BOARD OF MANAGERS OF PARK POINT AT WHEELING CONDOMINIUM ASSOCIATION v. PARK POINT AT WHEELING, LLC, еt al.
No. 1-12-3452
Appellate Court of Illinois, First District, Fourth Division
December 31, 2015
2015 IL App (1st) 123452
PRESIDING JUSTICE McBRIDE
FOURTH DIVISION
December 31, 2015
No. 1-12-3452
BOARD OF MANAGERS OF PARK POINT AT WHEELING
CONDOMINIUM ASSOCIATION,
Plaintiff-Appellant,
v.
PARK POINT AT WHEELING, LLC, S.M. SMITH AND SONS, INC.
d/b/a SMITH AND SONS, INC., SMITH FAMILY CONSTRUCTION,
INC., HIRSCH AND ASSOCIATES, LLC, MIDWEST MASONRY,
INC., G.W. THIEL, INC., VIVIAN J. SMITH, SILVERLINE
BUILDING PRODUCTS CORPORATION, and THERMOLOCK
MANUFACTURING, LLC,
Defendants-Appellees.
) Appeal from
) the Circuit Court
) of Cook County
)
) 08-L-09404
) Honorable
) Lynn M. Egan,
) Judge Presiding
PRESIDING JUSTICE McBRIDE delivered the judgment of the court, with opinion.
Justice Palmer and Justice Gordon concurred in the judgment and opinion.
OPINION
¶ 1 This interlocutory appeal concerns the dismissal of claims that various parties involved in the design, construction, and sale of a condominium complex that was completed in 2004 breached the implied warranty of habitability by incorporating latent defects into the units and common elements. The implied warranty regarding latent defects in new construction is generally imposed against builders or builder-sellers only and the trial court found that the homeowners’ group, Board of Managers of Park Point at Wheeling Condominium Association, failed to state a claim against the project architect, Hirsch and Associates, LLC (Hirsch). The condominium association asks us to recognize a claim against the architect by extending Minton v. The Richards Group of Chicago, 116 Ill. App. 3d 852, 452 N.E.2d 835 (1983), in which the court extended the implied warranty to a subcontractor because the buildеr-seller was judgment-
¶ 2 The condominium project at issue is known as Park Point at Wheeling and consists of three midrise buildings and 128 units situated on almost six acres of land at 620, 640, and 660 McHenry Road. The architect‘s plans for the condominium complex were completed in approximately 2000 and construction of the buildings was completed between 2001 and 2004. The architect is not alleged to have taken part in the construction or sale of the units.
¶ 3 The condominium association filed suit in 2008 and after a series of amendments culminating in a sixth amended cоmplaint filed in 2011, asserted a total of eight claims against architect Hirsch; the project‘s developer-seller, Park Point at Wheeling, LLC; the original and successor general contractors, S.M. Smith & Sons, Inc., d/b/a Smith & Sons and Smith Family Construction, Inc. (collectively Smith); the carpentry subcontractor, G.W. Thiel, Inc. (G.W. Thiel); the masonry subcontractor, Midwest Masonry, Inc. (Midwest); the window and patio door manufacturers; and their agents. Parties that we have not identified by name were either dismissed by court order or settlement agreement and are not participating in this interlocutory appeal. Counts II and III are the implied warranty of habitability claims and are the only counts at issue here. Count II was directed at the developer-seller. Count III concerned the architect and the other defendants.
¶ 4 The condominium association complained that water and air infiltration was damaging interior flooring and finishes. The association attributed the infiltration to latent defects in the
¶ 5 The trial court orders dismissing the implied warranty of habitability claims pursuant to sections 2-615 and 2-619(a) of the Code of Civil Procedure (Code) allow for this interlocutory appeal pursuant to Supreme Court Rule 304(a).
