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Pack v. Maslikiewicz

Court of Appeals of Illinois, First District, Fourth Division

September 26, 2019

ADAM PACK and JENNIFER PACK, Plaintiffs-Appellees,

          Appeal from the Circuit Court of Cook County. No. 16 L 1501 The Honorable Jerry A. Esrig, Judge Presiding.

          Attorneys for Appellant: Pericles Abbasi, of Chicago, for appellant.

          Attorneys for Appellee: Robert A. Shipley, of Shipley Law Group, Ltd., of Chicago, for appellees.

          PRESIDING JUSTICE GORDON delivered the judgment of the court, with opinion. Justices Reyes and Burke concurred in the judgment and opinion.



         ¶ 1 After a bench trial, defendant, Magdalena Maslikiewicz, was found liable for common- law fraud and for violating the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2016)), in connection with her sale of a single-family residence to plaintiffs, Adam and Jennifer Pack. A judgment was entered in favor of plaintiffs and against defendant for $148, 119.50, plus costs and attorney fees of $68, 444.79. Defendant appeals, claiming that (1) the trial court's findings were against the manifest weight of the evidence, (2) the trial court erred in finding the Consumer Fraud Act applicable, (3) the trial court erred in admitting certain evidence, and (4) the trial court erred in awarding attorney fees and costs. For the reasons that follow, we affirm.

         ¶ 2 BACKGROUND

         ¶ 3 I. Complaint

         ¶ 4 On February 16, 2016, plaintiffs filed a verified two-count complaint against defendant. Count I was for common-law fraud and alleged that plaintiffs were the owners of a single-family home on North Moody Avenue, which they agreed to purchase from defendant on October 28, 2013. Defendant had previously purchased the home and rehabbed it, advertising that the property was for sale as a " 'complete renovation.' " Plaintiffs alleged that defendant's purchase and renovation of the property was "solely for ultimate sale and commercial gain" and that defendant never resided at the home. Plaintiffs alleged that they executed a real estate sales contract to purchase the residence "based upon defendant's marketing representations that there had been a complete renovation along with the representations in the contract in which defendant denied any issues or problems with the residence including specifically the basement, foundation, electrical or HVAC systems."

         ¶ 5 Plaintiffs alleged that defendant was "directly and intimately involved with the original purchase of the property and the subsequent construction activities, " and that prior to listing the property for sale, defendant "had actual or presumed knowledge" as to the condition of the property, including the scope of any renovation construction activities. Plaintiffs further alleged that defendant was "directly and intimately involved" with the marketing of the property and "was aware of and had actual or presumed knowledge" of the conditions and defects alleged in the complaint. However, plaintiffs alleged that defendant falsely denied the existence of any alleged issues, including during the interim period between execution of the contract and the December 4, 2013, closing, "with the intent of inducing [plaintiffs] to rely upon the statements and misrepresentations and complete the purchase [of] the property."

         ¶ 6 Plaintiffs alleged that the defects present within the property were known to defendant but "were covered up and hidden during the ordinary and normal course of construction and could not have been discovered by" plaintiffs. Plaintiffs further alleged that the defects were "apparent and known only by defendant as the renovation construction did not comply with applicable construction standards and codes as well as construction customs and practices." Plaintiffs alleged that they relied on defendant to complete the renovation construction of the home in compliance with the applicable construction standards and codes and that they did not know, and could not have known, that the renovation construction did not comply with applicable construction standards and codes.

         ¶ 7 Plaintiffs alleged that after the execution of the contract, but prior to closing, they asked defendant several questions about the property, including "questions relating to water infiltration and improper electrical service." Defendant denied the existence of any water infiltration and represented that the electrical service was adequate and appropriate; plaintiffs alleged that they relied on these denials. However, after the closing, plaintiffs discovered multiple issues concerning water infiltration and the electrical service and also discovered that the representations defendant had made concerning " 'new appliances' " were false. Due to these issues, plaintiffs retained multiple contractors to inspect the home.

         ¶ 8 Plaintiffs alleged that the contractors informed them of numerous defects and problems with the home, including:

"a. Failure to waterproof the basement;
b. Failure to install drain tile in the basement;
c. Failure to demolish the existing walls when performing renovation construction of the basement;
d. Improper electrical grounding in the basement wiring;
e. Buried electric boxes in the basement walls;
f. Failure to install proper load bearing support beams in the basement;
g. Failure to properly construct the basement floor."

         Plaintiffs alleged that as a result of defendant's knowing failure to comply with applicable building codes and construction customs and practices, plaintiffs had spent substantial sums of money to identify and correct the defects.

         ¶ 9 Count II of the complaint alleged the same facts as in count I but alleged that defendant's conduct constituted deceptive acts and business practices in violation of the Consumer Fraud Act.

