Board of Managers of Park Point at Wheeling Condominium Association. v. Park Point at Wheeling, LLC
2015 IL App (1st) 123452
Ill. App. Ct.2016Background
- Park Point at Wheeling is a 128-unit condominium completed 2001–2004; latent water/air infiltration defects surfaced in 2007 with estimated repair costs > $4M.
- Board of Managers (condominium association) sued developer, original & successor general contractors, masonry and carpentry subcontractors, window/patio-door manufacturers, and project architect Hirsch; Counts II and III allege breach of the implied warranty of habitability (only Counts at issue on appeal).
- Association alleged developer and original GC insolvent (on information and belief), prompting attempt to pursue other responsible parties.
- Trial court dismissed (via 2-615 and 2-619) the implied-warranty claim against the architect and dismissed/limited claims against other defendants based on a conspicuous written disclaimer in the condominium purchase agreements and a Certificate of Limited Warranty.
- On interlocutory appeal, the court considered (1) whether the implied warranty of habitability extends to the architect (and/or should be extended under Minton), and (2) whether the waiver/disclaimer in the purchase agreements was conspicuous and binding on developer, contractors, and subcontractors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether implied warranty of habitability applies to architect Hirsch | Extend Minton to hold architect liable because architect’s design contributed to latent defects and builder is insolvent | Implied warranty traditionally applies to builders/builder-sellers (and, in limited circumstances, subcontractors who participate in construction); architects provide professional services and are subject to negligence standard, not implied warranty | Court refused to extend Minton to architects; dismissed warranty claim against Hirsch |
| Whether the purchase agreement disclaimer was conspicuous and validly waived implied warranty as to developer-seller PPW | Disclaimer ineffective because buyers were not specifically called to it or did not initial it; some case law suggests requirements | Disclaimer is all-caps, references habitability by name, explains consequences, and purchasers signed both the agreement and the limited-warranty certificate | Disclaimer was sufficiently conspicuous and effective as to developer PPW; dismissal of developer affirmed |
| Whether the disclaimer protected developer’s general contractor and subcontractors (Smith, Midwest, G.W. Thiel) | Disclaimer should not bar claims against contractors/subcontractors — public policy and Pratt II protect buyers; Minton supports extending liability to non-sellers when seller is insolvent | Disclaimer language covers "Seller (and its owners, officers, agents, and other representatives)"; court found that absent agency/representation allegations, contractors are not within that language | Court held the disclaimer did not encompass Smith, Midwest, or G.W. Thiel; dismissals as to those defendants were reversed and remanded |
| Whether denial of motion to reconsider as to Smith was proper | Trial court abused discretion by denying reconsideration | Trial court acted within discretion | Court held denial was an abuse of discretion and reversed that denial |
Key Cases Cited
- Petersen v. Hubschman Const. Co., 76 Ill. 2d 31 (Ill. 1979) (adoption of implied warranty of habitability for new-home builder-sellers)
- Redarowicz v. Ohlendorf, 92 Ill. 2d 171 (Ill. 1982) (implied warranty treated as independent undertaking that survives deed delivery)
- Minton v. The Richards Group of Chicago, 116 Ill. App. 3d 852 (Ill. App. Ct. 1983) (extended implied warranty to a painting subcontractor where builder was insolvent)
- Paukovitz v. Imperial Homes, Inc., 271 Ill. App. 3d 1037 (Ill. App. Ct. 1995) (designer not subject to implied warranty because it did not perform construction)
- VonHoldt v. Barba & Barba Constr., Inc., 175 Ill. 2d 426 (Ill. 1997) (implied warranty applied to contractor who disregarded architect’s plans)
- 1324 W. Pratt Condominium Ass’n v. Platt Const. Group, Inc., 404 Ill. App. 3d 611 (Ill. App. Ct. 2010) (discussion of warranty scope and disclaimer enforceability)
- Tassan v. United Dev. Co., 88 Ill. App. 3d 581 (Ill. App. Ct. 1980) (applying implied warranty to developer-sellers of condominium units)