Sienna Court Condominium Association v. Champion Aluminum Corporation
2017 IL App (1st) 143364
| Ill. App. Ct. | 2017Background
- Sienna Court Condominium Association sued alleging latent defects (windows, roofs) in a condominium development; developer (TR Sienna) and general contractor Roszak/ADC filed for bankruptcy and were dissolved.
- Plaintiff pleaded breach of the implied warranty of habitability against design professionals (architects/engineers), subcontractors, and material suppliers; plaintiff sought recovery partly asserting developer/GC insolvency.
- Design defendants (Wallin-Gomez, HMS, Matsen) moved under §2-615; material suppliers (Champion, Wojan) moved under §2-619 asserting UCC statutes of limitation and lack of builder-vendor status.
- Subcontractors moved to dismiss, arguing Minton’s “no recourse” rule barred suits where plaintiff had recourse (insurance, warranty escrow); trial court denied and certified Rule 308 questions about recourse/insolvency.
- Roszak (dissolved LLC) later asserted counterclaims against subcontractors; trial court dismissed those counterclaims (judicial estoppel and other grounds); Roszak appealed the dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether implied warranty of habitability extends to design professionals who did not perform construction | Warranty should extend because developer/GC insolvent; plaintiff has no adequate recourse | Design professionals are not builder-vendors and did not perform construction; warranty doesn’t apply | Dismissal affirmed: architects/engineers who only designed and did not participate in construction are not subject to implied warranty (affirming Park Point reasoning) |
| Whether implied warranty extends to material suppliers who only supplied goods | Warranty should apply given developer/GC insolvency | Suppliers did not perform construction and are not builder-vendors; UCC statute of limitations also bars claims | Dismissal affirmed: material suppliers that did not take part in construction are not liable under implied warranty; court affirmed dismissal on status ground (no need to reach UCC defense) |
| Whether potential recovery from developer/GC insurance or actual recovery from a warranty escrow fund constitutes "recourse" that bars suit against subcontractors under Minton | Insurers or warranty fund provide recourse, so Minton exception shouldn’t apply; subcontractors should be protected | Even with potential insurance or fund recovery, the key test is insolvency of builder/GC; recourse inquiry is uncertain | Certified questions answered NO: Illinois precedent (Pratt line) makes insolvency—not availability of insurance or escrow recovery—the determinative test for suing subcontractors; potential or actual recovery from insurer/escrow does not automatically bar suit against subcontractors |
| Whether a dissolved LLC (Roszak) retained capacity to bring counterclaims >3 years after administrative dissolution | Roszak contends winding-up has no explicit temporal limit under LLC Act; counterclaims were part of winding up | Defendants argue dissolved LLC lost capacity to assert new claims years after dissolution | Dismissal affirmed: Roszak lacked legal capacity to assert counterclaims after prolonged dissolution; winding-up rights are limited to a reasonable time and Roszak’s multi-year delay was unreasonable |
Key Cases Cited
- Minton v. The Richards Group of Chicago, 116 Ill. App. 3d 852 (Ill. App. 1st Dist.) (extends implied warranty to subcontractor where builder-vendor is insolvent and purchaser has no recourse)
- Redarowicz v. Ohlendorf, 92 Ill. 2d 171 (Ill. 1982) (establishes implied warranty of habitability policy rationale)
- Paukovitz v. Imperial Homes, Inc., 271 Ill. App. 3d 1037 (Ill. App. 3d Dist.) (supplier of plans/materials who did no construction is not a builder-vendor for implied warranty)
- Dearlove Cove Condominiums v. Kin Construction Co., 180 Ill. App. 3d 437 (Ill. App. 1989) (reinforces Minton principle allowing suit against subcontractor when builder-vendor becomes insolvent)
- Washington Courte Condominium Ass’n-Four v. Washington-Golf Corp., 150 Ill. App. 3d 681 (Ill. App.) (refused Minton exception where insolvency allegation was unsupported)