Sienna Court Condominium Ass'n v. Champion Aluminum Corp.
2017 IL App (1st) 143364
| Ill. App. Ct. | 2017Background
- Sienna Court Condominiums suffered water-infiltration and related defects; the condominium association sued developer, general contractor Roszak/ADC, design firms, material suppliers (Champion, Wojan), and various subcontractors for breach of the implied warranty of habitability.
- Roszak (general contractor) filed Chapter 7 in 2009 and was administratively dissolved in 2010; the developer was insolvent/bankrupt; bankruptcy court later reopened Roszak’s case to allow the association to pursue insurance proceeds.
- Design firms (Wallin-Gomez, HMS, Matsen) and material suppliers were pleaded as having designed or supplied materials but not to have performed construction work on-site.
- Trial court dismissed the association’s implied-warranty claims against the three design firms (§2-615) and against material suppliers Champion and Wojan (primarily on statute-of-limitations §2-725 UCC and also for non-construction status). The court denied dismissal as to subcontractors, then certified Rule 308 questions about whether insurer or warranty-fund recovery constitutes “recourse.”
- Roszak later asserted counterclaims (breach, indemnity) against subcontractors/material suppliers; the trial court dismissed those counterclaims based on judicial estoppel and Roszak’s dissolved-LLC status; Roszak appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether implied warranty of habitability extends to design professionals who did not perform construction | Association: Minton-based public-policy protection should apply where builder is insolvent; design professionals contributed to latent defects | Design: Architects/engineers provide services, do not construct; precedent limits warranty to those who took part in construction | Held: Dismissal affirmed — warranty does not extend to design professionals who didn’t participate in construction (followed Park Point/Paukovitz principles). |
| Whether implied warranty extends to material suppliers (Champion, Wojan) who only supplied goods | Association: warranty should reach parties responsible for latent defects regardless of role | Suppliers: they merely supplied goods, did no construction; UCC §2-725 statute bars late claims | Held: Dismissal affirmed — material suppliers who did not take part in construction are not liable under the implied warranty; dismissal may also be affirmed on UCC statute of limitations. |
| Whether a plaintiff’s potential or actual recovery from insolvent builder’s insurance or warranty escrow (recourse) bars suit against subcontractors | Association: insolvency of developer/general contractor permits suit against subcontractors; insurance/warranty-fund recovery should not preclude subcontractor claims (Pratt III) | Subcontractors: Minton requires “no recourse” — potential insurer recovery or actual warranty-fund recovery provides recourse and bars claims against subcontractors | Held: Certified questions answered no — the controlling test is insolvency (Pratt III). Potential recovery from insurance or actual warranty-fund recovery does not, by itself, bar implied-warranty claims against subcontractors who participated in construction. |
| Whether dissolved Roszak had capacity to assert counterclaims after long delay (and whether judicial estoppel barred them) | Roszak: winding-up continues indefinitely under LLC Act; counterclaims were part of winding up | Counterdefendants: Roszak failed to disclose claims in bankruptcy (judicial estoppel); dissolution ended capacity to sue after a reasonable winding-up period | Held: Affirmed dismissal — Roszak lacked capacity as a dissolved LLC to assert counterclaims after the lengthy delay (court did not need to reach judicial estoppel or statute-of-limitations grounds). |
Key Cases Cited
- Minton v. Richards Group of Chicago, 116 Ill. App. 3d 852 (Ill. App. 1983) (extends implied warranty to subcontractor where builder-vendor is insolvent and purchaser has no recourse)
- Redarowicz v. Ohlendorf, 92 Ill. 2d 171 (Ill. 1982) (describes purposes and public-policy basis for implied warranty of habitability)
- Paukovitz v. Imperial Homes, Inc., 271 Ill. App. 3d 1037 (Ill. App. 1995) (supplier of plans/materials that performed no construction is not a builder-vendor for implied warranty)
- 1324 W. Pratt Condominium Ass’n v. Platt Constr. Group, Inc., 404 Ill. App. 3d 611 (Ill. App. 2010) (Pratt I; court’s broader Pratt line addressing subcontractor liability and the insolvency test)
- Dearlove Cove Condominiums v. Kin Constr. Co., 180 Ill. App. 3d 437 (Ill. App. 1989) (supports proceeding against subcontractor where general contractor becomes insolvent)
- Washington Courte Condominium Ass’n-Four v. Washington-Golf Corp., 150 Ill. App. 3d 681 (Ill. App. 1986) (interprets Minton exception where insolvency allegations were not supported)