2020 IL App (3d) 190083
Ill. App. Ct.2020Background
- RDC Case Creek Trails, LLC and Raufeisen Development Airport Properties, LLC (RDC) contracted with the Metropolitan Airport Authority of Rock Island County (Airport) and the City of Moline to develop airport property (hotel/conference center).
- The agreement contained an express warranty that the Airport was authorized to lease the property; that warranty was subject to a survival clause.
- The agreement also made RDC’s obligations contingent on obtaining debt/equity financing within 90 days and included a contractual notice-and-cure provision requiring 30 days’ written notice of default.
- The Airport alleged RDC failed to obtain financing, served a default notice in Aug. 2011, and terminated the agreement in Feb. 2012; RDC sued alleging breach of the Airport’s warranty (claiming FAA grant assurances restrained leasing).
- The trial court granted summary judgment to the Airport, holding RDC failed to give the contractually required notice before suing; RDC appealed.
- The appellate court reversed, holding that once the Airport terminated the contract the notice obligation (which did not survive termination) was excused as futile and RDC was not required to provide the contractual notice before filing suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RDC was required to give contractually mandated written notice of default before suing for breach of the Airport's warranty | Not required — contract was terminated so notice obligation ended; sending notice after termination would be futile | Required — notice prerequisite applies and Airport breached before termination so RDC should have notified first | Reversed trial court: notice not required after termination; giving notice would have been futile; summary judgment for Airport on notice was error |
| Whether prior trial-court rulings that the parties’ obligations ceased upon termination control | RDC: earlier rulings correctly found obligations ended and support RDC’s position | Airport: earlier interlocutory rulings are not binding and summary judgment properly decided notice issue | Appellate court found the court’s earlier reasoning persuasive and concluded obligations ceased at termination; reversed summary judgment for Airport |
Key Cases Cited
- Thompson v. Gordon, 241 Ill. 2d 428 (2011) (contract language controls and must be given effect)
- Hall v. Henn, 208 Ill. 2d 325 (2003) (summary judgment reviewed de novo)
- William Blair & Co. v. FI Liquidation Corp., 358 Ill. App. 3d 324 (2005) (cross-motions for summary judgment decide legal questions when facts undisputed)
- First Illini Bank v. Wittek Industries, Inc., 261 Ill. App. 3d 969 (1994) (demand excused where it would be futile)
- Kemner v. Monsanto Co., 112 Ill. 2d 223 (1986) (interlocutory orders may be modified before final judgment)