D'Attomo v. Baumbeck, 2015 IL App (2d) 140865

Background

Condominium sale dispute over disclosure of Rental Limitations (2010 Amendment) not provided pre-closing; 2002 Declaration allowed leases but 2010 Amendment added limits; closing occurred June 21, 2013; plaintiffs leased unit but ceased when Rental Limitations discovered post-closing; suit filed Oct 15, 2013 against Baumbeck, the Association, and Board; trial court dismissed counts V–VI against Association/Board and later Baumbeck moved to dismiss; appellate court addressed jurisdiction and merits, remanding for further proceedings while affirming some dismissals and reversing on others.
Baumbeck served as trustee and Board member during relevant times and voted against 2009 proposal but personally voted on 2010 Amendment; disclosures allegedly withheld until after closing; plaintiffs contend 22.1(a) duties require pre-closing and post-closing remedies exist under the Act.
Contract incorporated 22.1 disclosure duties by statute; plaintiffs alleged breach of contract and implied covenant due to failure to disclose 2010 Amendment before closing; post-closing nondisclosure alleged to have affected ownership rights.
Counts III–VI alleged fraud, fiduciary duty, and constructive fraud related to concealment and board/fiduciary conduct; trial court dismissed these counts; the court allowed refiling of V–VI against Association/Board but later dismissal remained on appeal.
Appellate court held 22.1 creates an implied private right of action for post-closing nondisclosures that affect ownership rights, vacating dismissal of Count I; affirmed dismissal of Count II’s implied covenant of good faith, and dismissed Counts III–VI for lack of fiduciary relationship or other elements; remanded for proceedings consistent with opinion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether 22.1 creates an implied private right of action post-closing.	D’Attomos rely on Nikolopulos to show implied remedy.	Baumbeck argues no post-closing remedy under 22.1.	Implied post-closing remedy exists.
Whether 22.1 supports breach of contract claim for pre-closing nondisclosures.	Contract incorporated 22.1; failure to disclose breached contract.	No preclosing breach or remedy under the Act.	Counts I and II partly viable; breach of contract claim sustained as to 22.1 disclosure; covenant of good faith not independent.
Whether fraudulent concealment/misrepresentation claims survive.	Baumbeck concealed 2010 Amendment to induce purchase.	No fiduciary duty or duty to disclose; no reasonable reliance shown.	Counts III and IV dismissed.
Whether plaintiffs can state a fiduciary-duty claim against Baumbeck post-closing.	Board/officers owe fiduciary duties; Baumbeck breached pre- or post-closing.	Baumbeck not a Board member post-closing; no fiduciary duties.	Counts V–VI dismissed; fiduciary duty exists as matter of law but not applicable to Baumbeck post-closing; affirmed.
Whether Rule 191 affidavit and declaration issues affect the outcome.	Affidavit insufficient per Rule 191; strike appropriate.	Affidavit admissible; proper under Rule 191.	Affidavit admissible; no abuse of discretion.

Key Cases Cited

Nikolopulos v. Balourdos, 245 Ill. App. 3d 71 (Ill. App. 1993) (implied private remedy under 22.1 for post-closing nondisclosures)
Mikulecky v. Bart, 355 Ill. App. 3d 1006 (Ill. App. 2004) (post-closing remedy under 22.1 supported; disclosure to protect buyer)
Sawyer Realty Group, Inc. v. Jarvis Corp., 89 Ill. 2d 379 (Ill. 1982) (private right of action for statutory violation may be implied)
Kovac v. Barron, 2014 IL App (2d) 121100 (Ill. App. 2d 2014) (fiduciary duties; constructive fraud elements; post-closing considerations)
Voyles v. Sandia Mortgage Corp., 196 Ill. 2d 288 (Ill. 2001) (independent claim for breach of implied covenant limited to specific contexts)
Zimmerman v. Northfield Real Estate, Inc., 156 Ill. App. 3d 154 (Ill. App. 1986) (duty to disclose by brokers under professional regime)