Henderson Square Condominium Ass' v. LAB Townhomes, L.L.C.
16 N.E.3d 197
Ill. App. Ct.2014Background
- Henderson Square Condominium Association and its Board sue LAB Townhomes, LAB Lofts, Lincoln/Ashland/Belmont, Enterprise Development, and the Shipkas for five counts arising from sale and construction of units.
- Plaintiffs allege latent construction defects, misrepresentations, and fiduciary breaches; water intrusion and defective insulation were later discovered.
- Defendants allegedly marketed and sold units in 1996-1996 with representations that plans and specifications would be followed and that common elements would be habitable, while latent defects existed.
- The trial court dismissed counts I–III as time-barred under 13-214, permitted repleading of counts IV–V, and later dismissed those counts as well; flipside, discovery of defects occurred years later (2009–2012).
- The appellate court reversed on counts IV–V, holding 13-214 applies with a fraud exception, and remanded for further proceedings; issue of damages under Municipal Code 13-72-030 was addressed favorably to plaintiffs.
- Key factual disputes include when construction was complete, when plaintiffs knew or should have known of defects, and whether defendants’ conduct tolled or concealed claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness under 13-214 governs IV and V | Counts IV–V not construction-based; fraud exception tolls the limits | Counts IV–V arise from construction activities; time-barred under 13-214 | Counts IV–V timely due to fraud exception; reversed |
| Fraud exception tolling applies | Defendants concealed defects; fraud tolls repose | No active concealment; not pled with requisite specificity | Fraud exception applies; tolling valid, so not time-barred |
| Count IV under Municipal Code 13-72-030 damages allowance | Code allows damages; private action exists for damages | Private damages may be limited; earlier version of statute circumstances unclear | Count IV may seek damages; not limited to injunctive relief alone |
| Count V fiduciary-duty claim viability | Pre-turnover and post-turnover budgeting and reserves breached duties | Duty limited to pre-turnover period; post-turnover duties not alleged | Count V survives; trial court erred in dismissal due to factual questions about reserves and duty |
| Relation to other statutes/cases | Code and Act create independent remedies and duties | Limitations and pleading requirements align with construction context | Court addressed interplay; reversible error on 2-615 dismissal for IV and V |
Key Cases Cited
- Bowman v. Travelers Casualty & Surety Co., 229 Ill. 2d 461 (Ill. 2008) (construction-related liability; limits of 13-214 vs contract law)
- Blinderman Construction Co. v. Metropolitan Water Reclamation District of Greater Chicago, 325 Ill. App. 3d 362 (Ill. App. 2001) (13-214 applicable to supervisor/manager of construction; latent defects context)
- Water Tower Realty Co. v. Fordham 25 E. Superior, L.L.C., 404 Ill. App. 3d 658 (Ill. App. 2010) (indemnity/contractual liability; not dispositive for 13-214 in all cases)
- Maine Township High School District 207 v. International Insurance Co., 292 Ill. App. 3d 14 (Ill. App. 1997) (latent defects definition aiding timing analysis)
- VonHoldt v. Barba & Barba Construction, Inc., 175 Ill. 2d 426 (Ill. 1997) (latent defects; promissory/latent defect interplay with 13-214(e))
- Armstrong v. Guigler, 174 Ill. 2d 281 (Ill. 1996) (nature of liability vs form; limits analysis under 13-214)
- Skubiak v. Heider, 248 Ill. App. 3d 1000 (Ill. App. 1993) (fraud concealment; duty to reveal material defects)
- Hirsch v. Feuer, 299 Ill. App. 3d 1076 (Ill. App. 1998) (Disclosure Act distinct from fraud claims; pleading standards)
- Klasek v. Anderson, 393 Ill. App. 3d 219 (Ill. App. 2009) (Disclosure Act analysis of similar remedial framework)
- Wolinsky v. Kadison, 114 Ill. App. 3d 527 (Ill. App. 1983) (remedies under municipal code; damages availability)
- Palm v. 2800 Lake Shore Drive Condominium Ass’n, 2013 IL 110505 (Ill. 2013) (private remedies under Municipal Code context)