2012 IL App (5th) 100506
Ill. App. Ct.2012Background
- Plaintiffs allege real estate purchases in a subdivision with misrepresentations by Hunter's Point Homes and Century 21 agents about buildable lots, easements, and code compliance.
- The Olsons contracted for Lot 7 at Hunter's Point Drive; other plaintiffs contracted for properties in the same subdivision.
- Defendants allegedly misrepresented that lots permitted permanent structures, garages/fences could be built, and structures complied with laws, easements, and codes.
- There were alleged easements in favor of Illinois Power limiting construction on the rear portions of the lots, including encroachment by the house.
- District court dismissed all counts under Moorman doctrine; trial court later dismissed with prejudice; plaintiffs appealed.
- The appellate court reversed in part, holding certain counts could proceed while others were properly dismissed or remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Moorman applicability to economic losses for fraud | Olson alleges intentional misrepresentation in I–V. | Sellers and brokers argue reliance on misrepresentations of law not permitted. | Counts I–V survive for now; Moorman not controlling where intentional misrepresentation alleged. |
| Negligent misrepresentation by sellers barred by Moorman | Lusicic/Dintelman/others allege economic losses from negligent misrepresentation. | Moorman bars negligent misrepresentation claims for purely economic loss. | Count VI dismissed; Moorman applied to negligent misrepresentation. |
| Promissory estoppel viability given contracts | Promissory estoppel should permit relief in absence of enforceable contract? | Existence of contracts defeats promissory estoppel relief. | Counts VII and VIII dismissed due to contract existence. |
| Broker negligent misrepresentation viability | Broker counts against IX–X may proceed for negligent misrepresentation. | Moorman may bar but brokers are information-suppliers; discovery possible. | Counts IX–X not properly dismissed; remain viable. |
Key Cases Cited
- Moorman Mfg. Co. v. National Tank Co., 91 Ill.2d 69 (Ill. 1982) (economic-loss rule; exception for intentional misrepresentation)
- Zimmerman v. Northfield Real Estate, Inc., 156 Ill.App.3d 154 (Ill. App. 1986) (broker as information-supplier liable for negligent misrepresentation)
- Kinsey v. Scott, 124 Ill.App.3d 329 (Ill. App. 1984) (reliance element in fraud claims; representations of law generally not actionable)
- Stichauf v. Cermak Road Realty, 236 Ill.App.3d 557 (Ill. App. 1992) (discoverability standard for misrepresentations; exclusive knowledge issue)
- O'Brien v. Noble, 106 Ill.App.3d 126 (Ill. App. 1982) (misrepresentation of fact vs. law; knowledge asymmetry)
- Citizens Savings & Loan Ass'n v. Fischer, 67 Ill.App.2d 315 (Ill. App. 1966) (piercing corporate veil factors; individual liability for fraud)
- Cosgrove Distributors, Inc. v. Haff, 343 Ill.App.3d 426 (Ill. App. 2003) (veil-piercing doctrine; unity of interests required)