Source: https://www.chicagobusinesslitigationlawyerblog.com/category/real-estate-litigation/
Timestamp: 2019-04-22 06:44:27+00:00

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Real-Estate Litigation Category Archives — Chicago Business Litigation Lawyer Blog Published by Chicago, Illinois Business Litigation Attorneys — Lubin Austermuehle, P.C.
The issue of ground contamination is an extremely important one for homeowners. With the collapse of the housing market, many people have already found that their homes are worth far less than what they paid or still owe on them. If there has been any kind of chemical leak in the area, homeowners may find themselves with property that can’t sell at all, no matter how low they drop the price.
Such might be the case due to Shell Oil Company allegedly contaminating private property near its refinery in Roxana, IL. The lead plaintiff, Jeana Parko, filed the lawsuit on behalf of herself and her neighbors, alleging that they suffered lower values on their property as a direct result of benzene leaking into the ground and other carcinogenic chemical releases caused by the refinery. The leaks were allegedly caused by broken pipelines in the refinery itself, resulting in more than 200,000 pounds of pure benzene being released directly into the ground. The lawsuit was originally filed in Madison County Court in April 2012, but has since been moved to federal court.
U.S. District Judge G. Patrick Murphy has agreed to certify the class, although Shell argued that the owners of the estimated 387 plots of land at issue should be forced to litigate individually. Defendants often argue for individual litigation over class action lawsuits because the awards of individual litigation are likely to be much lower and the plaintiffs are less likely to sue on their own. The pressure of a certified class is also more likely to induce the defendant to settle the case outside of court.
Judge Murphy did not agree with Shell’s arguments for denying the class certification. In his decision, he wrote, “The question of whether hazardous petroleum byproduct pervades village property and of whether defendants are complicit in any resultant damage are best suited to class-wide resolution”. He also points out that to have each of the almost 400 plaintiffs file their own individual lawsuits would create a “redundant and unnecessary strain on the dockets of multiple justices” without doing anything to increase the “accuracy of the resolution”.
Earlier in the case, Shell attempted to have the class action lawsuit stayed or dismissed due to two other similar cases they are facing which are still pending in Madison County. These attempts were unsuccessful and the case is now preparing to go to trial.
In addition to Shell Oil Company, the defendants in the lawsuit include Equilon Enterprises dba Shell Oil Products, US, ConocoPhillips Company, WRB Refining LP, ConocoPhillips WRB Partner and Cenovus GPCO.
Simmons is also representing the Village of Roxana in a similar lawsuit against Shell Oil Co.
Lubin Austermuehle represents clients all over the Chicago-land area, and because Chicago is a growing metropolis, land comes at a premium. This means that there is constant property development going on all over our fair city, and with that development comes unique legal problems. Water Tower Realty Company v. Fordham is a case that was decided in the Appellate Court of Illinois, First District, Third Division that addresses some of the problems that arise when companies perform construction in close proximity to neighboring businesses.
In Water Tower Realty Company v. Fordham, Defendant Fordham constructed a building on a parcel of land in Chicago, and prior to its construction, Defendant agreed to indemnify Plaintiff Water Tower for losses suffered due to the erection of the edifice. Five years after the building was finished, Plaintiff filed suit alleging that during construction Defendant had “so used its property as to make it impossible to lease” an adjacent property. Plaintiff claimed that it had lost over $75,000 in rental business as a result and that Defendant had refused to indemnify Plaintiff for this loss. Plaintiff filed for a dismissal of the action, and the trial court dismissed the claims because they were barred by the applicable statute of limitations as set forth in 735 ILCS 2-619(a)(5). Defendant then appealed the trial court’s dismissal.
The Appellate Court analyzed whether the trial court was correct in applying the four year statutory period or whether a ten year period was appropriate. The Court found that the nature of the injury was determinative in making such a decision, with the four year term applying if the injury was due to a construction-related activity, and the ten year term applying if the harm was caused by a breach of contract. In reversing the lower court’s dismissal, the Appellate Court concluded that the appropriate statute of limitations was the ten year term because the Plaintiff’s injury was caused by Defendant’s failure to honor the indemnity agreement. The Court went on to hold that the agreement’s indemnity provisions applied to both first party and third party claims, and that it contained no language that could hold Defendant’s agents personally liable for Plaintiff’s damages.
The purchase of land is a complex and multi-layered process that presents many opportunities for not only misunderstandings and mistakes, but also fraud and misrepresentations. Lubin Austermuehle has many attorneys who focus on handling consumer fraud cases, so we are always tracking developments in that field of the law. Chultem v. Ticor Title Insurance is a recent Illinois appellate decision concerning title insurance agent kickbacks in the sale of real properties here in Illinois.
Chultem v. Ticor Title Insurance began as two separate class-actions that were consolidated into one case. In both cases, however, Plaintiffs purchased a parcel of land that also included the purchase of a title insurance policy from Defendants. Plaintiffs were sold the title insurance by an attorney agent who also represented one or more of the parties in the real estate transactions in question. Defendants, as title insurance companies, paid these lawyer agents an additional sum “over and above the attorney fees” paid to them by their clients (who were parties to the transaction).
Plaintiffs filed suit because Defendants paid the attorney agents based upon “the amount of insurance premiums generated from the referred clients” instead of for the services that the lawyers actually performed in their role as title insurance agents. In doing so, Plaintiffs alleged that in doing so, Defendants violated the Title Insurance Act and the Consumer Fraud and Deceptive Business Practices Act. Plaintiffs sought to certify a class, but the lower court denied certification because it would not be possible to determine across the board liability. Plaintiffs then filed an appeal.
