Court Opinion

ID: 3179735
Source: CourtListenerOpinion
Date Created: 2016-02-23 22:21:14.371374+00
Date Added: 2024-06-11T09:36:29.274571
License: Public Domain

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                                    Appellate Court                         Date: 2016.02.23 14:25:04
                                                                            -06'00'

   Alliance Property Management, Ltd. v. Forest Villa of Countryside Condominium Ass’n,
                               2015 IL App (1st) 150169

Appellate Court        ALLIANCE PROPERTY MANAGEMENT, LTD., an Illinois
Caption                Corporation, Plaintiff-Appellant, v. FOREST VILLA OF
                       COUNTRYSIDE CONDOMINIUM ASSOCIATION, an Illinois
                       Not-For-Profit Corporation, Defendant-Appellee.

District & No.         First District, Fourth Division
                       Docket No. 1-15-0169

Filed                  December 24, 2015

Decision Under         Appeal from the Circuit Court of Cook County, No. 12-M5-114; the
Review                 Hon. R.W. Hartigan, Judge, presiding.

Judgment               Affirmed.

Counsel on             Andrea Hoeflich, of Law Office of Andrea Hoeflich, of Woodridge,
Appeal                 for appellant.

                       Gabriella R. Comstock, of Keough & Moody, P.C., of Naperville, for
                       appellee.

Panel                  JUSTICE COBBS delivered the judgment of the court, with opinion.
                       Presiding Justice McBride and Justice Howse concurred in the
                       judgment and opinion.
                                                  OPINION

¶1       Following a bench trial, plaintiff Alliance Property Management (Alliance) appeals the
     July 31, 2014, order entered by the circuit court of Cook County, which denied Alliance’s
     breach of contract claim. The trial court found that defendant Forest Villa of Countryside
     Condominium Association (Forest Villa) lacked authority to enter into the contract and
     therefore it was void. On appeal, Alliance argues that the trial court erred in “rescinding” the
     contract as a void agreement1 because the error in its formation was a mutual mistake of fact,
     which rendered it voidable, not void. Alliance further contends that the contract is
     enforceable because defendant ratified the contract. In addition, Alliance asserts that
     defendant waived compliance of its governing documents; liquidated damages are not unjust
     enrichment; and defendant improperly terminated the agreement. For the following reasons,
     we affirm the judgment of the circuit court.

¶2                                        BACKGROUND
¶3        Forest Villa is a condominium association and not-for-profit corporation located in
     Countryside, Illinois. It was established pursuant to the Illinois Condominium Property Act
     (765 ILCS 605/1 et seq. (West 2012)) and the General Not for Profit Corporation Act of 1986
     (805 ILCS 105/101.01 (West 2012)). The “Declaration of Condominium Ownership” and the
     bylaws were recorded with the Cook County recorder of deeds on December 15, 1999.
     Among other provisions regarding the administration of Forest Villa, the bylaws contain a
     provision which states that the board of directors (Board) has the power “[t]o engage the
     services of a manager or managing agent who shall manage and operate the Property and the
     Common Elements thereof, upon such terms and for such compensation and with such
     authority as the Board may approve provided, that no management agreement may run for a
     period of beyond two years.”
¶4        Alliance is a real estate management company owned and operated by Chris Skourlis, a
     licensed professional property manager. Skourlis has managed condominiums for more than
     20 years and at the time this action was commenced, Alliance managed approximately 30
     buildings.
¶5        On May 27, 2008, Forest Villa, through its Board, entered into a 36-month
     “Condominium Association Management Agreement” (Agreement) with Alliance. The
     Agreement was to run from July 15, 2008, to July 15, 2011, and was signed by the officers of
     Forest Villa’s Board at that time: Richard Bartz (president), Margaret Peterson (secretary),
     and Lynne Mazzone (treasurer). In the Agreement, the Board purported to have full authority
     to act on behalf of the association and hire Alliance. It provides, “[i]n consideration of the
     mutual terms, covenants, and conditions set forth herein below, the Board of Directors,
     having full authority and acting on behalf of the Association, hereby appoints [Alliance] as
     its, agent, and [Alliance] hereby accepts that appointment in mutual agreement.”
¶6        Under the Agreement, Forest Villa would compensate Alliance for management services
     for the condominium. In addition to the day-to-day management of the building, Alliance
         1
          A void contract cannot be “rescinded.” Rescission is the cancelling of a contract so as to restore the
     parties to their initial status. Horwitz v. Sonnenschein Nath & Rosenthal, LLP, 399 Ill. App. 3d 965, 973
     (2010).