         ¶ 10 II. Pretrial Proceedings

         ¶ 11 After the denial of a motion to dismiss, the parties proceeded to discovery, and defendant filed a motion for summary judgment, which was denied on November 13, 2017. On December 6, 2017, defendant filed a motion to bar the testimony of David Larkin, the president of DAL Builders (DAL), the contractor who discovered and repaired the alleged defects in the home. Defendant claimed that plaintiffs had indicated during the briefing on the motion for summary judgment that Larkin would serve as an expert in their case, but that Larkin had, in fact, never agreed to be their expert. Defendant further argued that the supplemental disclosures under Illinois Supreme Court Rule 213 (eff. Jan. 1, 2007) naming Larkin as an expert were untimely since they were filed after the court's deadline. Finally, defendant claimed that the alleged opinions set forth in the supplemental disclosures were insufficient and did not provide a basis for any of Larkin's opinions. Accordingly, defendant sought to bar Larkin's testimony.

         ¶ 12 Attached to the motion to bar was an undated certification by Larkin, in which he stated that "nobody ever asked me to act as an expert or offer any opinions related to any work performed by others and I have no opinions one way or the other on the work performed by any other persons." Larkin further stated that "I do not have any opinions to provide in this case including opinions that there was [sic] 'code violations and construction defects as well as the scope of the construction activities.' " Attached to his certification were e-mails between Larkin and defendant's counsel, [1] in which defense counsel stated that he had discovered that DAL's work was performed without permits and indicated that he "[would] have no choice but to alert the proper authorities about the illegal work and ask that the City of Chicago conduct an investigation into DAL and its business practices in the City of Chicago." However, defense counsel stated that "[o]f course, if [plaintiffs] agree to dismiss the case immediately with prejudice or if DAL tells me in writing that they will withdraw any and all testimony in this case, then the matter will be dropped." Larkin responded that "if it is a[n] option to withdraw all testimony and not be involved with this case at all I am all for that option. Let me know what needs to be done so I am done with all this." In later e-mails, Larkin reaffirmed that he would not be acting as an expert in the matter.

         ¶ 13 Also attached to the motion to bar was a June 5, 2017, case management order providing that the parties were to answer Rule 213(f) interrogatories by August 3, 2017, and that depositions of Rule 213(f)(1), (2), and (3) witnesses were to be completed by September 3, 2017. The order also provided that the parties "waive 60 day rule for expert discovery."

         ¶ 14 Finally, attached to the motion to bar was an unfiled copy of plaintiffs' supplemental Rule 213 disclosures, in which plaintiffs stated that Larkin, "previously disclosed as a witness, " was additionally "expected to testify to the following defects and code violations:"

"1. New basement walls having been constructed in front of existing (old) walls.
2. The pre-existing 'old' walls had clear evidence of water damage and staining.
3. Debris and garbage was stuffed between the old and new walls.
4. Buried live electrical connections in the old wall, which created a fire hazard.
5. Improper grounding of the water service.
6. Improperly wired switches.
7 .Improper use of BX in electrical wiring.
8. Improper excavation of the old concrete floor and pouring of a new concrete floor directly onto clay. The excavation of the old floor was not sufficiently deep and there was a failure to properly prepare the base with gravel and rebar. The existing water and sewer lines were not replaced and buried within the new floor. The result was that the 'new' concrete floor heaved and cracked.
9. The posts supporting the basement ceiling were not properly secured in the concrete. No piers were constructed. When the old basement floor was excavated, the existing area which surrounded the post was left with the new floor poured around. The existing concrete 'supporting' the posts was crumbling, causing a structural issue.
10. Concrete and debris from the basement demolition and excavation was found buried in the crawl space."

         The supplemental disclosure also provided that "Mr. Larkin is further expected to testify consistent with the notes taken during the project, previously identified as Exhibit 6 and discussed during plaintiffs' depositions."

         ¶ 15 In response, plaintiffs claimed that Larkin had been timely disclosed as an expert. They claimed that he was first disclosed in plaintiffs' answers to interrogatories on March 7, 2017, which were supplemented on August 3, 2017, and which were further supplemented, following defendant's refusal to depose Larkin, on September 14, 2017, more than 90 days prior to trial. Plaintiffs also noted that the 60-day rule for expert discovery had been waived per the June 5, 2017, case management order.

         ¶ 16 Plaintiffs further claimed that they had disclosed the basis for Larkin's opinions by producing copies of DAL's records, which included records reflecting DAL opinions and observations, and that both plaintiffs testified in their depositions concerning DAL's scope of work, observations, and opinions. Plaintiffs claimed that defense counsel chose not to depose Larkin, cancelling his scheduled deposition and refusing to reschedule, and also "emphasize[d]" that defense counsel had "engaged in a series of threatening emails to the witness as well as plaintiffs' counsel." Finally, plaintiffs claimed that the first time they had seen Larkin's "certification" was in connection with the motion to bar and that they had not had the opportunity to depose Larkin as to its contents or the circumstances under which it was procured.

