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1324 W. Pratt Condominium Association v. Platt Construction Group, Inc.

Court of Appeals of Illinois, First District, Fourth Division

September 19, 2013

1324 W. PRATT CONDOMINIUM ASSOCIATION, Plaintiff-Appellee,
v.
PLATT CONSTRUCTION GROUP, INC., Defendant-Appellee (EZ Masonry, Inc., Defendant-Appellant)

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

JUSTICE FITZGERALD SMITH delivered the judgment of the court, with opinion. Presiding Justice Howse and Justice Lavin concurred in the judgment and opinion.

OPINION

FITZGERALD SMITH, JUSTICE

¶ 1 This is a construction defect lawsuit arising from the faulty construction of a residential condominium building built in 2005 at 1324 W. Pratt Boulevard, in Chicago, Illinois. The plaintiff-appellee, 1342 W. Pratt Condominium Association (hereinafter, the condominium association) seeks to recover damages from the general contractor, Platt-Construction Group, Inc. (hereinafter, Platt), and the masonry subcontractor, the defendant-appellant, EZ Masonry Inc., (hereinafter, EZ Masonry). This cause has already been before this appellate court twice. In this interlocutory appeal, we are asked to decide two questions of law certified by the circuit court pursuant to Illinois Supreme Court Rule 308 (Ill. S.Ct. R. 308 (eff. Feb. 26, 2010)): (1) "whether the relevant date for determining the insolvency of a general contractor [Platt] for purposes of the exception set forth in Minton v. Richard Group of Chicago[, 116 Ill.App.3d 852 (1983), ] is the date that a [c]omplaint (or latest amended complaint) is filed against the general contractor, or when the construction is completed; and (2) whether [the condominium association] may pursue [its] claims against EZ Masonry in this cause when Platt is insolvent, but is in good standing with limited assets." For the reasons that follow, we hold that the relevant date for determining the insolvency of a general contractor is not the date construction is completed but, rather, the date that an amended complaint is filed alleging the general contractor's insolvency, and that in this particular situation, the condominium association may proceed against EZ Masonry since Platt is insolvent.

¶ 2 I. BACKGROUND

¶ 3 Since this cause originated about a decade ago, and includes voluminous motion practice, for purposes of brevity we set forth only the relevant factual background and procedural history. 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 hired Platt as its general contractor, and Platt in turn hired several subcontractors, including relevant for this appeal, EZ Masonry. After Platt completed the building in March 2005, Wayne sold the individual eight units as condominiums. On November 28, 2005, Wayne was involuntarily dissolved.

¶ 4 Soon thereafter, the unit owners discovered water leaks around windows, doors, ceilings and vents in their units and common areas of the building. The owners of the individual units formed the plaintiff condominium association to represent their collective interests. Starting in 2008, the condominium association filed a series of complaints against several defendants, attempting to recover damages caused by the construction defects. The first complaint was filed against Wayne, Platt and the roofing subcontractor (which is not a party to this appeal). The second amended complaint was filed on December 14, 2009, and named EZ Masonry as a defendant. Since then, relevant to this appeal, the litigation has proceeded against both Platt and EZ Masonry on, inter alia, a breach of implied warranty of habitability claim.

¶ 5 On June 9, 2009, Platt filed a motion to dismiss pursuant to section 2-619 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2008)), arguing that it could not be held liable under an implied warranty of habitability theory because that warranty applies to only "builder-vendors, ", i.e., builders that not only construct a residential building but are also involved in the sale of the residence to the purchasers. The circuit court agreed with Platt and granted its motion to dismiss on September 11, 2009. The condominium association appealed, and on September 28, 2010, we reversed the order of the circuit court, ruling that "the warranty applies to builders of residential homes regardless of whether they are involved in the sale of the home." 1324 W. Pratt Condominium Ass'n v. Platt Construction Group, Inc., 404 Ill.App.3d 611, 618 (2010) (hereinafter Pratt I).[1]

¶ 6 After the cause was remanded to the circuit court, on December 20, 2010, the condominium association filed its third amended complaint alleging a breach of the implied warranty of habitability against, inter alia, Wayne, Platt and EZ Masonry. In January 2011, Platt and EZ Masonry both filed a motions to dismiss pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West 2008)). EZ Masonry argued that while the general contractor (Platt) was solvent, it was improper to bring a claim for the breach of the implied warranty of habitability against a subcontractor, such as itself. In support of this contention, EZ Masonry cited Minton v. Richards Group of Chicago, 116 Ill.App.3d 852 (1983). Platt argued that the individual condominium owners could not avail themselves of the implied warranty of habitability since they explicitly waived that warranty in their condominium purchase agreements. EZ Masonry orally joined in Platt's argument regarding waiver.

