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Norma M. Duffy v. Orlan Brook Condominium Owners

November 30, 2012

NORMA M. DUFFY,
PLAINTIFF-APPELLANT,
v.
ORLAN BROOK CONDOMINIUM OWNERS' ASSOCIATION, AND UNKNOWN INDIVIDUAL BOARD MEMBERS OF THE ORLAN BROOK CONDOMINIUM OWNERS' ASSOCIATION, INDIVIDUALLY,
DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. No. 10 L 3467 The Honorable Kathy Flanagan, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Lampkin

PRESIDING JUSTICE LAMPKIN delivered the judgment of the court, with opinion. Justices Hall and Garcia concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiff, Norma Duffy, appeals the circuit court's order granting the dismissal of her fourth amended complaint in favor of defendants, Orlan Brook Condominium Owners' Association (condo association) and unknown members of the Orlan Brook Condominium Owners' Association, individually (board members). Plaintiff contends her fourth amended complaint adequately pled causes of action for breach of fiduciary duty, constructive fraud, intentional infliction of emotional distress, and, in the alternative, negligent infliction of emotional distress. Based on the following, we affirm in part, reverse in part, and remand for further proceedings.

¶ 2 FACTS

¶ 3 On March 19, 2010, plaintiff filed a four-count complaint for damages and a declaratory judgment against the condo association and her insurer, State Farm Insurance Company (State Farm), alleging breach of fiduciary duty, intentional and negligent infliction of emotional distress, and constructive fraud against the condo association, and seeking a declaratory judgment against State Farm. The condo association and State Farm filed a motion to dismiss pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2008)). Prior to any ruling on the motion, plaintiff obtained leave to file a first amended complaint and withdrew State Farm as a named defendant.

¶ 4 On October 12, 2010, plaintiff filed a first amended complaint against defendants, alleging breach of fiduciary duty, intentional and negligent infliction of emotional distress, and constructive fraud. Defendants filed a section 2-615 motion to dismiss, alleging plaintiff failed to plead sufficient facts to establish her claims. The circuit court granted the motion to dismiss, finding plaintiff's allegations were conclusory and lacking in the specific facts necessary to support each element of each cause of action. Plaintiff was granted leave to amend.

¶ 5 On February 8, 2011, plaintiff filed a second amended complaint, alleging breach of fiduciary duty and intentional and negligent infliction of emotional distress. Defendants again filed a section 2-615 motion to dismiss, arguing that plaintiff failed to plead facts to support her claims and arguing that she could not state a claim for breach of fiduciary duty based on the business judgment rule. The circuit court granted defendants' motion to dismiss, finding the second amended complaint "continues to be wholly conclusory and lacking in specific, relevant facts necessary to support each element of each cause of action set forth." Plaintiff was granted leave to amend.

¶ 6 On June 3, 2011, plaintiff filed a third amended complaint, realleging breach of fiduciary duty and intentional and negligent infliction of emotional distress. Defendants filed a section 2-615 motion to dismiss, arguing that plaintiff failed to cure the defects in her prior complaints. The circuit court dismissed the complaint, but gave plaintiff another opportunity to amend.

¶ 7 On August 15, 2011, plaintiff filed a fourth amended complaint, the subject of which underlies the instant appeal. In that complaint, plaintiff again alleged breach of fiduciary duty and intentional and negligent infliction of emotional distress. The following facts were obtained from the complaint.

¶ 8 Plaintiff became the owner of a condominium within the condo association on March 31, 1998, and resided there continuously until early October 2009. The condo association was organized as a not-for-profit corporation and was governed by the "Declaration of Condominium Ownership and of Easements, Restrictions and Covenants" (declarations).

¶ 9 In May 2009, plaintiff informed defendants that her unit was damaged and that "there was settlement of the slab and failure of walls." Plaintiff alleged the damage was caused by the settlement of the soil beneath and around her unit. Plaintiff further alleged the soil under her unit, as well as the foundation, slab, walls, and ceiling of her unit were common elements, which it was defendants' duty to manage and maintain. In a letter dated May 18, 2009, defendants informed plaintiff that the cost to repair the common elements causing damage to her unit would be the responsibility of defendants. In a letter dated September 18, 2009, plaintiff was informed that she needed to move all of her personal property and possessions out of her unit prior to the start of the repair work scheduled to begin October 5, 2009. According to the complaint, "plaintiff complied, relocated to another residence, and moved her personal property and possessions out of her unit."

