Court Opinion

ID: 9745789
Source: CourtListenerOpinion
Date Created: 2023-08-27 13:32:01.946433+00
Date Added: 2024-06-11T07:25:04.638368
License: Public Domain

JUSTICE BUCKLEY, dissenting: The majority of this court issued an opinion in this matter on June 30, 1994. Among the holdings in that opinion, this court affirmed the findings of common law and statutory fraud against defendants, affirmed the trial court’s refusal to instruct the jury on the "clear and convincing evidence” standard of proof to be used in deciding liability under the fraud claims, and found that the defendants’ third-party action against the Trades was barred by the statute of limitations. I dissented from these findings, and I must now dissent from the majority order denying defendants’ petition for rehearing. The defendants’ first argument set forth in their petition for rehearing is based on the amendment to section 13 — 204 of the Illinois Code of Civil Procedure. Section 13 — 204 was amended on March 31, 1994, and provides that an action for contribution or indemnity may be commenced within two years after the party seeking contribution or indemnity has been served with process in the underlying action or within two years from the time the party, or his or her privy, knew or should reasonably have known of an act or omission giving rise to the action for contribution or indemnity, whichever period expires later. Section 13 — 204(d) states that this amendment should be applied retroactively when substantively applicable. Pursuant to this amendment, defendants’ third-party action was timely filed. Defendants filed their contribution action within two years after they were served with process by the plaintiffs. In denying the defendants’ petition for rehearing, the majority has failed to consider the amendment to section 13 — 204 of the Code of Civil Procedure. Notwithstanding the amendment to section 13 — 204, case precedent and common sense dictate that the statute of limitations period for purposes of a third-party claim begins to run either on the date of filing of the underlying complaint against defendant or on the date of service of process. (See Hayes v. Mercy Hospital & Medical Center (1990) , 136 Ill. 2d 450, 458-61, 557 N.E.2d 873, 877-78; Caballero v. Rockford Punch Press & Manufacturing Co. (1993), 244 Ill. App. 3d 333, 337, 614 N.E.2d 362, 366; Rummel v. Yazoo Manufacturing Co. (1991) , 222 Ill. App. 3d 526, 530, 583 N.E.2d 19, 21-22; Highland v. Bracken (1990), 202 Ill. App. 3d 625, 630, 560 N.E.2d 406, 410; La Salle National Bank v. Edward M. Cohon & Associates, Ltd. (1988), 177 Ill. App. 3d 464, 469, 532 N.E.2d 314, 319; Hartford Fire Insurance Co. v. Architectural Management, Inc. (1987), 158 Ill. App. 3d 515, 519-20, 511 N.E.2d 706, 709-10.) According to the majority, defendants were required to file their third-party claims against the Trades two years before the plaintiffs filed their claims against the defendants. Such a position is beyond comprehension and would lead to the bizarre results articulated in my initial dissent. Certainly the law in this State does not require a defendant to file a claim before it is ripe. Indeed, such a premature claim would be dismissed. Therefore, I believe this court should reconsider its finding on this issue. In addition, I feel it is necessary to reemphasize my strong dissension from the majority’s finding that the plaintiffs proved fraud by clear and convincing evidence. No evidence in the record supports the plaintiffs’ burden of showing that the defendants had knowledge of the structural defects in building four at the time they were selling the building four units. When plaintiffs’ counsel asked defendant, Ray Adreani, whether he learned that a collar joint in building four was not filled solid with mortar he responded, "That’s what you told me.” He subsequently stated that "maybe” that was true in a couple of spots. However, this was not an admission that he knew there were structural defects. Defendant was merely accepting plaintiffs’ counsel’s contention as possible. Defendants’ reliance on the architectural plans was justified. They could not be expected to know of the structural defects based on the water leakage problems and cracks in the outer walls of several buildings. The defendants believed that the measures they were taking would solve the water leakage problems and the plaintiffs have failed to show that defendants knew or believed otherwise. The cases cited by the majority to support its finding that fraud was proved in this case involve sellers who were actively concealing defects, such as water damage and the illegality of apartment units. (See Fleisher v. Lettvin (1990), 199 Ill. App. 3d 504, 557 N.E.2d 383; Munjal v. Baird & Warner, Inc. (1985), 138 Ill. App. 3d 172, 485 N.E.2d 855; Tan v. Wagner (1987), 156 Ill. App. 3d 49, 508 N.E.2d 390; Kinsey v. Scott (1984), 124 Ill. App. 3d 329, 463 N.E.2d 1359.) None of the cases cited by the majority involve a developer selling newly constructed residential property. A distinction should be made between a seller who occupied or owned the sale property and possessed personal knowledge of the cause of water leakage and a seller who never occupied the sale property and possessed knowledge only of the water leakage but not the cause of such leakage. The plaintiffs have not shown that the defendants’ statements or omissions were untrue or that they were actively concealing water damage from the buyers of building four units. The recently enacted Residential Real Property Disclosure Act further fortifies my position that the facts relied upon by plaintiffs do not give rise to fraud. The Act requires a seller of residential real property with at least one but not more than four dwelling units to disclose to potential buyers the existence of certain conditions and material defects existing in the sale property. (Pub. Act 88 — 111, eff. October 1, 1994.) Section 15(9) of the Act specifically excludes the transfers of newly constructed residential real property that has not been occupied. Under the Act, sellers such as the defendants do not have a duty to disclose the existence of defects such as water leakage. This court should take note of the legislature’s view that sellers who have owned or occupied property have a greater duty of disclosure to buyers than sellers of newly constructed property. The finding of fraud was against the manifest weight of the evidence and defendants were entitled to a judgment notwithstanding the verdict on the common law fraud claim. In addition, the defendants’ lack of knowledge of the structural defects cannot be attributed to culpable, reckless or determined ignorance and, therefore, the trial court erred in finding a violation of the Consumer Fraud Act. Finally, I believe that the trial court’s failure to instruct the jury on the "clear and convincing” standard of proof caused an egregious miscarriage of justice. The jury in this case was faced with the determination of several claims, some of which involved the "preponderance of the evidence” standard of proof. The fraud claims involved the higher "clear and convincing” standard, but the jury was never instructed on the distinction between the two. Juries are not expected to understand the subtle differences between these two standards. Allowing a jury to make these determinations without describing the evidentiary standards to be applied renders the difference between the standards a nullity. The trial court erred in failing to instruct the jury on the "clear and convincing” standard and defendants were prejudiced by this failure. In my opinion, this error alone constituted a sufficient reason to overturn the judgment of fraud against the defendants. For all of these reasons, I must dissent from the majority’s decision to deny defendants’ petition for rehearing.