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Harrison Wells Partners, LLC v. Chieftain Construction

August 25, 2010

HARRISON WELLS PARTNERS, LLC, PLAINTIFF,
v.
CHIEFTAIN CONSTRUCTION, LTD., DEFENDANT.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge

MEMORANDUM OPINION AND ORDER

Harrison Wells Partners, LLC has sued Chieftain Construction Holdings, Ltd. for breach of contract and fraud in connection with a real estate purchase agreement ("the Agreement") the parties entered into in February 2008. Chieftain has counterclaimed, alleging breach of the same agreement. The Court has jurisdiction based on diversity of citizenship.

On February 24, 2010, Harrison Wells voluntarily dismissed its fraud claim with prejudice. Harrison Wells has moved for summary judgment on its breach of contract claim and Chieftain's counterclaim. The Court presumes familiarity with its prior decision in this case. See Harrison Wells Partners, LLC v. Chieftain Constr. Holdings, Ltd., No. 09-2445, 2009 WL 3010847, at *1 (N.D. Ill. Sept. 16, 2009). Any additional facts that are relevant to the case are discussed in the legal analysis that follows.

Discussion

Summary judgment is appropriate if "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). To determine whether a genuine issue of material fact exists, the Court must view the record in the light most favorable to the nonmoving party and draw reasonable inferences in that party's favor. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986); AA Sales & Assocs., Inc. v. Coni-Seal, Inc., 550 F. 3d 605, 609 (7th Cir. 2008). A genuine issue of material fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.

Chieftain claims that Harrison Wells breached the Agreement when the market value of the property fell below the price the parties negotiated and agreed upon. The parties also dispute whether a fence properly enclosed the property, which is an open lot, as required by a Chicago ordinance. Finally, Harrison Wells alleges that Chieftain breached the Agreement by failing to make the required "advanced carrying cost deposit" ("the deposit") on March 1, 2009. Chieftain contends it did not breach the Agreement because, by March 1, 2009, it had terminated the Agreement and was no longer required to make the deposit.

The parties' arguments depend on the meaning of certain terms in the Agreement. The Court must, therefore, construe the meaning of words in the contract in a manner consistent with Illinois rules of contract interpretation.

A. Disputed Terms in the Agreement

The Agreement provides for the purchase and sale of a parcel of land located at the southwest corner of Harrison and Wells Streets. Chieftain promised to purchase the property "[as is]... in its condition... subject to reasonable use, wear, tear and natural deterioration." Pl.'s L.R. 56.1 Stat., Ex. 2 at 10. The Agreement also provides that

Purchaser hereby fully and irrevocably releases Seller and its agents and representatives from any and all claims Purchaser may now have or hereafter acquire against Seller or its agents or representatives for any cost, loss, liability, expense, damage, action or cause of action arising from or relating to the condition of the Property... except for claims based upon the representations and warranties of Seller set forth in this Agreement.

Id.

The parties dispute the meaning of the following provisions of the Agreement:

Additional Conditions

Without limitation of any other provisions of this Agreement, it shall be a condition of Purchaser's obligation to consummate the transaction hereunder that...

(b) the Property shall be in the same condition as exists as of the date of this Agreement (subject to reasonable use, wear, tear and natural deterioration of the Property between the date hereof and the Closing Date and to any acts of Purchaser or its officers, employees, agents, contractors or consultants thereon)

...

Representations and Warranties

(a) Seller hereby represents and warrants to Purchaser now, and remakes such representations and warranties to ...


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