¶ 6 Turning first to the dismissal of the claim against the architect, we offer the following overview of the law. We note that the theory of implied warranty of habitability in construction arose because the application of the common law principles of caveat emptor and merger meant that a disappointed new home buyer had little or no recourse against a builder that erected a defective residence. Petersen v. Hubschman Construction Co., 76 Ill. 2d 31, 38, 389 N.E. 1154, 1179 (1979). Historically, a new home buyer took the property at his own risk and if he failed to discover defects before the transfer, caveat emptor prevented him from maintaining a suit against the builder. Petersen, 76 Ill. 2d at 38, 389 N.E.2d at 1179. Similarly, under the merger doctrine, all agreements between a new home seller and buyer merged in the deed and if the document did
¶ 7 The doctrine of caveat emptor, however, is based on an expectation that buyer and seller possess comparable skill and experience and engage in an arm‘s length transaction. Tuck v. Downing, 76 Ill. 71, 93 (1875) (“The parties were dealing at arm‘s length and on equal grounds, and their own judgments were to be their guide in coming to a conclusion.“). Implying a warranty of habitability into the contract for the sale of a new residence was a judicial response to the fact that in the twentieth century, new home buyers and sellers were no longer in an equal bargaining position. Caveat emptor fell out of favor as home building methods and governmental regulations became more complex, builders grew in scale and became specialized, and the ordinary home buyer no longer had the skill or training to make a meaningful inspection and discover latent defects. Tavares v. Horstman, 542 P.2d 1275 (Wyo. 1975).
¶ 8 Our supreme court has cited three public policy reasons for adopting the implied warranty of habitability doctrine in this jurisdiction: (1) the modern home buyer is unusually dependent upon the competency and honesty of the builder rather than on thе buyer‘s own ability to discern latent defects, (2) the buyer is making the largest single investment of his or her life, and, (3) in fairness, the repair costs of defective construction should be borne by the builder-seller who created the latent defects. 1324 W. Pratt Condominium Ass‘n v. Platt Construction Group, Inc., 404 Ill. App. 3d 611, 616-17, 936 N.E.2d 1093, 1098 (2010) (Pratt I).
¶ 9 To avoid the merger doctrine, the implied warranty has been treated as an independent undertaking to the covenant to convey and one that survives the delivery of the deed. Redarowicz v. Ohlendorf, 92 Ill. 2d 171, 182, 441 N.E.2d 324, 329 (1982); Petersen, 76 Ill. 2d at 41, 389 N.E.2d at 1158.
¶ 11 The new home buyer has a right to expect to receive what was bargained for and what the builder-seller agreed to construct and convey, which is a house that is reasonably fit for its intended use as a residence. Petersen, 76 Ill. 2d at 40, 389 N.E.2d at 1158. The trial court ruled, and the supreme court agreed, that Petersen‘s builder-seller did not substantially perform the contract, could not declare a forfeiture, and had to return the earnest money and the value of labor and materials that were contributed by the buyers. Petersen, 76 Ill. 2d at 35, 389 N.E.2d at 1155-56.
¶ 12 Since then, the class of defendants who impliedly warrant the habitability of their construction work has expanded only somewhat from the builder-sellers of new homes. For instance, in Tassan, the court applied the doctrine to the developer-seller of a new condominium unit. Tassan v. United Development Co., 88 Ill. App. 3d 581, 410 N.E.2d 902 (1980). The court reiterated that the fundamental reason for imposing the implied warranty regarding construction work is the unusual dependency of the buyer/homeowner:
“Purchasers from a builder-seller depend on his ability to construct and sell a home of
¶ 13 In Herlihy, the implied warranty was applied to a developer-seller with respect to construction defects in common elements of a new condominium complex (Herlihy v. Dunbar Builders Corp., 92 Ill. App. 3d 310, 415 N.E.2d 1224 (1980)), and in VonHoldt, the court extended the doctrine to a contractor that created latent defеcts by disregarding the architect‘s plans for constructing a multilevel home addition which increased the size of the original residence by almost 40% (VonHoldt v. Barba & Barba Construction, Inc., 175 Ill. 2d 426, 677 N.E.2d 836 (1997)).
