Napcor Corp. v. JP Morgan Chase Bank, NA
938 N.E.2d 1181
Ill. App. Ct.2010Background
- Defendant JP Morgan Chase Bank, as trustee, managed a 72,047-square-foot industrial building in Aurora.
- Roof repairs in 1994 involved installing a new roof over the existing roof rather than tear-off, with later leakage issues and wind uplift concerns.
- Plaintiff Napcor acquired the building in August 1996 after a due diligence period and relied on representations about the roof and warranty.
- Contract paragraph 10(e) stated the buyer accepted the property in 'AS IS' condition and that no representations outside the contract were made; the clause was later excluded at trial.
- Post-sale roof leaks persisted, with expert testimony attributing damage to the lack of a tear-off, and substantial repair costs were incurred by plaintiff.
- The jury found two misrepresentations: that the building had a 'new roof in 1994 (tear off)' and that it carried a 10-year warranty, awarding damages of $1,201,158.05.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred in denying JNOV | Napcor argues evidence supports fraud verdict | Chase asserts insufficient or nonoverwhelming evidence for verdict | No; denial affirmed; evidence supports verdict |
| Whether the 'AS IS' clause barred reliance | Napcor relies on Bauer to defeat clause as defense to fraud | Chase argues 'AS IS' clause precludes reliance on misrepresentation | No; 'AS IS' clause not a defense to fraud |
| Whether the misrepresentation regarding tear-off was material | Napcor contends tear-off misrepresentation was material and caused reliance | Chase contends no material misrepresentation or reliance proven | Yes; misrepresentation material and reliance proven; jury could deem damages appropriate |
| Whether the jury burden instructions were proper | Napcor supports IPI 800.02A as correct | Chase preferred 800.02B requiring clear and convincing for all elements | Yes; court properly instructed under 800.02A; discretion to choose instruction upheld |
| Whether the damages award was against the manifest weight | Damages supported by expert testimony on repair costs | Award is excessive given the building's use period | No; award within range of expert testimony and not manifestly excessive |
Key Cases Cited
- Bauer v. Giannis, 359 Ill.App.3d 897 (2005) (as-is clause not defense to fraud; reliance allowed)
- Snelson v. Kamm, 204 Ill.2d 1 (2003) (JNOV standards; review de novo)
- Gehrett v. Chrysler Corp., 379 Ill.App.3d 162 (2008) (material misrepresentation and reliance elements)
- Dietrich v. Jones, 172 Ill.App.3d 201 (1988) (damages for fraud measured by cost of cure or diminution in value)
- Washington Courte Condominium Ass'n-Four v. Washington-Golf Corp., 267 Ill.App.3d 790 (1994) (damages appellate standard; range of expert estimates)
- Parsons v. Winter, 142 Ill.App.3d 354 (1986) (fraud burden of proof context cited for IPI instruction consideration)