief was filed by plaintiff's counsel
on June 30, 2004, and the hearing proceeded on the fraud issue.
Indeed, that is what this appeal is all about. The motion for a
new trial is denied.