¶ 14 We point out that regardless of the exact role the defendant played in each of these projects, the implied warranty of habitability claim centered on the quality of construction work. Regardless of whether a new property is a single family home, a condominium unit, or a major addition, the ordinary person is not knowledgeable of contemporary construction practices and must to a substantial degree rely on the integrity and skill of the builder or on the entity that has chosen the builder. Petersen, 76 Ill. 2d at 40, 389 N.E.2d at 1158 (“In most instances, the latent defects would not be discoverable by a [buyer] whether the house is complete or incomplete at the time the contract is entered into.“); Herlihy, 92 Ill. App. 3d at 315, 415 N.E.2d at 1227
¶ 15 Thus, generally speaking, only builders or builder-sellers warrant the habitability of their construction work. Engineers and design professionals such as the Hirsch architectural firm provide a service and do not warrant the accuracy of their plans and specifications. 5 Phillip L. Bruner & Patrick J. O’Connor, Jr., Bruner & O’Connor on Construction Law § 17:24 (2002) (discussing warranty liability of design professional); Sam A. Mackie, Architect’s Negligence, 33 Am. Jur. Proof of Facts 3d 57, § 5 (1995) (“[A]bsent an express contractual provision to the contrary, an architect does not guarantee the owner a perfect plan or a satisfactory result. The architect is not liable for mere errors of judgment, and liability attaches only when the architect‘s conduct falls below the standard of skill and care exercised by others engaged in the same profession, and in the same locality.“).
¶ 16 In fact, breach of implied warranty of habitability claims against design prоfessionals have already been rejected in Illinois and most other jurisdictions. For instance, in Paukovitz, a new homeowner in Marseilles, Illinois, sued the designer of his residence for breach of the implied warranty of habitability after discovering that his home suffered from structural damage because the basement walls were inadequately supported. Paukovitz v. Imperial Homes, Inc., 271 Ill. App. 3d 1037, 659 N.E.2d 473 (1995). The home was built into a hillside and situated so that the basement door would be at ground level. Paukovitz, 271 Ill. App. 3d at 1038, 659 N.E.2d at 474. The home designer had sold the plans as well as some of the home‘s shell materials to the builder. Paukovitz, 271 Ill. App. 3d at 1038, 659 N.E.2d at 475. The trial court dismissed the
“It is undisputed that [the designer] Imperial did no construction work on Paukovitz’ home. It only supplied the shell materials and the plans which [the builder] Vignali then used to construct the residence. The parties do not cite, and we are unable to find, any reported cases in which a court held that the supplier of plans and shell materials was a builder-vendor for the purposes of the implied warranty of habitability. Moreover, in every case cited by Paukovitz to support his contention that Imperial was the builder-vendor, the defendant had conducted some kind of construction work on the home in question. Inasmuch as Imperial did not contribute to the actual construction of Paukovitz’ home, we find that it was not a builder-vendor which could be held liable for the breach of the implied warranty of habitability.” Paukovitz, 271 Ill. App. 3d at 1039, 649 N.E.2d at 475.
¶ 17 Other jurisdictions that have addressed this issue have also concluded that a design professional may not be sued under an implied warranty theory for providing professional services. Furthermore, the principle that an architect does not warrant or guarantee perfection in his or her plans and specifications is a long standing principle. More than a 100 years ago, in a payment dispute, a Michigan defendant argued that his building costs had been increased by flawed рlans and specifications and that the architect‘s compensation should be reduced accordingly. Chapel v. Clark, 76 N.W. 62, 62 (Mich. 1898). The Michigan Supreme Court surveyed other jurisdictions and held that the law does not imply a warranty or guarantee of perfection in architectural work. Chapel, 76 N.W. at 62. An architect is expected to exercise only
¶ 18 In a contemporary Wyoming case, an architectural firm sued an engineering firm, arguing that the engineer impliedly agreed to provide a ” ‘useful’ ” and “’ workable’ ” heating, ventilation, and air conditioning system for a new building in Cheyenne. Kemper Architects, P.C. v. McFall, Konkel & Kimball Consulting Engineers, Inc., 843 P.2d 1178, 1186 (Wyo. 1992). The court disagreed, stating simply that the “implied warranty of fitness for a particular purpose is applicable to contracts for the sale of goods, not for professional services.” Kemper Architects, 843 P.2d at 1186. “An engineer, or any other so-called professional, does not ‘warrant’ his service or the tangible evidence of his skill to be ‘merchantable’ or ‘fit for an intended use.’ These are terms uniquely applicable to goods. Rather, *** the engineer оr architect ‘warrants’ that he will or has exercised his skill according to a certain standard of care, that he acted reasonably and without neglect.” Kemper Architects, 843 P.2d at 1186.
