Sienna Court Condominium Ass'n v. Champion Aluminum Corp.
2017 IL App (1st) 143364
Ill. App. Ct.2017Background
- Sienna Court Condominium Association sued for latent water and window/roof defects in a newly developed Evanston condominium project. The association purchased units from developer TR Sienna Partners; general contractor Roszak/ADC acted as the GC and later filed Chapter 7 and was administratively dissolved.
- Plaintiff alleged breach of the implied warranty of habitability against: design professionals (Wallin-Gomez, HMS, Matsen), material suppliers (Champion, Wojan), and several subcontractors (e.g., Stoltzner, Metalmaster, Lichtenwald, Tempco, Clearvisions).
- Design firms and material suppliers were alleged to have supplied plans/materials but not to have performed construction on site; some subcontractors performed construction work. Plaintiff pleaded developer/GC insolvency; plaintiff obtained some bankruptcy-court permission to pursue GC/developer insurance proceeds and recovered funds from a developer warranty escrow.
- Multiple defendants moved to dismiss: design firms under section 2-615; material suppliers and subcontractors raised UCC statute-of-limitations and Minton/Pratt precedent defenses; Roszak later asserted counterclaims but had been dissolved and had filed bankruptcy without disclosing potential counterclaims.
- The trial court dismissed the design defendants and material suppliers; denied dismissal as to subcontractors and certified four interlocutory questions about whether insurance proceeds or a recovered warranty fund constitute “recourse” under Minton; it also dismissed Roszak’s counterclaims. Appeals and a Rule 308 certified appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) May implied warranty of habitability be asserted against design professionals/material suppliers who did not perform construction? | Extend Minton to designers/suppliers because developer/GC insolvent; purchasers need remedy. | Design/material defendants say warranty applies only to those who participated in construction (builder-vendor/subcontractor). | No. Court affirmed dismissal: architects/engineers and mere material suppliers who did not take part in construction are not subject to the implied warranty. |
| 2) Does potential recovery from insolvent developer/GC insurance or a recovered warranty escrow fund constitute “recourse” that bars suit against subcontractors? | Plaintiff: insolvency permits suit; insurance/warranty fund do not defeat insolvency-based right to sue subcontractors. | Subcontractors: any potential recovery (insurance or escrow) gives "recourse" and thus precludes subcontractor liability under Minton. | No. Court follows Pratt III: insolvency of builder/GC is the controlling test; potential insurance recovery or warranty-fund recovery does not automatically bar claims against subcontractors. |
| 3) May a dissolved LLC (Roszak) assert counterclaims more than three years after administrative dissolution and bankruptcy without disclosure? | Roszak: winding up continues indefinitely; statute is silent so counterclaims permitted while winding up. | Counterdefendants: dissolution ended capacity to sue; judicial estoppel for failure to disclose in bankruptcy; UCC SOL for some claims. | No. Court affirmed dismissal: Roszak lacked legal capacity to assert counterclaims after prolonged dissolution; dismissal may be affirmed on that ground. |
| 4) Are plaintiff’s warranty claims against material suppliers time‑barred under UCC §2‑725? | Plaintiff: claims timely or warranty doctrine controls. | Suppliers: last deliveries occurred years earlier; UCC four‑year limitation bars claim. | Court affirmed dismissal as to material suppliers on the substantive ground they are not covered by the implied warranty; statute‑of‑limitations was an alternative basis affirmed where applicable. |
Key Cases Cited
- Redarowicz v. Ohlendorf, 92 Ill. 2d 171 (Ill. 1982) (explains public‑policy basis for implied warranty of habitability)
- Minton v. Richards Group of Chicago, 116 Ill. App. 3d 852 (Ill. App. Ct. 1983) (extended implied warranty to subcontractor where builder‑vendor dissolved and purchaser had no recourse)
- Paukovitz v. Imperial Homes, Inc., 271 Ill. App. 3d 1037 (Ill. App. Ct. 1995) (supplier of plans/materials that performed no construction is not a builder‑vendor for implied warranty)
- Washington Courte Condominium Ass’n-Four v. Washington-Golf Corp., 150 Ill. App. 3d 681 (Ill. App. Ct. 1986) (refused Minton exception where insolvency allegations were unsubstantiated)
- Dearlove Cove Condominiums v. Kin Construction Co., 180 Ill. App. 3d 437 (Ill. App. Ct. 1989) (allowed proceeding against subcontractor where action timely filed against general contractor before insolvency)
- Lehmann v. Arnold, 137 Ill. App. 3d 412 (Ill. App. Ct. 1985) (district decisions critical of extending implied warranty to subcontractors)
- Bernot v. Primus Corp., 278 Ill. App. 3d 751 (Ill. App. Ct. 1996) (rejected Minton in other districts)