Court Opinion

ID: 3147315
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:29:33.120956+00
Date Added: 2024-06-11T12:11:36.764938
License: Public Domain

No. 1-10-0159

                                                                      SECOND DIVISION
                                                                      SEPTEMBER 28, 2010

No. 1-10-0159

1324 W. PRATT CONDOMINIUM                             )       Appeal from the
ASSOCIATION,                                          )       Circuit Court of
                                                      )       Cook County
                Plaintiff-Appellant,                  )
                                                      )
       v.                                             )       No. 08 L 14415
                                                      )
PLATT CONSTRUCTION GROUP, INC.,                       )       Honorable
                                                      )       Ronald F. Bartkowicz
                Defendant-Appellee.                   )       Judge Presiding

       PRESIDING JUSTICE THEIS delivered the opinion of the court:

       This case arises from allegations of faulty construction of a residential building. Plaintiff

1324 W. Pratt Condominium Association appeals from an order of the trial court that dismissed

two counts of plaintiff's complaint against defendant Platt Construction Group, Inc., that alleged

breach of the implied warranty of habitability and negligence. For the reasons that follow, we

affirm in part and reverse in part.

                                         BACKGROUND

       Between 2004 and 2005, defendant constructed an eight-unit residential building located

at 1324 W. Pratt Boulevard in Chicago. Defendant constructed the building pursuant to a

contract with a developer, 6801 N. Wayne, L.L.C. The developer sold the individual units as

condominiums, and the owners of the units formed the plaintiff condominium association in

order to represent their collective interests. Defendant and plaintiff never entered into any direct

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contract.

       Defendant completed the building in March 2005, and the individual owners took up

residence. For reasons not disclosed in the record, the developer was involuntarily dissolved on

November 28, 2005. Plaintiff alleged that, at some point after the developer dissolved, the unit

owners discovered water leaks around windows, doors, ceilings, and vents in their units and

common areas of the building. The leaks damaged not only the physical structure of the building

but also unit owners' personal property, such as furniture and books. Water also seeped into the

walls, causing mold to grow throughout the building. Plaintiff alleged that the increased

moisture caused the unit owners to experience medical problems such as worsening asthma and

flu-like symptoms. Plaintiff eventually retained a property inspector, who determined that the

leaks were due to a faulty roof and other construction anomalies.

       In September 2008, the Chicago area experienced a series of severe rainstorms. Plaintiff

alleged that these storms substantially worsened the leaks in the building and exacerbated the

mold problem. Plaintiff incurred significant costs in repairing the leaks and removing the mold

from the building.

       Plaintiff filed its original complaint against three parties on December 31, 2008:

defendant, the developer, and the roofing contractor. The complaint recounted the above

allegations and asserted numerous causes of action related to the allegedly faulty construction of

the building. Four counts were directed against defendant, alleging negligence, breach of the

implied warranties of good workmanship and habitability, and breach of contract under a third-

party beneficiary theory. Plaintiff sought damages for repairs to the building itself, common

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areas, and individual units, as well as inspection and assessment costs for engineers and other

construction experts.

       On June 9, 2009, defendant filed a motion to dismiss all four counts against it under

section 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 2008)), but

only the counts for breach of the implied warranty of habitability and negligence are at issue on

this appeal. Defendant argued in its motion that it could not be held liable under an implied

warranty of habitability theory because the implied warranty only applies to “builder-vendors,”

that is, builders who not only construct a residential building but who are also involved in the

sale of the residence to a purchaser. Defendant further argued that it could not be held liable in

negligence because plaintiff was seeking solely economic damages. Defendant argued that the

Moorman doctrine, as articulated in Moorman Manufacturing Co. v. National Tank Co., 91 Ill.

2d 69 (1982), precludes recovery of such economic damages under a tort theory. Plaintiff

responded that the implied warranty of habitability has never been limited to only builder-

vendors, and that the policies underlying the warranty apply equally well to builders. Plaintiff

further argued that the “sudden or dangerous occurrence” exception to the Moorman doctrine

applies in this case because the water damage to the building resulted from the September 2008

storms, relying on Mars, Inc.v. Heritage Builders of Effingham, Inc., 327 Ill. App. 3d 346 (4th

Dist. 2002) (holding that a single thunderstorm was a sudden and dangerous occurrence).

       The trial court granted defendant's motion to dismiss on all four counts on September 11,

2009. Plaintiff filed a motion to reconsider the trial court's ruling on the counts for breach of the

implied warranty of habitability and negligence. On December 8, 2009, the trial court issued a

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written opinion and order denying plaintiff's motion to reconsider. In its opinion, the trial court

did not address plaintiff's arguments on the implied warranty of habitability theory, but it did

address the negligence issue. The trial court rejected plaintiff's reliance on Mars and declined to

find that the September 2008 thunderstorms were a sudden and dangerous occurrence.