¶ 19 Similarly, in Minnesota, where an addition to a municipal building allowed water to seep into the basement, the city filed various claims against the architect. City of Mounds View v. Walijarvi, 263 N.W.2d 420 (Minn. 1978). The Minnesota supreme court disposed of the claims that relied on implied warranty/strict liability (City of Mounds View, 263 N.W.2d at 423), and instead followed the traditional rule that imposes liability on architects and other professional service providers only where professional negligence is proved. City of Mounds View, 263 N.W.2d at 425. Contrary to the current appellant‘s argument, the court distinguished the architect‘s role from that of the home‘s builder or contractor:
” ‘In an examination of the merits of the controversy between these parties, we must bear in mind that the (architect) was not a contractor who had entered into an agreement
¶ 20 The Minnesota Supreme Court characterized the efforts of architects and engineers as “inexact sciences:”
“The reasoning underlying the general rule as it applies both to architects and other vendors of professional services is relatively straightforward. Architects, doctors, engineers, attorneys, and others deal in somewhat inexact sciences and are continually called upon to exercise their skilled judgment in order to anticipate and provide for random factors which are incapable of precise measurement. The indeterminable nature of these factors makes it impossible for professional service people to gauge them with complete accuracy in every instance. Thus, doctors cannot promise that every operation will be successful; a lawyer can never be certain that a contract he drafts is without latent ambiguity; and an architect cannot be certain that a structural design will interact with natural forces as anticipated. Because of the inescapable possibility of error which inheres in these services, the law has traditionally required, not perfect results, but rather the exercise of that skill and judgment which can be reasonably expected from similarly
***
We have reexamined our case law on the subject of professional services and are not persuaded that the time has yet arrived for the abrogation of the traditional rule. Adoption of the city‘s implied warranty theory would in effect impose strict liability on architects for latent defects in the structures they design. That is, once a court or jury has made the threshold finding that a structure was somehow unfit for its intended purpose, liability would be imposed on the responsible architect in spite of his diligent application of state-of-the-art design techniques. If every facet of structural design consisted of little more than the mechanical application of immutable physical principles, we could accept the rule of strict liability which the city proposes. But even in the present state of relative technological enlightenment, the keenest engineering minds can err in their most searching assessment of the natural factors which determine whether structural components will adequately serve their intended purpose. Until the random element is eliminated in the application of architectural sciences, we think it fairer than the purchaser of the architect‘s services bear the risk of such unforeseeable difficulties.” City of Mounds View, 263 N.W.2d at 424.
¶ 21 Similar reasoning was applied in Board of Trustees of Union College v. Kennerly, Slomanson & Smith, 400 A.2d 850 (N.J. Super. Ct. Law Div. 1979), in which a New Jersey college sued аn architectural and engineering firm, claiming that the engineer impliedly warranted that a design for a lighting system for a parking lot would be reasonably fit for its intended use. The court rejected this argument, noting that a majority of jurisdictions have refused to extend the implied warranty theory to the performance of architectural and
¶ 22 Thus, two principles become clear from the case law. First, the implied warranty of habitability of construction is traditionally applied tо those who engage in construction. Second,
¶ 23 Nonetheless, the condominium association argues for a different result and contends it was error for the trial court to dismiss the amended claim against the architect. A motion to dismiss pursuant to section 2-615 of the Code of Civil Procedure (
¶ 25 This reasoning, however, oversimplifies Minton, misstates the status of Paukovitz, and glosses over the distinctions between the tasks that are undertaken by architects and contractors.
