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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

Held [*]

In a “construction defect” action arising from the discovery of leaky doors, windows and ceilings in condominium units and common areas, the appellate court, in answer to two certified questions under Supreme Court Rule 308, stated that the relevant date for determining the insolvency of a general contractor for purposes of the exception in Minton allowing a subcontractor to be pursued when a general contractor is insolvent is the date a complaint or the latest amended complaint is filed against the general contractor, not the date construction was completed, and a condominium association may pursue a subcontractor when a general contractor is, as in the instant case, insolvent but in good standing with limited assets.

Appeal from the Circuit Court of Cook County, No. 08-L-014415; the Hon. Ronald F. Bartkowitz, Judge, presiding.

Joseph A. Bosco and Brian R. Kusper, both of LaRose & Bosco Ltd., of Chicago, for appellant.

Robert W. Brunner, of Law Office of Robert W. Brunner, of Chicago, for appellees.

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, 1324 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) (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 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 ...


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