       Because the trial court's order only disposed of plaintiff's claims against one defendant, it

was not an appealable order and plaintiff could not immediately appeal without permission from

the trial court. See 134 Ill. 2d R. 304(a). On January 6, 2010, plaintiff moved for entry of a final

judgment on the dismissal of the counts against defendant. Pursuant to Supreme Court Rule

304(a), the trial court entered an order of final judgment, noting that there was no just reason to

delay an appeal of its order dismissing the implied warranty of habitability and negligence

counts. Plaintiff filed a timely notice of appeal on January 13, 2010.

                                            ANALYSIS

        On appeal, plaintiff argues that the trial court erred in dismissing the implied warranty of

habitability and negligence counts against defendant. First, plaintiff argues that the warranty

applies to builders, not just to builder-vendors. Second, plaintiff argues that the sudden or

dangerous occurrence exception to the Moorman doctrine applies to its negligence allegations.

       We review an order of dismissal pursuant to section 2-619(a)(9) de novo, accepting as

true all well-pled facts contained in the complaint and in any uncontradicted affidavits attached

to the motion. See Coady v. Harpo, Inc., 308 Ill. App. 3d 153, 158-59 (1999). The question on

review is “ ‘whether the existence of a genuine issue of material fact should have precluded the

dismissal or, absent such an issue of fact, whether dismissal is proper as a matter of law.’ ”

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Doyle v. Holy Cross Hospital, 186 Ill. 2d 104, 110 (1999), quoting Kedzie & 103rd Currency

Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116-17 (1993).

        We initially note that defendant did not file an appellee's brief on appeal. We have

thoroughly reviewed both plaintiff's appellate brief and the record, and we find that the issues

and claimed errors in this case are uncomplicated enough that we can reach the merits of

plaintiff's contentions without defendant's opposing brief. See First Capitol Mortgage Corp. v.

Talandis Construction Corp., 63 Ill. 2d 128, 133 (1976). Additionally, the record contains

defendant's brief in support its motion to dismiss, as well as its written reply to plaintiff's own

brief opposing the motion. The issues that we are called upon to decide on appeal were well

briefed in the trial court, and the absence of defendant's brief on appeal does not impede our

review of these issues.

       We first examine whether the trial court erred by dismissing the implied warranty of

habitability count. The implied warrant of habitability is a “creature of public policy” that is

designed “to protect purchasers of new houses upon discovery of latent defects in their homes.”

Redarowicz v. Ohlendorf, 92 Ill. 2d 171, 183 (1982). Historically, the rule of caveat emptor

governed sales of real property, and buyers could only rely on contract law in order to hold

builders liable for defects in the construction of new homes. See Redarowicz, 92 Ill. 2d at 180.

This rule remained unchanged in the United States until 1957, when the implied warranty of

habitability was first applied. See Redarowicz, 92 Ill. 2d at 180, citing Vanderschrier v. Aaron,

103 Ohio App. 340, 140 N.E.2d 819 (1957).

       The Illinois Supreme Court first recognized the warranty in the landlord-tenant context in

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Jack Spring, Inc. v. Little, 50 Ill. 2d 351 (1972), and later expanded the warranty to the sale of

new homes in Petersen v. Hubschman Construction Co., 76 Ill. 2d 31 (1979). Since Petersen, the

warranty has been steadily expanded over the years in order to serve the underlying public policy

of protecting new homeowners. The class of plaintiffs with standing to sue for violation of the

implied warranty has been expanded. See, e.g., Redarowicz v. Ohlendorf, 92 Ill. 2d 171 (1982)

(successive purchasers). The types of structures covered by the warranty have also been

expanded. See, e.g., VonHoldt v. Barba & Barba Construction, Inc., 175 Ill. 2d 426 (1997) (new

additions to existing structures); Park v. Sohn, 89 Ill. 2d 453 (1982) (home lived in by builder-

vendor before sale); McClure v. Sennstrom, 267 Ill. App. 3d 277 (1994) (house built on pre-

existing foundation); Briarcliffe West Townshouse Owners Ass'n v. Wiseman Construction Co.,

118 Ill. App. 3d 163 (1983) (vacant common lot of townhouse development); Herlihy v. Dunbar

Builders Corp., 92 Ill. App. 3d 310 (1980) (common elements of condominiums). Finally, the

class of potential defendants has been expanded. See, e.g., Park v. Sohn, 89 Ill. 2d 453 (builder-

vendor need not be in the business of building); Hefler v. Wright, 121 Ill. App. 3d 739 (1984)

(builder who erected house manufactured by another party); Minton v. The Richards Group of

Chicago, 116 Ill. App. 3d 852 (1983) (subcontractors); Tassan v. United Development Co., 88

Ill. App. 3d 581 (1980) (developer).