¶ 26 In Minton, the implied warranty of habitability was extended to a painting subcontractor which caused the alleged latent defect of peeling paint and where the buyers had no recourse against the insolvent builder-seller. Minton, 116 Ill. App. 3d 852, 452 N.E.2d 835. Paint on the windows and eaves had begun to peel within 90 days of the buyer taking possession. Minton, 116 Ill. App. 3d at 853, 452 N.E.2d at 836. Prior to the builder-seller‘s dissolution, the buyers asked the builder-seller to correct the problem, but no repairs were attempted. Minton, 116 Ill. App. 3d at 854, 452 N.E.2d at 837. Because the builder-seller was insolvent, the buyers filed a breach of implied warranty claim against the painting subcontractor, which was a firm that the builder-seller had chosen and supervised. Minton, 116 Ill. App. 3d at 853-54, 452 N.E.2d at 835-36. The
¶ 27 In our opinion, however, Minton is properly limited to subcontractors such as the painting firm in Minton that have helped with the physical construction or the construction-sale of the property. The court emphasized that the implied warranty of habitability of construction arises between the builder-seller and the buyer because of their “unusual dependent relationship.” Minton, 116 Ill. App. 3d at 854, 452 N.E.2d at 836. Property buyers such as the plaintiffs in Minton “depend upon [the builder-seller‘s] ability to construct and sell a home of sound structure and his ability to hire subcontractors capable of building a home of sound structure.” Minton, 116 Ill. App. 3d at 854, 452 N.E.2d at 837. The role that the Hirsch architectural firm had in erecting the subject condominiums did not create a dependent relationship with the buyers like the one that existed in Minton. The fact that the builders of the subject condominium complex are now alleged to be insolvent does not justify expanding Minton‘s holding to an entirely different category of defendant. There is no allegation that this architect took part in the construction or the construction-sale of real property and therefore, we find that this architect should not be subject to the implied warranty of habitability of construction. Furthermore, Paukovitz is still good law. That case indicates the implied warranty at issue concerns the quality of construction work and shifts the expense of repairing latent defects from the unsophisticatеd home buyer to those who, in some way, “contribute to the actual construction of [the] home.” Paukovitz, 271 Ill.
¶ 28 The condominium association is mistaken when it contends architects and builders are similar because their work results in a tangible structure and that both architects and builders are already subject to the implied obligation to perform their tasks in a “workmanlike” manner.
¶ 29 Architects are professionals who design and create plans and specifications for the construction of buildings or structures. Sam A. Mackie, Architect’s Negligence, 33 Am. Jur. Proof of Facts 3d 57, § 5 (1995) (generally defining the work of an architect). Carvalho v. Toll Brothers & Developers, 651 A.2d 492 (N.J. Super. Ct. App. Div. 1995) (referring to architects and engineers who prepare plans and specification for construction as “professionals“). In contrast, home builders are responsible for the physical implementation of the architect‘s plan. They are project managers and possibly tradesmen who are respоnsible for the overall coordination of a construction project and for the provision of all material, labor and equipment necessary for the construction of a structure. Description of “General Contractor,” Wikipedia, https://en.wikipedia.org/wiki/General_contractor (last visited June 16, 2015). See also Calloway v. Bovis Lend Lease, Inc., 2013 IL App (1st) 112746, ¶ 3, 995 N.E.2d 381 (“In its capacity as construction manager, Bovis was responsible for coordinating day-to-day activities on the project, including the work of all contractors and subcontractors.“). Therefore, it is not the architect–it is the builder–who physically constructs property.
¶ 30 Also, architects are not workmen and they are not obligated to perform their professional services in a “workmanlike manner.” A workman is a person “who labors” or is “employed in manual labor, skilled or unskilled.” Black‘s Law Dictionary 1780 (4th ed. 1957). The term “workmen” does not include professional persons. In re Paradise Catering Corp., 36 F. Supp.
¶ 31 Architects are not like the builders, the builder-sellers, or the developer-seller to whom the implied warranty of habitability of constructiоn has been applied and it would be a considerable extension of the law for this court to recognize the claim at issue on appeal. Having reviewed the facts of this case and the legal principles that govern it, we are not persuaded that the architectural firm which took no part in constructing or selling the condominium complex in Wheeling should be subject to the implied warranty of habitability of construction. We decline to recognize the condominium association‘s “Minton claim” against the Hirsch architectural firm. We conclude that the condominium association did not factually state a viable cause of action against Hirsch in count III of its complaint and we affirm the trial court‘s ruling in Hirsch‘s favor.