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       was to prepare financial reports, organize general association meetings, oversee Board
       elections, and perform periodic inspections of the property. The Agreement further provided
       that Alliance would “guide and assist the Board Members in their fiduciary duties and
       obligations” and “[a]ssist in the administration of the provisions of the Declaration, Articles
       of Incorporation, By-laws, Rules and Regulations and policies of the Association.”
       Additionally, Alliance expressly assumed a fiduciary relationship with Forest Villa. The
       Agreement states:
                   “[Alliance] accepts the relationship of trust and confidence established between
               itself, the Board of Directors, and the Association by virtue of entering in this
               Agreement. [Alliance] covenants to furnish its best skill and judgment and to
               cooperate in furthering the interests of the Association.
                   [Alliance] agrees to furnish efficient business administration and supervision and
               to perform its responsibilities, both administrative and advisory, in the best and
               soundest manner consistent with the best interests of the Association Members and at
               the direction of the Board for the Association.”
¶7         The Agreement contained an automatic renewal provision whereby the contract would be
       renewed “for identical periods of time unless on or before sixty [(60)] days prior to the
       expiration of the initial term or any renewal period either party shall notify the other in
       writing that it elects to terminate this agreement.” In the event of a material breach by
       Alliance, Forest Villa could terminate the contract; however, it must provide written notice
       and allow Alliance 60 days to remedy the breach prior to termination. If these procedures are
       not followed, Forest Villa would be responsible for liquidated damages in the amount of the
       management fees for the remaining portion of the contract, which would be immediately due.
¶8         On March 2, 2010, prior to the Agreement’s automatic renewal, Forest Villa renewed the
       contract and extended its terms to July 14, 2014. None of the contract terms were changed.
       Forest Villa’s officers at that time, Bartz, Mazzone, and Mary Ann Mobley (treasurer),
       signed on behalf of Forest Villa and Skourlis signed on behalf of Alliance.
¶9         On July 27, 2011, just 13 days into the extended term, Forest Villa sent Alliance a letter
       informing it of material breaches to the contract. Alliance did not respond to the letter until
       September 19, 2011, at which time it requested a bill of particulars.
¶ 10       Forest Villa did not send additional evidence of the breaches to Alliance. Instead, it
       informed Alliance that it was terminating the contract as of October 31, 2011, because
       Alliance did not make an effort to cure the breaches. Subsequently, Forest Villa sent Alliance
       a letter explaining that it hired a different management company, which would start
       management on November 1, 2011.
¶ 11       Alliance filed a complaint against Forest Villa on January 23, 2012. It alleged that Forest
       Villa breached the Agreement when it terminated the contract without following one of the
       two cancellation procedures detailed in the Agreement. Specifically, Alliance contended that
       Forest Villa did not provide evidence of material breaches and did not allow Alliance 60 days
       to cure any breach before termination or notify it 60 days prior to a renewal period that it
       would terminate the contract. Forest Villa filed an answer and alleged five affirmative
       defenses, including that the contract was void ab initio, based on misrepresentation, and that
       it was unconscionable. In addition it alleged that there was a unilateral mistake of fact and, in
       the alternative, that there was a mutual mistake of fact.