       All of these cases are based on the underlying public policy of the implied warranty of

habitability, which our supreme court has articulated in each of its cases that has addressed this

issue. See Board of Directors of Bloomfield Club Recreation Ass'n v. The Hoffman Group, Inc.,

186 Ill. 2d 419, 425-26 (1999); VonHoldt, 175 Ill. 2d at 430-31; Redarowicz, 92 Ill. 2d at 183;

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Petersen, 76 Ill. 2d at 39-40. The policy is supported by three concepts. First, purchasers of new

homes “generally do not [have] the ability to determine whether the houses they have purchased

contain latent defects.” Bloomfield Club, 186 Ill. 2d at 425. Second, “[t]he purchaser needs this

protection because, in most cases, the purchaser is making the largest single investment of his or

her life and is usually relying upon the honesty and competence of the builder, who, unlike the

typical purchaser, is in the business of building homes.” Bloomfield Club, 186 Ill. 2d at 425.

Third, “[i]f construction of a new house is defective, its repair costs should be borne by the

responsible builder-vendor who created the latent defect.” Redarowicz, 92 Ill. 2d at 183. These

policy considerations result in the core principle of the implied warranty of habitability: builders

are accountable for latent defects in residences that they construct. See Bloomfield Club, 186 Ill.

2d at 425.

       Defendant observed in its motion to dismiss that every case since Petersen has dealt only

with builder-vendors or developer-vendors who are involved in the actual sale of a new home,

and it argued that the warranty therefore cannot apply in this case because defendant was merely

a builder, not a builder-vendor. Defendant argued that plaintiff has a cause of action only

against the developer who sold the condo units in the building. We find this argument

unpersuasive. Our review of the long line of cases concerning the warranty confirms that the

primary objective of the implied warranty of habitability has always been to hold builders

themselves accountable for latent defects because they are in the best position to ensure that the

residences they build are habitable and free of defects that unsophisticated home buyers are

unable to detect. As our supreme court has stated, “[T]he basic rule governing the application of

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the implied warranty of habitability has been as unwavering as the aforementioned policy

considerations. This simple rule states, in essence, that the warranty is applicable against a

lessor or builder of a residential unit where latent defects thereabout interfere with the

inhabitant's reasonable expectation that the unit will be suitable for habitation.” (Emphasis

added.) Bloomfield Club, 186 Ill. 2d at 425-26.

       Although the language of some cases refers to “builder-vendors,” limiting application of

the warranty to only those builders who are also vendors would defeat the warranty's policy

goals of holding builders themselves accountable for latent defects in new homes and placing the

costs of repair on the builders who created the defect. Moreover, defendant's reading of the

cases is inconsistent with the nature of the warranty, which is not governed by contract law.

While the warranty “has roots in the execution of the contract for sale,” our supreme court has

been clear that “it exists independently” of a sales contract and “[p]rivity of contract is not

required.” Redarowicz, 92 Ill. 2d at 183. Consequently, the mere fact that in this case defendant

was not a builder-vendor and was not involved in the sale of the building to plaintiff is irrelevant

to the application of the implied warranty of habitability.

       Our review of the supreme court's cases on this subject and our consideration of the

public policy behind the implied warranty of habitability confirm that the warranty applies to

builders of residential homes regardless of whether they are involved in the sale of the home.

Because defendant's status as a builder rather than a builder-vendor does not preclude an action

for breach of the implied warranty of habitability, the trial court erred by dismissing the implied

warranty of habitability count in plaintiff's complaint. In so finding, we express no opinion on

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the merits of plaintiff's allegations, but hold only that plaintiff may maintain this particular cause

of action against defendant.

       We next examine plaintiff's contention that the trial court improperly dismissed the

negligence count pursuant to the Moorman doctrine. In Moorman, the supreme court held that a

“plaintiff cannot recover for solely economic loss under the tort theories of strict liability,

negligence, and innocent misrepresentation.” Moorman, 91 Ill. 2d at 91. Economic damages are

“ ‘damages for inadequate value, costs of repair and replacement of the defective product, or

consequent loss of profits––without any claim of personal injury or damage to other property

***’ [citation].” Moorman, 91 Ill. 2d at 82. Plaintiff in this case alleged that defendant was

negligent in constructing the building, and it sought damages for repair of the building and the

individual units as well as associated costs. These damages are economic in nature and the

Moorman doctrine must therefore be considered.

       There are three exceptions to the Moorman doctrine: “(1) where the plaintiff sustained

damage, i.e., personal injury or property damage, resulting from a sudden or dangerous

occurrence [citation]; (2) where the plaintiff's damages are proximately caused by a defendant's

intentional, false misrepresentation, i.e., fraud [citation]; and (3) where the plaintiff's damages

are proximately caused by a negligent misrepresentation by a defendant in the business of

supplying information for the guidance of others in their business transactions [citation].”

