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2022 IL 128040
Ill.
2022
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Background

  • Harry and Dawn Channon sought to sell their condominium and requested disclosure documents required by section 22.1 of the Condominium Property Act (765 ILCS 605/22.1). Westward Management, the condominium association’s management agent, charged $245 for those documents.
  • The Channons filed a putative class action against Westward alleging (§22.1) the fee exceeded the statute’s limit and also asserted a Consumer Fraud Act claim.
  • The trial court denied Westward’s motion to dismiss and certified the legal question whether §22.1 implies a private cause of action by a seller against a property manager for charging excessive disclosure fees.
  • The appellate court answered yes, applying the Metzger four-factor test, and held a seller could sue the manager (as an agent) for charging fees beyond the statute’s "direct out-of-pocket" standard.
  • The Illinois Supreme Court granted review, applied the Metzger test de novo, and concluded §22.1 does not create an implied private right of action for unit sellers against an association’s agent; it reversed and remanded.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether §22.1 of the Condominium Property Act implies a private right of action for a unit seller to recover for excessive fees charged to obtain statutorily mandated disclosures The fee cap in §22.1(c) shows legislative intent to benefit sellers; sellers harmed by excessive fees should have an implied private remedy §22.1 primarily protects prospective buyers; sellers receive at most incidental benefit; statute names the association (not private parties) to provide documents and contains no express private remedy No. The court held sellers are not the primary class §22.1 was intended to benefit; Metzger first prong fails and thus no implied private right exists.
Whether a private implied right (if any) may be asserted against a property manager acting as the association’s agent Manager may be liable if it contracted to provide the disclosures and actively participated in the breach Statutory duty lies with the association/board; any remedy (if implied) would not necessarily extend to an agent Not reached substantively because no implied private right exists; court reversed appellate holding allowing suit against the manager.

Key Cases Cited

  • Metzger v. DaRosa, 209 Ill. 2d 30 (2004) (articulates four-factor test for implying private rights of action)
  • Abbasi v. Paraskevoulakos, 187 Ill. 2d 386 (1999) (private remedy implied only where clearly needed to effectuate statute)
  • Board of Education of Chicago v. A, C & S, Inc., 131 Ill. 2d 428 (1989) (will imply remedy when there is a clear need)
  • Sawyer Realty Group, Inc. v. Jarvis Corp., 89 Ill. 2d 379 (1982) (discusses standards for implying private remedies)
  • Fisher v. Lexington Health Care, Inc., 188 Ill. 2d 455 (1999) (used in formulating Metzger factors)
  • Horist v. Sudler & Co., 941 F.3d 274 (7th Cir. 2019) (concluded §22.1 does not create an implied private right for sellers)
  • Nikolopulos v. Balourdos, 245 Ill. App. 3d 71 (1993) (held §22.1 was designed to protect prospective purchasers)
  • Mikulecky v. Bart, 355 Ill. App. 3d 1006 (2004) (discusses purchaser-protection purpose of disclosure statutes)
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Case Details

Case Name: Channon v. Westward Management, Inc.
Court Name: Illinois Supreme Court
Date Published: Nov 28, 2022
Citations: 2022 IL 128040; 215 N.E.3d 926; 465 Ill.Dec. 721; 128040
Docket Number: 128040
Court Abbreviation: Ill.
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    Channon v. Westward Management, Inc., 2022 IL 128040