¶ 7 On May 19, 2011, the circuit court granted Platt's and EZ Masonry's motions to dismiss based upon the waiver of the implied warranty of habitability, but specifically denied EZ Masonry's claim that while Platt was solvent, the condominium association could not go forward with its claim against EZ Masonry. In doing so, the circuit court noted that Pratt I modified Minton and extended the implied warranty of habitability to subcontractors without the need to first show that the purchaser had no recourse to the builder and/or vendor.

¶ 8 The case was appealed again to this court. On June 21, 2012, we reversed the circuit court's decision, inter alia, holding that so long as Platt remained solvent, the condominium association could not proceed against EZ Masonry. 1324 W. Pratt Condominium Ass'n v. Platt Construction Group, Inc., 2012 IL App (1st) 111474 (hereinafter Pratt II). In doing so, we explicitly rejected the reasoning of the circuit court and reiterated that our decision in Pratt I nowhere extended or modified Minton to include all subcontractors, regardless of the solvency of the builder-vendor.

¶ 9 On remand to the circuit court, on January 8, 2013, the condominium association filed its fourth amended complaint against Pratt and EZ Masonry, again alleging a breach of the implied warranty of habitability. The allegations in the fourth amended complaint were identical to the allegations in the third amended complaint except for additional language asserting that Platt is insolvent. After limited discovery, on February 27, 2013, the circuit court held that "Platt is insolvent, but remains a corporation in good standing with limited assets." The circuit court also held that the relevant date for determining the insolvency of a general contractor such as Platt is the date on which a complaint is filed against the general contractor; in this case, the fourth amended complaint, which was filed on January 8, 2013. The circuit court then certified two questions of law for interlocutory appeal pursuant to Illinois Supreme Court Rule 308, finding that as there were "substantial grounds for difference of opinion" as to these two questions and that answers to those two questions by this appellate court could "materially advance the ultimate termination of litigation." Ill. S.Ct. R. 308 (eff. Feb. 26, 2010). As already noted above, the certified questions are as follows: (1) "whether the relevant date for determining the insolvency of a general contractor for purposes of the exception set forth in Minton v. Richard Group of Chicago[, 116 Ill.App.3d 852 (1983)] is the date that a [c]omplaint (or latest amended complaint) is filed against the general contractor, or when the construction is completed; and (2) whether [the condominium association] may pursue [its] claims against EZ Masonry in this cause when Platt *** is insolvent, but is in good standing with limited assets."

¶ 10 II. ANALYSIS

¶ 11 We begin by setting forth the scope of review that we must apply in all Rule 308 appeals. It is well settled that absent a statutory exception or rule of the supreme court, courts of appeal have jurisdiction to review only final judgments entered in the circuit court. Walker v. Carnival Cruise Lines, Inc., 383 Ill.App.3d 129, 133 (2008). Illinois Supreme Court Rule 308, however, provides one such exception and permits for permissive appeal of an interlocutory order certified by the trial court as involving a question of law as to which "there is substantial ground for difference of opinion" and "where an immediate appeal may materially advance the ultimate termination of the litigation." Ill. S.Ct. R. 308 (eff. Feb. 26, 2010); In re Estate of Luccio 2012 IL App (1st) 121153 ¶ 17 (citing Brookbank v. Olson, 389 Ill.App.3d 683, 685 (2009)). However, this rule is not intended to be a mechanism for expedited review of an order that merely applies the law to the facts of a particular case. In re Estate of Luccio, 2012 IL App (1st) 121153, ¶ 17; see also Walker, 383 Ill.App.3d at 133; Morrissey v. City of Chicago, 334 Ill.App.3d 251, 258 (2002). Nor does it permit us to review the propriety of the order entered by the lower court. In re Estate of Luccio, 2012 IL App (1st) 121153, ¶ 17; see also Walker, 383 Ill.App.3d at 133. Rather, we are limited to answering the specific question certified by the trial court. Moore v. Chicago Park District, 2012 IL 112788, ¶ 9; see also Bajalo v. Northwestern University, 369 Ill.App.3d 576, 580 (2006) ("In [a Rule 308] interlocutory appeal, the court's examination is limited to the ...


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