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¶ 12        The case proceeded to a bench trial at which several witnesses testified, including Jerome
       Miceli and Charles Plaia, both officers of Forest Villa at the time of trial, and Richard Bartz
       and Lynne Mazzone, both officers who signed the initial contract and the renewal. Skourlis,
       the owner of Alliance, also testified. Margaret Peterson, an officer who signed the initial
       Agreement, passed away prior to trial, however, her discovery deposition was admitted into
       evidence.
¶ 13        In her deposition, Margaret Peterson testified that she was employed as an accounting
       manager for the American Physicians Institute. At the time of the deposition, she was the
       treasurer for Forest Villa’s Board. Prior to March 2013, she had been the Board’s secretary
       from March 2011 to March 2013 and had been a Board member since 2008. She was on the
       Board when the initial Agreement was signed, but not when it was renewed on March 2,
       2010. She testified that she was not aware of the bylaws when she signed the initial
       Agreement for 36 months.
¶ 14        Miceli testified that he is a unit owner and worked for a trucking company in sales before
       he retired. He became a member of the Board in 2010. He testified that he did not review the
       Agreement when he joined the Board. He further testified that although he had seen the
       declaration, he was “not really” familiar with it or necessarily aware of all the terms of the
       declaration, the bylaws, the rules, or the Agreement. Miceli stated that he expected Alliance
       to guide him in making decisions. Charles Plaia, the Board’s president at the time of trial,
       also testified. Plaia was retired, but had been a truck driver and warehouse employee prior to
       retirement. He became a Board member in March 2011, thus, he was not on the Board when
       the initial Agreement was executed or when it was renewed. He testified, however, that he
       reviewed the Agreement and Forest Villa’s governing documents prior to becoming
       president, and was familiar with their terms. He also testified that he expected Alliance
       would guide him in making decisions.
¶ 15        Skourlis testified that he had been in the property management business for 22 years. He
       was the sole owner and operator of Alliance, which manages condominiums and townhome
       associations throughout three counties. Alliance formalizes its relationship with associations
       through a contract that Skourlis has been using for approximately 20 years. This contract
       allows an association to choose a 24, 36, or 48 month duration, with decreasing costs as the
       length of the contract increases. No one has ever alerted Skourlis that the contract violates
       state laws. Skourlis stated that he believed that Bartz, Mazzone, and Peterson had full
       authority to enter into the Agreement with Alliance for 36 months. Skourlis met with the
       Board to review the contract two or three times before the initial Agreement was executed.
       No one from the Board informed him that the bylaws restricted the Agreement to 24 months.
¶ 16        Skourlis further testified that typically, he would not obtain a copy of an association’s
       bylaws and familiarize himself with them prior to executing management agreements. He did
       not receive Forest Villa’s governing documents until after the Agreement was signed. He
       explained that, generally, he familiarizes himself with the documents, in particular the rules
       and regulations, when the Board informs him of the policies they wish to enforce and the
       policies they wish to ignore. Skourlis testified that Forest Villa made several exceptions to
       the bylaws during the time that Alliance managed the property. He also testified that it was
       his role as property manager to guide and assist the Board in their fiduciary duties.
¶ 17        Richard Bartz was a unit owner and the Board’s president from 2008 to 2010. He testified
       that he was on the Board when it initially hired Alliance and when it renewed the Agreement.

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       Bartz further testified that Alliance provided the bargained-for benefits under the contract
       and “much more.” He also stated that he knew Alliance was there to help guide the Board
       and assist it in complying with the bylaws. Bartz did not know when he became aware of the
       24-month restriction, but Alliance did not inform him of it prior to executing the Agreement
       or the renewal.
¶ 18        Although Bartz was unaware of the restriction when he signed the initial contract, he
       believed that the Board had the ability to waive the bylaws. He explained that he “became a
       member of the CIA [sic], and so we would go to workshops, and in one of those workshops
       they said that a Board, in the best interest of a Condominium Association, could waive some
       of the things that are in the bylaws.” Bartz testified that he did not consult with an attorney
       regarding the power to waive the bylaws, but there was an attorney at the workshop. He did
       not believe he was in danger of breaching his fiduciary duty by entering into the 36-month
       Agreement.
¶ 19        Lynne Mazzone was the Board’s secretary when it entered into the Agreement. She was
       retired but worked part time for the Du Page Senior Citizen Council and served Meals on
       Wheels. Mazzone testified that she signed the Agreement and at trial acknowledged the
       provision that states that the Board had full authority to enter into the contract. She further
       testified that she believed the Board had the authority to enter into the Agreement and that
       she was acting in the best interests of Forest Villa. She did not feel that her fiduciary duty
       was in jeopardy. She was not aware that the bylaws restricted contracts for management
       services to 24 months when she entered into the contract. She testified that she
       “remember[ed] going to a *** seminar *** and there was a lawyer there speaking and he was
       explaining *** contracts and Declarations. And at that point [she] heard him say *** read
       your Declaration, see what it has to say, but you as a Board, you are allowed to make a
       three-year contract if you think it’s to the benefit of the Association.” Mazzone further
       testified that the Board did not have an attorney review the renewal and that they relied on
       Alliance to help them make sure they were complying with the declaration and bylaws.
¶ 20        Following trial, the court entered judgment in favor of Forest Villa. The court found that
       the Agreement was void because its terms exceeded the Board’s authority. Among other
       things, the court also found that there was a mutual mistake of fact because all parties were
       unaware of the 24-month restriction. The court noted, “Mr. Skourlis, owner of Alliance
       Property, acknowledged he guides the Board, and is an agent and fiduciary of the Board. He
       should have been aware of the Contract limitations in the By-Laws and he indicated that he
       was not and it was his fault in doing so.” Plaintiff filed a motion to reconsider, which was
       denied. This appeal followed.