         ¶ 17 III. Trial

         ¶ 18 The parties came before the trial court for a bench trial on December 18 and 19, 2017. Prior to trial, the court addressed defendant's motion to bar Larkin's testimony. The court denied the motion, finding that Larkin had timely been identified as a Rule 213(f)(1) and potential Rule 213(f)(2) witness. The court further advised defendant that if Larkin testified to an opinion that counsel felt had not been properly disclosed, the court would rule on the objection at that time.

         ¶ 19 A. Plaintiffs' Case-in-Chief

         ¶ 20 1. Defendant

         ¶ 21 Plaintiffs' first witness was defendant, who testified as an adverse witness. Defendant testified that she came to the United States from Poland, where she had received a master's degree in economics. She was residing with Arthur Maliszewski at a home in Norridge at the time she purchased the subject property in November 2012 and continued to live with him at the time of trial; defendant testified that Maliszewski was the owner of Midwest Electric, Inc. (Midwest), one of the contractors that performed work on the subject property. Defendant further testified that Maliszewski was the individual who defendant relied on as her construction representative during the renovation of the subject property.

         ¶ 22 Defendant testified that, prior to the purchase of the subject property, she had purchased two other properties: a condo that she continued to own and a single-family home that she sold for a profit in 2012. Defendant also purchased three additional properties after the purchase of the subject property, all of which had been sold for a profit.

         ¶ 23 Defendant testified that she visited the subject property twice before closing on its purchase. During the attorney review period, in response to a question from defendant's attorney, the seller disclosed that there had previously been a leak in the basement three or four years ago, which the seller had not observed since that time. The seller also disclosed that she had no knowledge of any mold, seepage, or flooding problems, other than a 2008 roof leak and the leak in the basement; defendant testified that she did not consider the leak in the basement to be a "basement leak" because "[i]t was connected to the leak from the roof." Since she believed the source of the leak was the roof, which had been repaired, defendant testified that she did not hire a contractor to investigate the source or cause of the basement leak.

         ¶ 24 Defendant testified that the subject property was listed for sale in 2013; defendant prepared the description of the property used in the listing in connection with the listing agency. Plaintiffs eventually made an offer on the property, and the parties signed a contract for the sale of the property in October 2013. Defendant confirmed that one page of the contract was entitled " 'Residential Real Property Disclosure Report' " and that she filled out and signed this page. On the form, defendant answered "no" to questions asking whether she was aware of any flooding or recurring problems in the basement, any leaks or material defects in the roof, any defects in the walls or floors, any defects in the electrical system, or any defects in the plumbing system. Defendant was aware that this information was going to be given to purchasers and that the purchasers would rely on the information contained on the form.

         ¶ 25 Defendant testified that, during the attorney review period, plaintiffs' attorney asked questions about the condition of the basement, and defendant did not disclose the prior basement leak because "[t]hat was four years before, and they said they never had the same problem again."

         ¶ 26 Defendant testified that the only permit obtained for the renovation of the subject property was a permit for the exterior work on the home. There was no permit for any interior work, and the City of Chicago did not inspect the plumbing or electrical work. Defendant testified that she visited the property "from time to time" during the renovations, and that she had the ability to visit at any time because she had keys to the property. Defendant identified a lien waiver signed by Maliszewski on December 31, 2013, with respect to the work performed on the subject property but did not have a canceled check to corroborate payment.

         ¶ 27 Defendant testified that Maliszewski decided what repairs should be made on the property and that she relied on Maliszewski on that subject. Defendant testified that she "didn't have enough knowledge to really decide what should be repaired and what shouldn't." Defendant was aware that drywall work was involved in the basement. Defendant also observed hairline cracks on the concrete basement floor during the renovation, which she asked to be repaired. Defendant was not aware of how the repairs were performed, but "just [knew] that it was fixed."

         ¶ 28 2. Plaintiff Adam Pack

         ¶ 29 Plaintiffs' next witness was plaintiff Adam Pack, [2] who testified that he was currently employed with the Evanston Police Department. He and plaintiff Jennifer Pack, his wife, closed on the purchase of the subject property on December 4, 2013, and had lived there continuously since that date. Adam was first introduced to the property through plaintiffs' realtor and reviewed a listing posted concerning the property, which included a statement that the property was a "complete renovation." Adam testified that the characterization of the property as completely renovated was significant to him because he and Jennifer were looking for a property that needed no additional work. Adam further testified that, in his mind, a "complete renovation" meant "finding any defects or issues with a property, fixing them. New mechanicals, new roof, plumbing, electrical. Any kind of ...

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