¶ 32 We next address the trial court‘s dismissal of implied warranty of habitability claims that were filed against the other appellees: the developer (count II), the original and successor general contractors, the masonry subcontractor, and the carpentry subcontractor (count III). The сourt granted the dismissal for several reasons, including that the record demonstrated that each purchase agreement executed for the condominium units conspicuously disclaimed implied warranties on behalf of the developer-seller and its agents. The condominium association argues the ruling was in error because the disclaimer language in the purchase agreement was not called to the buyers’ attention or worded properly and the seller did not show the court each and every purchase agreement.
¶ 33 A section 2-619 motion to dismiss admits the legal sufficiency of the plaintiff‘s claim but asserts certain defects or defenses outside the pleading that defeat the claim. Patrick Engineering, Inc. v. City of Naperville, 2012 IL 113148, ¶ 31, 976 N.E.2d 318. Specifically,
¶ 34 Our supreme court has indicated that even though the implied warranty of habitability came into being as a matter of public policy, buyers may waive that protection. Petersen, 76 Ill. 2d at 43, 389 N.E.2d at 1159. However, a builder-seller‘s attempt to disclaim the implied warranty will be strictly construed against that party. Petersen, 76 Ill. 2d at 43, 389 N.E.2d at 1159.
¶ 35 A waiver is an intentional relinquishment of a known right and cannot occur through mistake or misapprehension of fact. Breckenridge v. Cambridge Homes, Inc., 246 Ill. App. 3d 810, 817, 616 N.E.2d 615, 619 (1993). An effective waiver in this context is one that is a conspicuous part of the parties’ agreement, refers to the warranty of habitability by name, and discloses the consequences of its inclusion. Petersen, 76 Ill. 2d at 43, 389 N.E.2d at 1159 (adopting the warranty of habitability of construction work and stating in dicta that the warranty could be disclaimed if certain criteria were met); Breckenridge, 246 Ill. App. 3d at 817, 616 N.E.2d at 619 (applying the three criteria suggested by Petersen); Board of Managers of the Village Centre Condominium Ass‘n v. Wilmette Partners, 198 Ill. 2d 132, 138, 760 N.E.2d 976, 980 (2001) (adding the element that an effective waiver is one that expressly disclaims the warranty of habitability and that it is ineffective to substitute terms from the Uniform Commercial Code such as “fitness for a particular purpose“). Our supreme court has declined to adopt or recommend a model disclaimer and indicated that each case is fact specific. Village Centre Condominium Ass‘n, 198 Ill. 2d at 141, 760 N.E.2d at 981.
¶ 37 The Condominium Purchase Agreement at issue here consists of 10 pages of typewritten text and 6 pages of attached exhibits. There are 28 paragraphs in the agreement. The warranty language appears in paragraph 8, as follows:
“8. Warranties. At Closing, Seller shall deliver to Purchaser, and Purchaser shall acknowledge receipt of, a Certificate of Warranty with respect to the Purchased Unit in the form of Exhibit C attached hereto and made a part hereof. EXCEPT AS EXPRESSLY PROVIDED HEREIN, SELLER HEREBY EXCLUDES ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED (INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, HABITABILITY, OR FITNESS FOR A PARTICULAR PURPOSE), WARRANTIES FOR CONSUMER PRODUCTS UNDER MAGNUSON-MOSS WARRANTY ACT WITH RESPECT TO THE PURCHASED UNIT AND COMMON ELEMENTS. BY PURCHASER‘S EXECUTION OF THIS PURCHASE AGREEMENT, PURCHASER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD THE CERTIFICATES [sic] OF WARRANTY ATTACHED AS EXHIBIT [C] HERETO
