JOHN CHIURATO, DENNIS CORBIN, and MICHELE CIONI, Plaintiffs-Appellants,
DAYTON ESTATES DAM & WATER COMPANY, an Illinois not-for-profit Corporation; JOSEPH NAVARRO; WENDY NAVARRO; ROBERT POTUSNA; THOMAS GROSS; KAY GROSS; KEVIN CLEARY; JANICE CLEARY; KEN BRUNS; SUSAN BRUNS; DREW FERRACUTI; LISA FERRACUTI; MARGARET NEVIN; ROBERT NEVIN; FRANK LESS; SUE LESS; RYAN REYNOLDS; ELIZABETH REYNOLDS; TOM MARATEA; LISA MARATEA; JOHN POLEN; LYNN POLEN; LINOLA TOTEL; DON & MICHELLE VRTIS; MAURICE & SUE JOHNSON; LAWRENCE POWELL; ARMELLA OLSEN; DWAYNE DAVIS; ARTURO & RUTH THOMAS; HENDRICK & LAVERNE DeGELDER; ROBERT & DIANE SOLBERG; SCOTT & MELISSA TRAVI; TERRY & JONI ANDERSON; KEITH & PAT SEVERSON; LUKE & KATHY CARUSO; WILLIAM AHLFIELD; CHRISTOPHER ANDREE and CHARISSA ANDREE, Defendants, (Dayton Estates Dam & Water Company, Joseph Navarro, Robert Potusna, Thomas Gross, Kevin Cleary, Ken Bruns, Drew Ferracuti, Margaret Nevin, Frank Less, Ryan Reynolds, Tom Maratea, and John Polen, Defendants-Appellees).
from the Circuit Court of the 13th Judicial Circuit, La Salle
County, Illinois. Circuit No. 09-CH-161 Honorable Robert C.
Marsaglia, Judge, Presiding.
JUSTICE LYTTON delivered the judgment of the court, with
opinion. Justices O'Brien and Wright concurred in the
judgment and opinion.
1 Plaintiffs John Chiurato, Dennis Corbin, and Michele Cioni
are homeowners in a residential community known as Dayton
Estates. Defendant, Dayton Estates Dam & Water Company,
is a not-for-profit corporation created in part for the
purpose of maintaining a dam and lake that previously existed
in the subdivision. In August 2007, the dam failed, and the
lake emptied. Plaintiffs filed a complaint seeking
declaratory judgment and alleging breach of contract against
the company and the members of the board-Joseph Navarro,
Robert Potusna, Thomas Gross, Kevin Cleary, Ken Bruns, Drew
Ferracuti, Margaret Nevin, Frank Less, Ryan Reynolds, Tom
Maratea, and John Polen-for failing to rebuild the
2 Defendants moved for summary judgment, alleging that Dayton
Estates Dam & Water Company is not a homeowners
association operating a common interest community under
section 9-102(c) of the Forcible Entry and Detainer Act (Act)
(735 ILCS 5/9-102(c) (West 2014)) and moved to dismiss
plaintiffs' breach of contract claim against the company.
The individual board members also filed motions for summary
judgment seeking dismissal of the breach of contract claims.
The trial court granted summary judgment on the declaratory
judgment counts and dismissed plaintiffs' breach of
contract claims against the company and the individual board
members with prejudice. We affirm.
4 Dayton Estates is a residential community in Dayton
Township near Ottawa. The community consists of two
subdivisions, Dayton Estates and Dayton Estates West. In June
1973, the First National Bank of Ottawa, as trustee, and
developer Walter Scherer, Jr., recorded a plat and
declaration of covenants and restrictions for Dayton Estates
subdivision. The covenant noted that it was the desire of the
developer to create a community of country homes and set
forth certain restrictions as to the use of each lot, and
included common restrictions, such as no additional buildings
or fences without written approval from the developer or his
agent. The developer also reserved the right to flood
portions of lots 10 through 14 to create a lake that would be
available for use by all the lot owners.
5 The declaration was amended in March 1974 to change the
contour flood line and again in April 1975 to include the
creation of a not-for-profit corporation known as
"Dayton Estates Dam & Water Company."