On appeal, the Court addressed Defendants’ argument that a transaction-by-transaction analysis would be required in order to determine liability, and as such common issues could not predominate as required for class certification. The Court did not find Defendants’ arguments persuasive, however, because the agreement between the attorney agents and Defendants provided for a pro forma commitment. The Court went on to reason that if Plaintiffs are able to show that the agreements were pro forma and that the agents received full compensation as insurance agents, then liability for all claims could be established. Therefore the Court reversed the lower court ruling and remanded the case consistent with the finding that the Plaintiffs had satisfied the predominance requirement for class-certification.
Our Chicago consumer fraud attorneys were pleased to see a recent ruling affirming real estate buyers’ right to relief, and punitive damages, after fraud by the builder. Linhart v. Bridgeview Creek Development Inc., No. 1-07-2712, (Ill. 1st May 20, 2009). Plaintiffs Ken Linhart, Beverly Linhart, Amy Gable, Jane Longo, Lloyd Clark and Diane Latta bought four townhomes in the Bridgeview subdivision in Palatine, Ill. in 1997 and 1998. All four units were part of the same building. During construction of that building, a town inspector noted that the foundation was sinking. This problem was not obvious during the pre-purchase walk-throughs, but later allegedly caused the building to sink seven to ten inches, causing cracks in the walls, slanted floors, floors and ceilings pulling apart, sticking doors and windows and flooding.
In 2001, the plaintiffs sued the developer, builder and its owner over these defects, claiming breach of implied warrant of habitability; fraudulent misrepresentation and concealment; and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. A jury trial returned a verdict of $1.38 million in compensatory damages for all plaintiffs, plus punitive damages of $5,000 plus attorney fees for each plaintiff. Defendants appealed, saying the jury’s decision was against the manifest weight of the evidence; the jury was improperly instructed; the six plaintiffs should have had six separate verdicts rather than one; and punitive damages were improper.
The First District started with the meatiest issue: whether the verdict itself was not supported by the evidence. On the fraud and Consumer Fraud Act claims, the defendants argued that plaintiffs should have shown that they relied on defendants’ misrepresentations when they purchased the townhouses. As to the four plaintiffs claiming common-law fraud, the court wrote, there was in fact ample evidence that they did so. The evidence in the record shows that defendants lied about the cause of cracks in the walls and the foundation, including the statement that “it’s not like the house is going to sink or anything.” Thanks to the village inspector’s report, defendants knew this was not true. Thus, the common-law fraud verdict was valid, and because common-law fraud is enough to support a Consumer Fraud Act claim, both verdicts were affirmed. The court also upheld the amount of the damages, saying qualified expert testimony supported it.
The court next examined the defendants’ argument that plaintiffs should have presented evidence for their own claims separately and received separate verdicts. It’s true that Illinois law requires separate verdicts when separate recoveries are sought, the First District wrote, but on the relevant count — breach of implied warranty of habitability — all of the plaintiffs presented their case as a single plaintiff, asking for repairs to the building as a whole. Thus, the ruling was affirmed. The First also rejected defendants’ arguments that the jury instructions were deficient in several ways. It did find an error in the jury instructions for breach of implied warranty of habitability, but said this error was harmless.
Last, the First District considered the issue of whether punitive damages were proper even though the plaintiffs never explicitly requested them. Punitive damages are available under the Consumer Fraud Act, the court noted, and plaintiffs asked for any relief provided by that law. Furthermore, evidence at trial showed that the defendants acted fraudulently or maliciously, as required for punitive damages, because they failed to correct a defect they knew about and intentionally misrepresented that defect to the buyers. And the trial court did not abuse its discretion, the appeals court said, because it considered both sides’ arguments and the defendants’ financial position. Thus, it upheld the punitive damages award and affirmed all of the trial court’s rulings.
In a hard-fought Illinois consumer fraud lawsuit over deception by a condominium developer, the Second District Court of Appeal has upheld an award involving both nominal damages and punitive damages. In Kirkpatrick v. Strosberg, Nos. 2-06-0724 and 2-06-0731 (Ill. 2nd Aug. 8, 2008), four plaintiffs, led by John Kirkpatrick, sued a real estate developer over misrepresentations about the square footage and ceiling height of the luxury condominiums they purchased in Glen Ellyn, Ill.
Defendant Morningside Development Group is general partner of defendant Glen Astor Condominium Investors LP, a residential real estate developer. Defendant David Strosberg is Morningside’s president. Glen Astor entered into contracts with the plaintiffs for their purchase of luxury condos on the top floor of a development. Before purchasing the condos, the plaintiffs allege, they read sales materials promising nine-foot ceilings and specific amounts of square footage in the units. In three cases, floor plans specifying square footage were incorporated into their contracts. A rider to the contracts specified that dimensions are approximate and subject to adjustments due to the location of building components. During construction, the builder had to lower the ceilings by six inches because of the size of roof components. After buying the condos, the plaintiffs realized that both the square footage and the ceiling heights were smaller than promised.
At trial for the subsequent lawsuit, the court determined that the difference in square footage resulted from differences between how LeNoble and the plaintiffs’ own appraiser measured the square footage, but that LeNoble’s smaller measurements were appropriate and proper. Thus, the court struck down the square footage claims. Finally, it found for the plaintiffs on the breach of contract claims regarding the lowered ceiling. It found that there were actual damages, but that the plaintiffs’ expert appraiser had not given adequate information about damages. The breach of contract took place in 1997, the court said, but Philips gave a diminished value as of 2004 that was “nothing more than a guess without proper basis.” Thus, the court awarded nominal damages of $100 each on the breach of contract and Consumer Fraud Act claims regarding the ceilings. It also awarded $300,000 in punitive damages and $83,000 in attorney fees.

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