¶ 21                                            ANALYSIS
¶ 22                                     Motion for Fees and Costs
¶ 23       As an initial matter we address Forest Villa’s motion to recover attorney fees and costs,
       which we have taken with the case. In its motion, Forest Villa states that it was required to
       prepare an appendix to the appellate brief because the appendix created by Alliance did not
       comply with Illinois Supreme Court Rule 342 (eff. Jan. 1, 2005). Forest Villa also contends
       that Alliance’s amended brief violated Illinois Supreme Court Rule 341(h) (eff. Feb. 6, 2013)
       by failing to: (1) identify the applicable standard of review and cite authority for each issue;
       (2) include an appropriate statement of facts that is not argumentative; (3) cite the correct

                                                  -5-
       pages in the record; and (4) provide clear, organized, and cohesive legal argument. Forest
       Villa requests $6,602.55 for attorney fees and $248.03 for costs it incurred in responding to
       these deficiencies pursuant to Illinois Supreme Court Rule 375 (eff. Feb. 1, 1994). We
       decline to grant this request. Further, Rule 375 authorizes sanctions when a party wilfully
       violates the Supreme Court Rules. Id. Where there is a wilful violation, when appropriate, the
       court can order a party to pay a fine. We do not find any violation by Alliance to be wilful
       and, if we did, the rule states that an order “to pay a fine” would be appropriate, not full
       payment of an opponent’s attorney fees. Rule 375 only permits the court to award attorney
       fees when an appeal is frivolous and not taken in good faith. We do not find that to be the
       case in the instant appeal as there are legitimate legal issues presented for disposition.
       Accordingly, Forest Villa’s motion for fees and costs is denied.
¶ 24       In its amended brief, Forest Villa raises the same arguments regarding the deficiencies in
       Alliance’s amended brief as were presented in the motion and argues that portions should be
       stricken. We agree with Forest Villa that Alliance did not fully comply with Rule 341(h) and
       Rule 342. For example, portions of Alliance’s “Statement of Facts” contain improper
       argument and it cites incorrect page numbers in the record. “[S]upreme court rules pertaining
       to the content of briefs are mandatory and *** failure to abide by them can result in dismissal
       of an appeal.” Northbrook Bank & Trust Co. v. 300 Level, Inc., 2015 IL App (1st) 142288,
       ¶ 13. None of the deficiencies in Alliance’s brief, however, prevent us from ascertaining the
       relevant legal issues to be resolved. Thus, we choose to exercise our discretion to consider
       the merits of Alliance’s arguments. Zadrozny v. City Colleges of Chicago, 220 Ill. App. 3d
290, 293 (1991). Although we decline to strike Alliance’s amended brief, we will disregard
       any offending portions. Hamilton v. Conley, 356 Ill. App. 3d 1048, 1053 (2005).

