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Michael J. Gagnon v. Deborah Schickel

December 21, 2012

MICHAEL J. GAGNON,
PLAINTIFF-APPELLANT,
v.
DEBORAH SCHICKEL, DEFENDANT-APPELLEE, AND MICHAEL J. LAIRD AND MARK ILES, JR.,
DEFENDANTS.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY No. 08 CH 37052 HONORABLE MARTIN S. AGRAN, JUDGE, PRESIDING.

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

PRESIDING JUSTICE HOFFMAN delivered the judgment of the court, with opinion. Justices Cunningham and Delort concurred in the judgment and opinion.

OPINION

¶ 1 The plaintiff, Michael Gagnon, appeals from the trial court's judgment finding in favor of the appellee, Deborah Schickel, on several counts of his 15-count complaint against her and two other defendants, Michael Laird and Mark Iles, Jr.*fn1 , who are not parties to this appeal. On appeal, the plaintiff argues that the trial court erred in dismissing three of the counts of his complaint prior to trial and in finding in favor of Schickel on three additional counts following trial. For the reasons that follow, we affirm the trial court's dismissal of the first three counts of the plaintiff's complaint, but we reverse the trial court's rejection of three additional claims following a trial. We remand the cause with directions for the trial court to make further findings in accordance with the views expressed herein, and to order damages as appropriate.

¶ 2 The plaintiff filed his amended complaint in May 2005. In that complaint, the plaintiff alleged that he and Schickel agreed in 2004 to purchase a Tinley Park house together, and to share the attendant costs and profits. The plaintiff alleged that he contributed his portion of the purchase price and that he thereafter paid for a portion of the utilities, taxes, and improvements. However, despite her assurances that she would file a quitclaim deed conferring upon him a one-half interest in the Tinley Park property, Schickel never filed that deed; instead, she remained the sole record owner of the Tinley Park property. In December 2006, Schickel learned that the plaintiff intended to purchase investment property in Bourbonnais. The complaint averred that she "demanded *** that she be put on the title as a co-owner, because, in her words, 'we are doing real estate together.'" Based on his belief that the appellee had filed the quitclaim deed for the Tinley Park property naming him as a co-owner, the plaintiff acceded to Schickel's demand. The complaint alleged that, thereafter, the plaintiff paid all of the expenses related to the Bourbonais property, including mortgage payments, taxes, appliances, and improvements, and he received all of the rental income that the property produced.

¶ 3 The complaint stated that, in 2008, the parties' personal relationship soured, and Schickel thereafter denied that the plaintiff had any interest in the Tinley Park property. It was only then, the plaintiff alleged, that he learned that Schickel never conveyed a one-half interest in the property to him.

¶ 4 Based on the above allegations, the plaintiff brought claims against Schickel seeking recoupment of money he had contributed to the properties, an order compelling Schickel to convey to him a one-half interest in the Tinley Park property, and an order compelling Schickel to relinquish any interest in the Bourbonnais property. For the remedies relating to the Tinley Park property, the plaintiff asserted claims for declaratory judgment (Count I), specific performance (Count II), unjust enrichment (Count III), breach of contract (Count V), breach of fiduciary duty (Count VI), promissory estoppel (Count VII), equitable estoppel (Count VIII), common law fraud (Count IX), constructive trust (Count X), and recission of his gift (i.e., his contribution to the purchase price) to Schickel (Count XI). With respect to the Bourbonnais property, the plaintiff asserted a cause of action based on unjust enrichment (Count IV), contending that it would be unjust to allow Schickel to retain her interest in the Bourbonnais property, because the plaintiff conveyed it to her, and paid all the expenses related to the property, based on his belief that he shared ownership of the Tinley Park property. The plaintiff also sought replevin of personal property left at the Tinley Park residence (Count XII). The remaining three counts of the complaint alleged malpractice or negligence against Laird, an attorney involved in the transactions (Counts XIII and XV), and Iles, a mortgage broker involved in the transactions (Count XIV). Those latter three counts were dismissed before trial.

¶ 5 Count I, which asserted a claim for declaratory relief against Schickel, sought declarations that (1) the parties had entered into a joint venture and oral agreement to purchase the Tinley Park property together, to acquire a 50% interest in the property, and share the associated costs of maintaining the property and the profits from the appreciation of the property; (2) Schickel breached the terms of their oral agreement by failing to record the quitclaim deed; and (3) Schickel is bound by the terms of the joint venture and the agreement to sign the quitclaim deed, and have it recorded with the Cook County Recorder of Deeds.