(Emphasis omitted.) In re Chicago Flood Litigation, 176 Ill. 2d 179, 199 (1997). Only the first

of these exceptions is at issue in this case. In order to apply the “sudden or dangerous

occurrence” exception and recover economic damages in negligence, (1) the economic damages

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must result from “a sudden, dangerous, or calamitous event,” and (2) the event must also cause

“personal injury or property damage.” In re Chicago Flood Litigation, 176 Ill. 2d at 200-01; see

also Trans State Airlines v. Pratt & Whitney Canada, Inc., 177 Ill. 2d 21, 26-27 (1997).

       The trial court held that the September 2008 storms were not a sudden or dangerous

occurrence and that the exception consequently does not apply, barring plaintiff's negligence

claim under the Moorman doctrine. Plaintiff argues on appeal that the trial court should have

accepted the precedent of Mars for the proposition that the September 2008 storms were a

sudden and dangerous occurrence. See Mars, 327 Ill. App. 3d at 353 (holding that a single

thunderstorm was a sudden and dangerous occurrence). Plaintiff further argues that the second

element of the exception is satisfied because plaintiff alleged that the leaks in the building

damaged personal property of the unit owners and caused health problems.

       We do not accept plaintiff's argument. Even if we were to agree with plaintiff that the

September 2008 storms were a sudden or dangerous occurrence and that the leaks in the building

resulted in personal injury or property damage, the exception cannot apply because the storms

did not cause the damage. Both plaintiff's complaint and its brief on appeal concede that the

leaks in the building were already present before the storms occurred and had caused “significant

damage not only to the building itself but to other property contained in the individual units,”

and that the leaks “grew substantially worse” after the storms. If the leaks were present before

the September 2008 storms and had already caused the damage, then it necessarily follows that

the damage could not have been caused by the storms. Because the damage was not caused by

the storms, it could not have been the result of a sudden or dangerous occurrence, and therefore

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that exception to the Moorman doctrine cannot apply. We note that this finding rests on the lack

of causation between the September 2008 storms and the damages that plaintiff alleges, and we

therefore do not reach the questions of whether the September 2008 storms constituted a sudden

or dangerous occurrence, or whether plaintiff adequately alleged personal or property damages

in addition to its claims for economic damages.

       Plaintiff argues in the alternative that the mold outbreak satisfies the elements of the

exception because it constitutes a sudden and dangerous occurrence and it resulted in personal

injury. Other courts have found that a sudden mold outbreak can qualify as a sudden or

dangerous occurrence when it “manifests itself in a sudden and calamitous manner, damaging

property and forcing the occupants of a home to flee or risk personal injury.” Mayer v. Chicago

Mechanical Services, Inc., 398 Ill. App. 3d 1005, 1010 (2nd Dist. 2010); accord Muirfield

Village–Vernon Hills, LLC v. K. Reinke, Jr., & Co., 349 Ill. App. 3d 178, 194 (2nd Dist. 2004).

       However, there are no allegations in the record before us that the individual unit owners

in this case were forced out of their homes due to the mold. Moreover, even if we accepted that

the mold infestation here constituted a sudden or dangerous occurrence, plaintiff has not alleged

any corresponding injuries. We have examined the affidavits of the unit owners in the record

and none of the affidavits allege any injury or damage from the mold. Although plaintiff alleges

in its complaint and brief that there was an “increased risk of serious personal injury to the

residents of the building, especially a newborn baby, due to their exposure to mold found within

the walls of the units,” there are no allegations of any actual injuries. This type of speculative

allegation is insufficient to sustain a cause of action in tort. See Washington Courte

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Condominium Ass’n–Four v. Washington-Golf Corp., 150 Ill. App. 3d 681, 687 (1986)

(rejecting allegations of potential injury to a plaintiff's minor son from an allergic reaction to a

mold infestation). Because there are no allegations that the mold caused any injuries, the mold

infestation does not fall within the sudden or dangerous occurrence exception to the Moorman

doctrine.

       Based on plaintiff's own arguments, complaint, and affidavits, the property and personal

injury damages alleged either were not the result of the 2008 storms or are speculative. We

therefore find that the sudden or dangerous occurrence exception does not apply in this case.

Because no exception applies, the plaintiff's negligence claim for economic damages is

precluded by the Moorman doctrine. As a result, we hold that the trial court properly dismissed

the negligence count of plaintiff's complaint.

                                           CONCLUSION

       For the foregoing reasons, we affirm the trial court's dismissal of the negligence court,

but we reverse the trial court's dismissal of the implied warranty of habitability count and

remand this case for further proceedings.

       Affirmed in part and reversed in part; cause remanded.

       CUNNINGHAM and KARNEZIS, JJ., concur.

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