¶ 25                                        Board’s Authority
¶ 26       The primary issue in this case is whether a provision in the bylaws of a condominium
       association limiting the Board to entering into contracts for no more than 24 months renders
       a contract with a third party property management company for 36 months void. The parties
       do not dispute that the bylaws prohibit the Board from entering into a contract with a
       management company for more than 24 months. Alliance contends, however, that the limit
       on duration was a mutual mistake of fact that is not material to the formation of the
       Agreement. Consequently, the Agreement is voidable, but not void. Because the Agreement
       was voidable, it was subject to ratification, which was accomplished when Forest Villa
       accepted the benefits of Alliance’s services. Forest Villa responds that because the Board was
       prohibited from executing a 36-month contract under the bylaws, it lacked authority to enter
       into the Agreement, and therefore it is void ab initio and could not be ratified. The
       interpretation of a contract to determine whether it is void ab initio or voidable is a question
       of law and is reviewed de novo. Borsellino v. Putnam, 2011 IL App (1st) 102242, ¶ 103.
¶ 27       The affairs of condominium associations are controlled by the Condominium Property
       Act (Act) (765 ILCS 605/1 et seq. (West 2012)). Pursuant to the Act, a condominium is
       formed by the recording of a declaration. Id. The declaration is “the instrument by which the
       property is submitted to the provisions of [the] Act.” 765 ILCS 605/2(a) (West 2012); Board
       of Directors of 175 East Delaware Place Homeowners Ass’n v. Hinojosa, 287 Ill. App. 3d
886, 889 (1997). In addition to the declaration, the administration of a condominium is
       governed by the board rules and regulations and the bylaws. The bylaws can either be

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       contained in the declaration or in a separate document that is recorded with the declaration.
       Board of Directors of 175 East Delaware Place Homeowners Ass’n, 287 Ill. App. 3d at
       889-90. The general contents of both the declaration and the bylaws are delineated by the
       Act. Id. at 890. “Condominiums are creatures of statute and, thus, any action taken on behalf
       of the condominium must be authorized by statute.” Id. at 889. Where a unit owner’s rights
       must be determined, the Act, the declaration, and the bylaws must be construed as a whole.
       Goldberg v. Astor Plaza Condominium Ass’n, 2012 IL App (1st) 110620, ¶ 47 (citing Carney
       v. Donley, 261 Ill. App. 3d 1002 (1994)). This concept similarly applies where the court must
       determine the scope of a condominium board’s authority because the same rights and
       obligations are implicated.
¶ 28       The administration of the condominium is carried out by the board of directors. 765 ILCS
       605/18 (West 2012). According to the Act, the board is comprised of elected unit owners
       who hold terms of two years, which are staggered so that positions are open each year. Id.
       The members of the board owe a fiduciary duty to the unit owners. 765 ILCS 605/18.4 (West
       2012); Feliciano v. Geneva Terrace Estates Homeowners Ass’n, 2014 IL App (1st) 130269,
       ¶ 35. This fiduciary duty requires board members to act in a manner reasonably related to the
       exercise of that duty, and the failure to do so results in liability for the board and its
       individual members. Feliciano, 2014 IL App (1st) 130269, ¶ 35.
¶ 29       A contract executed by a party that does not have authority is void ab initio. Illinois State
       Bar Ass’n Mutual Insurance Co. v. Coregis Insurance Co., 355 Ill. App. 3d 156, 164 (2004).
       When a contract is void ab initio, it is as if it never existed. Id. A party cannot ratify a void
       contract by waiving its right to assert a defect. Id.; see also Granzow v. Village of Lyons, Ill.,
       89 F.2d 83, 85 (7th Cir. 1937) (explaining that “[r]atification is impossible if there is no
       power to contract”).
¶ 30       Here, the Act explicitly authorizes a board to hire a management company and does not
       place a limit on the duration of contracts. 765 ILCS 605/18(a)(5) (West 2012) (stating “the
       board may engage the services of a manager or managing agent” (id.)). Thus, a 36-month
       contract for management services is not prohibited by the Act. As long as the requirements of
       the Act are followed, a board may impose additional rules in its declaration and bylaws.
       Board of Directors of 175 East Delaware Place Homeowners Ass’n, 287 Ill. App. 3d at 891;
       765 ILCS 605/18.4 (West 2012). These rules can be more restrictive than the Act. Board of
       Directors of 175 East Delaware Place Homeowners Ass’n, 287 Ill. App. 3d at 891; see also
       Palm v. 2800 Lake Shore Drive Condominium Ass’n, 2014 IL App (1st) 111290, ¶ 128
       (upholding a provision in the bylaws requiring notices be mailed as opposed to mailed or
       delivered as allowed by the Act). Such is the case in the instant appeal, where Forest Villa’s
       bylaws contain a provision that limits the Board’s authority to hire management companies
       to contracts for no more than 24 months.
¶ 31       Nonetheless, Alliance contends that the Board had authority to enter into the contract for
       36 months. It maintains that if an action is in the best interests of the condominium
       association, the Board can deviate from the bylaws. Alliance has cited no legal authority to
       support this argument. Instead, it relies on the testimony of Forest Villa’s former officers that
       they believed they had authority to waive the bylaws if it was in Forest Villa’s best interests.
       The officers testified that they held this belief, in part, because they attended a seminar
       presented by an independent organization where an unidentified attorney allegedly instructed
       them that they had this power. This testimony is not sufficient legal authority to establish the