Specifically, the second amendment to the declaration stated
that the owners of each lot in Dayton Estates:
"shall automatically be and become a member of the
not-for-profit corporation known as Dayton Estates Dam &
Water Company which corporation has been established by the
Developer for the purpose of maintaining the dam which forms
the lake on the Westerly side of the subdivision and for
owning and operating any centralized system that may in the
future be constructed for the furnishing of water to all of
the lots in the subdivision and in the companion subdivision
on the westerly side of said lake known as Dayton Estates
West. Each member of said not-for-profit corporation shall be
subject to assessment for a pro-rata share of such expenses
that might be incurred by said corporation for such
6 On May 8, 1975, the developer and the trustee recorded a
declaration of covenants and restrictions for Dayton Estates
West that contained the same covenants and restrictions as
those in the Dayton Estates declaration. It reserved the
right to flood a portion of lots 10 through 14 for the lake
and provided membership in the dam and water company to each
lot owner in Dayton Estates West.
7 Three weeks later, Dayton Estate Dam and Water Company was
created by articles of incorporation. The articles of
incorporation were filed with the Secretary of State on May
28, 1975, and recorded in the county recorder's office on
June 4, 1975. According to paragraph 5 of the articles of
incorporation, the purpose of the company was:
"(a) maintenance of a dam across the stream known as
Sunnybrook Creek *** situated between the Subdivisions known
as Dayton Estates and Dayton Estates West.
(b) The construction and installation of a centralized system
for the furnishing of water to all lots in Dayton Estates and
Dayton Estates West ***.
(c) To hold the legal title to that strip of real estate
situated immediately between the aforesaid subdivisions known
as Dayton Estates and Dayton Estates West, and such other
real estate as may be required to fulfill the purposes of the
7 also provided that the owner of each lot was subject to
assessment, as specified in the bylaws, for expenses incurred
for the corporate purpose. Finally, the articles stated that
"the obligation of maintaining the dam specified in
Paragraph 5(a) hereof, and power to access the members
specified in Paragraph 7, may not be altered or deleted by
amendment *** without consent of the County Board." The
articles of incorporation were signed by Walter Scherer, Jr.,
Walter Scherer, Sr., and Margaret Scherer, who also named
themselves as the board of directors.
8 Bylaws were adopted by the company in accordance with state
law. The bylaws, as adopted, describe the governing body and
provide the date for annual membership meetings for election
of directors and the transaction of business. Annual meetings
are set on the second Monday in March of each year. The
bylaws also give the board of directors the power to manage
the company and authorize assessments on the members. The
bylaws may be amended by the board of directors.
9 From 1976 to 1986, the annual report filed by the company
with the Secretary of State required a brief statement as to
the corporate purpose. The report generally indicated that
the purpose of the company was to maintain a dam and lake for
private recreation. Beginning in 1987, the Secretary of State
amended the form to include "yes" or "no"
answers to whether the company was a condominium association,
a cooperative housing association, or a homeowners
association operating a common interest community as defined
in section 9-102 of the Code of Civil Procedure (Code) (735
ILCS 5/1-101 et seq. (West 2008)). The first year,
the company responded by answering "no" to all
three questions. Beginning in 1988, the officers checked
"yes" to the third question, indicating that the
company was a homeowners association operating a common
10 On September 15, 1992, a document was recorded in the
county recorder of deeds office entitled, "Appointment
of Successor Developer." The document appointed and
designated the board of directors of the Dayton Estate Dam
& Water Company as the successor to the developer under
the declaration of covenants and restrictions of the
subdivision recorded in 1975. In a related lawsuit filed
seven months later, the Dayton Estates Dam & Water
Company filed a complaint against Dayton Estates West lot
owners, Maurice and Sue Johnson, to enforce a 10-foot setback
requirement contained in the declaration of covenants and
restrictions. In October 1993, the trial court entered a
default judgment in the company's favor, ordering
defendants to remove their utility building from within 10
feet of the boundary of their lot.
11 As early as 1997, issues with the dam and the need for
repairs were discussed by board members and reviewed at
annual meetings. However, a vote was never brought before the
board or its membership, and no company action was taken.
After the dam failed in August 2007, the company explored
financing options for repairing or replacing the dam. An
emergency annual meeting was held on August 30, 2007. At that
meeting, eight members were elected to the board, including
plaintiffs Chiurato and Cioni. Chiurato was appointed as
president, and Cioni was appointed as vice president. Repairs
to the dam were the central topic discussed at the meeting. A
committee was formed to contact ...