¶ 6 Count II sought a judgment requiring Schickel to specifically perform under the terms of the oral agreement and joint venture with respect to the Tinley Park property. The complaint requested that the circuit court order Schickel to sign the quitclaim deed and have it recorded immediately with the Cook County Recorder of Deeds. In addition, the plaintiff requested injunctive relief prohibiting respondent from acting inconsistently with the terms of the agreement.

¶ 7 Count III alleged, in the alternative, that Schickel was unjustly enriched by the sole ownership of the Tinley Park property. It asserted that during the closing of that property, Schickel received a gift from the plaintiff in the amount of $147, 250, which was conditioned on her signing a quitclaim deed conveying 50% ownership of the Tinley Park property to the plaintiff within 30 days of closing and recording it with the Cook County Recorder of Deeds. The plaintiff alleged that he paid for the gas and telephone bills related to the Tinley Park property, as well as improvements and remodeling in excess of $37,000; one-half of the real estate taxes, estimated at $5,300 annually; and that he spent more than 2,700 hours working on the Tinley Park property improvements and remodeling. Count III further alleged that Schickel obtained a $75,000 line of credit and used the Tinley Park property as collateral. Moreover, the plaintiff claimed that the Tinley Park property is valued at least at $350,000 and that Schickel was unjustly enriched by retaining the benefits of the plaintiff's contributions, monetary and otherwise.

¶ 8 Pursuant to Schickel's motion, the trial court dismissed counts I, II, III, V, VI, VIII, and XI of the complaint. In dismissing count I, the trial court concluded that the plaintiff failed to adequately plead the elements necessary to show the parties' intent to form a joint venture. The court further found that the gift letter, which was attached as an exhibit to the complaint, directly contradicted, and therefore defeated, the plaintiff's claim alleging that the $147, 250 he gave to Schickel was a conditional gift.

¶ 9 With regard to count II, the trial court ruled that the plaintiff's claim for specific performance of the alleged oral contract must be dismissed because the statute of frauds precludes enforcement of a contract for the sale of land without a signed, written contract. The court also concluded, that even if the contract were enforceable, the plaintiff did not satisfy his obligation under the contract, because the $147,250 was not given in exchange for an ownership interest in the property or any obligation of repayment, as demonstrated by the gift letter that was attached as an exhibit to the complaint.

¶ 10 Lastly, Count III was dismissed based on the trial court's determination that the theory of unjust enrichment can apply only to a contract implied in law. Therefore, the court held that the claim for unjust enrichment could not proceed where the plaintiff simultaneously alleged the parties had an express oral agreement.

¶ 11 The circuit court also initially dismissed Count IV, on the basis that an unjust enrichment theory asserts the existence of a quasi-contractual relationship, which cannot exist where there is an actual contract. The court reasoned that the mortgage and title documents reflecting Schickel's ownership constituted such an actual contract. However, in response to Schickel's motion to reconsider, the court conceded that the dismissal had been improper, and it reinstated Count IV. The cause proceeded to trial on Counts IV, VII, IX, X, and XII.

¶ 12 In his trial testimony, the plaintiff explained that he contributed to the purchase of the Tinley Park home with the expectation that Schickel would file a quitclaim deed conveying a one-half interest to him. In fact, he testified, she agreed to do so, assured him after the purchase that she would do so, but in actuality never did. He also described improvements he had made to the Tinley Park residence. He further explained that he purchased the Bourbonnais property with his own money, but allowed Schickel to have a one-half ownership interest, because she told him that they were "doing real estate together." He stated that he paid all expenses relating to the Bourbonnais property. For her part, Schickel testified that the plaintiff agreed to allow her to retain full ownership of the Tinley Park property as a way to assuage her concern that joint ownership might complicate any breakup of their volatile relationship. She also said that the parties reached an agreement to have the plaintiff pay for the Bourbonnais property but to share ownership.

¶ 13 In a memorandum decision following the trial, the circuit court granted the plaintiff a judgment based on promissory estoppel (Count VII), premised on a finding that the plaintiff helped purchase the Tinley Park property in reliance on a promise that he would be given an equal ownership share. The court found in Schickel's favor on the plaintiff's claims of unjust enrichment (Count IV) and common-law fraud (Count IX), and it rejected the plaintiff's requests for a constructive trust (Count X) or for replevin (Count XII).

ΒΆ 14 The court rejected the unjust enrichment claim for the same reasons it had initially dismissed the claim: it reasoned that the existence of an actual contract (the mortgage and deed relating to the Bourbonnais property) precluded a cause of action for unjust enrichment, which is a quasi-contractual remedy. With respect to the common-law fraud claim, the court concluded that promissory fraud "is not actionable in Illinois unless the promise is part of a scheme to defraud." The court found that Schickel "promised to quit claim one half of the Tinley Park property to Plaintiff" but "never intended to do so," and held that "[t]his meets the definition of promissory fraud" and thus that ...


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