AND THAT THERE ARE NO WARRANTIES OF ANY KIND MADE HEREIN WITH RESPECT TO DEFECTS IN CONSTRUCTION OF THE PURCHASED UNIT AND COMMON ELEMENTS EXCEPT FOR WARRANTIES MADE IN SAID CERTIFICATES OF WARRANTY. ANY LIABILTIES AND OBLIGATIONS OF SELLER (AND ITS OWNERS, OFFICERS, AGENTS, AND OTHER REPRESENTATIVES) UNDER OR WITH RESPECT TO WARRANTIES HEREUNDER OF THE TRANSACTION HEREIN CONTEMPLATED, SHALL NOT EXCEED THE COST OF REPLACEMENT OF THE SUBJECT ITEM, AND SHALL IN NO EVENT GIVE RISE TO ANY LIABLITY OR OBLIGATION FOR ANY INCIDENTAL, CONSEQUENTIAL OR SIMILAR DAMAGES, PURCHASER ACKNOWLEDGES THAT HE IS (THEY ARE) BUYING THE PURCHASED UNIT, RIGHTS APPURTENANT THERETO IN OTHER PROPERTY, AND PERSONAL PROPERTY TO BE CONVEYED, ALL WITHOUT WARRANTY OR REPRESENTATION OF ANY KIND, EXPRESS OR IMPLIED, BY SELLER OR ANY OFFICER, EMPLOYEE, AGENT, BROKER, OR OTHER REPRESENTATIVE OF SELLER, OTHER THAN THAT SET FORTH ABOVE. Purchaser waives all rights against Seller, under any legal theory and whenever arising, based in whole or part on conditions not warranted, or for damages hereby excluded. This paragraph may not be modified by any method (including, without limitation, oral representation of course of conduct [(sic)] other than a written instrument executed on behalf of Seller by its officers or attorneys, and Purchaser understands that no other party is or will be authorized so the [(sic)] execute such an instrument.”
¶ 39 An affidavit executed by Vivian J. Smith indicates she holds a management position with Park Point at Wheeling, LLC, which was the developer-seller of the condominium units, and that she is knowledgeable about the 96 condominium sales that occurred between 2001 and 2004. Ms. Smith swore that each buyer executed the Condominium Purchase Agreement and Certificate of Limited Warranty and that the developer-seller did not allow any buyer to modify the warranty disclaimer terms.
¶ 41 The condominium board misapprehends the governing standards when it argues (1) it was the developer-seller‘s policy and practice not to specifically point out the disclaimer to buyers before they executed the contract and (2) that the affidavit of Robert Yedinak, who is a unit owner and the president of the condominium association, indicates, “At no time did anyone on behalf of seller inform me [of the disclaimer in the purchase agreement].” A seller is not required to specifically point out a disclaimer in a written contract. In Illinois, a disclaimer of the warranty of habitability is effective if it is a conspicuous part of the contract, refers to the warranty by name, and uses plain language that fully discloses the consequences of its inclusion. Petersen, 76 Ill. 2d at 43, 389 N.E.2d at 1159; Breckenridge, 246 Ill. App. 3d at 821, 616 N.E.2d
¶ 42 The condominium association misconstrues the significance of Colsant, in which the builder-seller argued in part that language in its express warranty also curtailed the scope of the implied warranty. Colsant v. Goldschmidt, 97 Ill. App. 3d 53, 55, 421 N.E.2d 1073, 1075 (1981). The builder-seller was relying on a sentence which stated, ” ‘Builder does not assume responsibility for any secondary or consequential damages caused by any defects.’ ” Colsant, 97 Ill. App. 3d at 54, 421 N.E.2d at 1075. The court rejected the seller‘s arguments, because its disclaimer was a single sentence, in regular font, buried in the midst of 65 paragraphs, it did not explain the purported consequences of accepting the terms, it was worded broadly, and it did not refer to any particular warranty. Colsant, 97 Ill. App. 3d at 57, 421 N.E.2d at 1077. In other words, it failed because it did not meet any of the established criteria. We do not read Colsant to mean that a builder-seller is required to call the buyer‘s attention to its disclaimer language.