¶ 10 The complaint further provided that the condo association "failed to take any action to properly make repairs." However, the condo association removed "the carpeting, utilities, cabinets, and other furnishings such that Plaintiff's unit was completely stripped and the walls and floor barren, rendering Plaintiff's unit uninhabitable." Plaintiff alleged that defendants solicited bids for the work as late as February and April 2010 and did not begin work inside her unit until the fall of 2010. Moreover, the complaint alleged "Defendants had actual knowledge that the interior work undertaken by Defendants would not remedy the existing, dangerous condition of the exterior wall subsidence" and "to date, Defendants have not resolved or repaired the footing, foundation, or subsidence that continues to damage Plaintiff's unit."

¶ 11 The complaint detailed the four allegations, namely, breach of fiduciary duty against the individual board members, breach of fiduciary duty against the condo association, intentional infliction of emotional distress against defendants, and, in the alternative, negligent infliction of emotional distress against defendants.

¶ 12 Defendants again filed a section 2-615 motion to dismiss. The circuit court granted the motion, finding the allegations "continue to lack specific, relevant facts necessary to support each element of each cause of action set forth." The circuit court granted plaintiff leave for "one last and final opportunity" to amend the complaint. On November 1, 2011, the circuit court entered an order indicating plaintiff's choice to stand on her complaint and dismissed the fourth amended complaint with prejudice. This appeal followed.

¶ 13 DECISION

¶ 14 A section 2-615 motion to dismiss challenges the legal sufficiency of the complaint based on defects apparent on its face. Doe-3 v. McLean County Unit District No. 5 Board of Directors, 2012 IL 112479, ¶ 15. In reviewing a section 2-615 dismissal motion, the relevant question is whether, taking all well-pleaded facts as true, the allegations in the complaint, construed in a light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief may be granted. Id. ¶ 16. A court should grant a section 2-615 dismissal only where no set of facts can be proved entitling the plaintiff to recovery. Id. A plaintiff, however, may not rely on factual or legal conclusions that are not supported by factual allegations. Davis v. Dyson, 387 Ill. App. 3d 676, 682 (2008). We review the dismissal of a complaint de novo. Doe-3, 2012 IL 112479,

¶ 15.

¶ 15 I. Breach of Fiduciary Duty

¶ 16 Plaintiff contends her fourth amended complaint sufficiently pled a cause of action for breach of fiduciary duty against the condo association and the board members for acts and omissions in violation of the condominium declarations and bylaws, in that they failed to maintain and repair the common elements, thereby proximately causing her damages. We recognize that plaintiff pled separate counts of breach of fiduciary duty against the condo association and the board members; however, we address the counts in combination as the allegations in the complaint are nearly identical.

¶ 17 To state a claim for breach of fiduciary duty, a plaintiff must allege the existence of a fiduciary duty, the breach of that duty, and damages proximately caused therefrom. Neade v. Portes, 193 Ill. 2d 433, 444 (2000).

¶ 18 Pursuant to section 18.4 of the Condominium Property Act (Condo Act), the board of managers has the duty to "provide for the operation, care, upkeep, maintenance, replacement and improvement of the common elements" of a condominium building. 765 ILCS 605/18.4(a) (West 2008). The Condo Act further provides that board members owe the individual unit owners a fiduciary duty. 765 ILCS 605/18.4 (West 2008) ("[i]n the performance of their duties, the officers and members of the board *** shall exercise the care required of a fiduciary of the unit owners"). The condominium association is similarly required to exercise a fiduciary duty toward the individual unit owners. La Salle National Trust, N.A. v. Board of Directors of the 1100 Lake Shore Drive Condominium, 287 Ill. App. 3d 449, 454 (1997). Therefore, the condominium association and its board members are required to "act in a manner reasonably related to the exercise of that duty and the failure to do so results in liability for the board and its individual members." Goldberg v. Astor Plaza Condominium Ass'n, 2012 IL App (1st) 110620, ¶ 62.

¶ 19 Defendants concede that they owed plaintiff a fiduciary duty to provide for the operation, care, upkeep, maintenance, replacement, and improvement of the common elements. We, therefore, turn to the question of breach. Plaintiff argues she presented sufficient facts demonstrating that defendants breached their fiduciary duty. Defendants respond that plaintiff failed to establish facts demonstrating their decisions regarding the repair work were not a valid exercise of the business judgment rule and, therefore, do not constitute a breach of their fiduciary duty.

¶ 20 In her fourth amended complaint, plaintiff alleged, in relevant part, the following:

"From May 2009 until the date of the filing hereof, Plaintiff continues to suffer damage to her unit from the settling and subsidence of the common elements.

The alleged repairs undertaken by Defendants in late 2010 were cosmetic only and failed to remedy the underlying settling and subsidence of the common elements. ***

Defendants delayed[,] failed[,] and only completed minimal cosmetic repairs and continued to refuse to remedy a known, existing, and ...


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