2012 IL App (4th) 100956
Ill. App. Ct.2012Background
- Triple R and CB&K sued Golfview for default on a real estate contract and sought the $230,000 deposit.
- Contractual closing was set within 150 business days of May 7, 2007; Golfview deposited $230,000 as earnest money.
- Paragraph 5.A provided that the deposit would be non-refundable after due diligence unless the seller defaulted; Golfview could direct return during due diligence.
- Paragraph 10.F required Golfview to determine eligibility for tax credits; if not satisfied at closing, the contract could terminate with deposit refunds and no further liability, except surviving obligations.
- The trial court granted summary judgment for Triple R; Golfview appealed arguing entitlement to termination and deposit refund under 10.F(iii).
- The appellate court affirmed, holding Golfview had determined eligibility and that Triple R was entitled to the deposit; the case was remanded for attorney fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Golfview’s tax credit eligibility determination foreclosed closing. | Triple R argues eligibility determination required closing under 10.F. | Golfview contends lack of eligibility termination automatically refunds deposit. | No genuine issue; appellate court held Golfview determined eligibility and closing required. |
| Effect of the nonrefundable deposit provision after due diligence. | Deposit became nonrefundable after due diligence per 5.A. | Deposit should be refunded if closing fails due to Tax Credit eligibility. | Deposit was nonrefundable under 5.A, except for seller default; terms favored summary judgment for Triple R. |
| Whether summary judgment was proper given burden-shifting on affirmative defenses. | Golfview’s affirmative defense required proof that plaintiffs failed to negate eligibility. | Plaintiffs failed to negate Golfview’s defense; movant burden shifts upon production. | Summary judgment proper; Triple R produced evidence of eligibility assumptions and sale of credits, shifting burden to Golfview. |
| Whether the appraisal/assumptions about tax credits established as a matter of law Golfview’s eligibility. | Evidence showed Golfview’s eligibility to receive tax credits; trial court relied on appraisal. | Appraisal and pro forma were contested and not conclusive. | Record evidence supported eligibility as determined by Golfview and thus closing was proper. |
Key Cases Cited
- Bamberg v. Griffin, 76 Ill.App.3d 138 (1979) (earnest money as protection for seller; nonrefundable deposits; forfeiture careful scrutiny)
- Denis F. McKenna Co. v. Smith, 302 Ill.App.3d 28 (1998) (forfeiture not favored; justice for dissolution balanced when appropriate)
- West Suburban Mass Transit District v. Consolidated Rail Corp., 210 Ill.App.3d 484 (1991) (summary judgment burden of proof and production standards)
- General Motors Corp. v. Douglass, 206 Ill.App.3d 881 (1990) (burden of production on movant in summary judgment contexts)
- Purtill v. Hess, 111 Ill.2d 229 (1986) (evidence sufficiency and burdens in civil litigation)