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W. Pratt Condominium Association v. Platt Construction Group

June 21, 2012

W. PRATT CONDOMINIUM ASSOCIATION, PLAINTIFF-APPELLANT,
v.
PLATT CONSTRUCTION GROUP, INC.,
DEFENDANT-APPELLEE EZ MASONRY, INC.,
DEFENDANT-APPELLEE AND CROSS-APPELLANT.



Appeal from the Circuit Court of Cook County, Illinois, County Department, Law Division. No. 08 L 014415 Honorable Ronald F. Bartkowitz, Judge Presiding.

The opinion of the court was delivered by: Justice Fitzgerald Smith

JUSTICE FITZGERALD SMITH delivered the judgment of the court, with opinion.

Presiding Justice Lavin and Justice Sterba concurred in the judgment and opinion.

OPINION

¶ 1 This is an appeal from the circuit court's order granting a motion to dismiss pursuant to section 2-619(a)(9) of the Illinois Code of Civil Procedure (735 ILCS 5/2-619 (West 2008)) in favor of the defendant, Platt Construction Group, Inc. (hereinafter, Platt), and the defendant, cross-appellant, EZ Masonry, Inc. (hereinafter, EZ Masonry), in an action by the plaintiff, 1324 W. Pratt Condominium Association (hereinafter the condominium association), to recover damages arising from faulty construction of a residential building under a breach of the implied warranty of habitability claim. The condominium association contends that the circuit court erred in finding that it disclaimed the implied warranty of habitability as to Platt and EZ Masonry and asks that we find the warranty applicable to both of the defendants. For the reasons that follow, we agree with the plaintiff and reverse the judgment of the circuit court.

¶ 2 I. BACKGROUND

¶ 3 The record reveals the following relevant and undisputed facts. Between 2004 and 2005, the developer, 6801 N. Wayne LLC (hereinafter, Wayne), engaged in the construction of an eight-unit residential building located at 1324 W. Pratt Boulevard in Chicago, Illinois (hereinafter, the building). In order to construct the building, Wayne entered into a contract with Platt, under which Platt was hired to act as the general contractor for the project and was responsible for the overall construction of the building. In turn, Platt subcontracted the masonry work on the building to EZ Masonry.

¶ 4 After Platt completed the building in March 2005, Wayne sold the individual eight units as condominiums, by entering into a real estate contract with each of the individual condominium unit owners. Platt and EZ Masonry never entered into any direct contracts with the owners. The record contains a copy of what the parties agree is a representative contract of all the contracts entered into by Wayne with the individual unit owners. Paragraph 10 of that contract is entitled "Homeowner's Limited Warranty" and provides the individual unit owners with a one-year limited warranty for certain structural components in the units. Under the contract this one-year limited warranty expired a year after the date of closing or sometime in March 2006. Section (b) of paragraph 10, however, explicitly provides a disclaimer of the implied warranty of habitability. That section states in pertinent part:

"(b) IMPLIED WARRANTY OF HABITABILITY

Illinois law provides that every contract for construction of a new home, as here, carries with it a warranty that when completed, the new home will be free of defects and will be fit for its intended use as a home. This law further provides that this Implied Warranty does not have to be in writing to be a part of the contract and it covers not only structural and mechanical defects such as may be found in the foundation, roof, masonry, heating, electrical and plumbing, but it also covers any defect in workmanship which may not easily be seen by the Purchaser. However, the law also provides that Seller and Purchaser may agree in writing, as here, that this Implied Warranty is not included as part of their particular contract.

(c) WAIVER-DISCLAIMER. THE SELLER HEREBY DISCLAIMS AND THE PURCHASER HEREBY WAIVES THE IMPLIED WARRANTY OF HABITABILITY DESCRIBED IN PARAGRAPH 10(B) ABOVE AND THEY ACKNOWLEDGE, UNDERSTAND AND AGREE THAT IT IS NOT PART OF THE CONTRACT.

(d) Effective [sic] and Consequences of this Waiver-Disclaimer. Purchaser acknowledges and understands that if a dispute arises with Seller and the dispute results in a lawsuit, Purchaser will not be able to rely on the Implied Warranty of Habitability described above, as a basis for suing the Seller or as a basis of a defense if Seller sues the Purchaser." (Emphases in original.)

¶ 5 For reasons not disclosed in the record, Wayne was involuntarily dissolved on November 28, 2005. Soon thereafter, the unit owners discovered water leaks around windows, doors, ceilings and vents in their units and common areas of the building.

¶ 6 The owners of the individual units formed the plaintiff condominium association in order to represent their collective interests. On December 31, 2008, the condominium association filed its original complaint against Wayne, Platt, and a roofing contractor (Kelly Roofing, Inc.), which is not a party to the instant appeal. The complaint alleged that leaks in the building had damaged not only the physical structure of the building but also the unit owners' personal property, such as furniture and books. Moreover, the complaint alleged that the water seeped into the walls, causing mold to grow throughout the building and resulting in medical problems to some of the unit owners, such as worsening asthma and flu-like symptoms. The condominium association retained a property inspector, who determined that the leaks were due to a faulty roof and other construction anomalies.

¶ 7 According to the complaint, the condominium association sent a letter to Platt advising it of the leaks. Based on the property inspector's finding that Platt was responsible for the defects, the condominium association requested that Platt repair the defects.*fn1 Platt never responded to the letter. The condominium association subsequently attempted to contact Platt on numerous occasions, again requesting that Platt repair the defects but Platt continued to ignore these requests.

¶ 8 The complaint further alleged that in September 2008, the Chicago area experienced a series of severe rainstorms, which substantially worsened the leaks in the building and exacerbated the mold problem. As a result, the condominium association incurred significant costs in repairing the leaks and removing the mold from the building.

¶ 9 The original complaint asserted numerous causes of action related to the allegedly faulty construction of the building. Four counts were directed against Platt, alleging: (1) negligence; (2) breach of the implied warranty of good workmanship; (3) breach of the implied warranty of habitability: and (4) breach of contract under a third-party beneficiary theory. The condominium association sought damages for repairs to the building itself, common areas, and individual units, as well as inspection and assessment costs for engineering and other construction expenses.

¶ 10 On April 7, 2009, Platt filed a motion to dismiss pursuant to section 2-615 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2008)) alleging that the original complaint was confusing and overly broad and failed to contain a "plain and concise statement" of the cause of action as required by section 2-603 of the Code (735 ILCS 5/2-603 (West 2008)). In response, the condominium association filed its first amended complaint, reasserting its original allegations in a more orderly fashion.

ΒΆ 11 On June 9, 2009, Platt filed a motion to dismiss all four counts against it under section 2-619(a)(9) of the Code (735 ILCS 5/2-619(a)(9) (West 2008)). Among other things, Platt argued that it could not be held liable under an implied warranty of habitability theory because the implied warranty applies to "builder-vendors," i.e., builders that not only construct a residential building but that are also involved in the sale of the residence to a purchaser. The condominium association responded that the implied warranty of ...


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