¶ 43 The condominium association next cites Chestnut Hills for the proposition that unless a buyer separately initials a disclaimer, the disclaimer is not enforceable as a matter of law. Board of Managers of Chestnut Hills Condominium Ass‘n v. Pasquinelli, Inc., 354 Ill. App. 3d 749, 822 N.E.2d 12 (2004). This, however, is a misinterpretation of the court‘s holding regarding a disclaimer that did not meet all of the established criteria, in that it failed to set out the consequences of waiving the implied warranty of habitability. Chestnut Hills, 354 Ill. App. 3d at 758, 822 N.E.2d at 19; Petersen, 76 Ill. 2d at 43, 389 N.E.2d at 1159 (requiring in part that a purported waiver of the implied warranty of habitability disclose the consequences of the waiver). The court pointed out this defect and also contrasted the circumstances with what had
¶ 44 Despite the appellant‘s argument, we find that that the seller of the condominiums at issue was not required to verbally call the warranty disclaimer to each buyer‘s attention or obtain each buyer‘s initials next to it. We also find that the disclaimer, set out above, does in fact meet the Petersen and Breckenridge criteria of an effective disclaimer, in part because it was brought to each buyer‘s attention by being conspicuous within the parties’ contract.
¶ 45 The condominium association also argues the trial court should not have allowed the appellees to prevail on their affirmative defense of waiver without requiring them to tender each and every executed purchase agreement and warranty certificate. The condominium association contends each contract is important because the buyers own undivided interests in the common elements, and, thus, even a single buyer could recover the costs of repairing material defects in all the common elements. Tassan, 88 Ill. App. 3d at 594-95, 410 N.E.2d at 913. The record, however, includes the affidavit of Ms. Smith, who swore that the form contract attached to the condominium association‘s complaint was signed by each purchaser. Ms. Smith made a similar statement about the warranty certificate exemplar that was tendered with the complaint. She alsо specified that no revisions were permitted by any party to the warranty provision. The condominium association did not counter Ms. Smith‘s affidavit with any contrary facts. When a supporting affidavit has not been refuted by a counter-affidavit or other appropriate means, the facts in that supporting affidavit are deemed admitted. Zedella v. Gibson, 165 Ill. 2d 181, 185, 650 N.E.2d 1000, 1002 (1995). Therefore, the record shows that the waiver applies equally to the unit owners and precludes the possibility that there is a different version of the documents which
¶ 46 Accordingly, we affirm the trial court‘s dismissal of the developer-seller, PPW, from these proceedings.
¶ 47 The condominium board next argues that for public policy reasons, Pratt II dictates that the disclaimer should be applied only to the developer-seller that executed it and should not be extended to other parties such as the project‘s general contractor or subcontractors. Pratt II, 2012 IL App (1st) 111474, 974 N.E.2d 279. This argument is unpersuasive. The decision the condominium board relies on, Pratt II, was based on contract language which clearly limited the disclaimer to thе seller. The court did not, as the condominium association claims, reach that conclusion in order to protect the buyers and implement the public policy underlying the implied warranty of habitability of construction. In fact, the court initially noted that ” ‘a knowing
¶ 48 Thus, the question becomes whether the wording of the purchase agreement for the condominium units at Park Point at Wheeling encompassed all the defendants when it disclaimed the implied warranty on behalf of the “SELLER (AND ITS OWNERS, OFFICERS, AGENTS, AND OTHER REPRESENTATIVES).” The contract defines seller as “Park Point at Wheeling, L.L.C.,” but does not define officers, agents or othеr representatives. The trial court concluded that Smith, the general contractor, was an agent or representative of the developer-seller, based on the condominium association‘s allegations in paragraphs 5 and 17 of count III (the “Minton claim“) that Smith “provided development services” and “held itself out to prospective buyers as a knowledgeable developer and contractor regarding the sale of Condominium.”
¶ 49 However, these are not allegations that Smith was an agent or representative of the developer-seller. An agency is a fiduciary relationship in which the principal has the right to control the agent‘s conduct and the agent has the power to act on the principal‘s behalf. Amcore
¶ 51 In summary: the dismissal of count II as to developer PPW is affirmed; the dismissal of count III as to architect Hirsch is affirmed; the dismissal of count III and the denial of the motion to reconsider the order as to general contractors Smith are reversed; and the dismissal of count III as to subcontractors Midwest and G.W. Thiel is reversed. This cause is remanded for further proceedings consistent with this opinion.
¶ 52 Affirmed in part, reversed in part, and remanded for further proceedings.