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       scope of the Board’s authority. We note that whether a board acted in the best interests of its
       association is a relevant consideration when the governing documents are ambiguous and a
       board makes a discretionary decision. Davis v. Dyson, 387 Ill. App. 3d 676, 693 (2008). In
       that situation, the court applies the business judgment rule, which considers whether the
       decision was in the best interests of the association, to determine if the board breached its
       fiduciary duty. Stamp v. Touche Ross & Co., 263 Ill. App. 3d 1010, 1015 (1993). This court
       in Davis explained that the business judgment rule does not apply where there is an overt
       violation to the bylaws. Davis, 387 Ill. App. 3d at 693. Here, the plain language of the bylaws
       is clear.
¶ 32        Forest Villa points out that, contrary to Alliance’s contention, the Board is obligated to
       strictly comply with the bylaws. In support, Forest Villa cites Palm v. 2800 Lake Shore Drive
       Condominium Ass’n, 2014 IL App (1st) 111290. In Palm, this court held that, among other
       things, the board was not authorized to hold meetings closed to the general association, vote
       by email, enter into contracts without approval by vote of the board, or fail to vote on
       litigation matters because these actions violated the declaration, the Act, and the Illinois
       General Not for Profit Corporation Act. Id. ¶ 1 (citing 805 ILCS 105/101.01 (West 2004)).
       Additionally, the court found that the board’s failure to mail notice of association meetings,
       which violated the declaration but not the Act, was unauthorized and a breach of its fiduciary
       duty. Id. ¶ 128.2
¶ 33        We agree that a board must strictly comply with the bylaws. In addition to Palm, this
       court has invariably found that a board must follow an association’s bylaws. See Goldberg,
       2012 IL App (1st) 110620; Davis, 387 Ill. App. 3d 676; Litvak v. 155 Harbor Drive
       Condominium Ass’n, 244 Ill. App. 3d 220, 226 (1993); Wolinsky v. Kadison, 114 Ill. App. 3d
527 (1983). Alliance attempts to distinguish these cases by asserting that they do not have
       bearing on a board’s authority to enter into contracts with third parties. However, Alliance
       points to no authority to demonstrate that they are inapplicable and we have found none. We
       note that to the extent a third party makes a claim under a void contract, relief in such
       circumstances would have to be granted under equitable principles such as quantum meruit.
       Fleissner v. Fitzgerald, 403 Ill. App. 3d 355, 369 (2010) (holding that a party can recover
       based on equitable principles where a contract is unenforceable but not against public
       policy); see also Filipiak v. Zintak, 264 Ill. App. 392, 397 (1932).
¶ 34        Equitable relief would never be appropriate in this case, however, because once the initial
       Agreement was signed, Alliance had expressly assumed a fiduciary duty to be knowledgeable
       of Forest Villa’s bylaws and to assist the Board in compliance with those terms. Although
       Skourlis testified that customarily he does not review an association’s governing documents
       before entering into a contract, in this case, the subject contract was the renewal, and not the
       initial contract. When the Agreement was renewed, Alliance had been managing Forest Villa
       for almost three years and was, or should have been, well versed in its governing documents.
       Therefore, not only is Alliance not justified in its claim that it believed the Board had
       authority to renew the Agreement for a 36-month term, but failing to inform the Board of this

           2
            In Palm, the board’s sending of notice violated the declaration, whereas here, the Board violated
       the bylaws. The declaration and bylaws, however, are both governing documents beyond the scope of
       the Act. Moreover, the bylaws are recorded with the declaration. 765 ILCS 605/18 (West 2012).
       Therefore, we find Palm persuasive on this issue.

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       restriction was a breach of its fiduciary duty. Moreover, we note that Alliance was fully
       compensated for the services it performed.
¶ 35       Finally, Alliance contends that the Board’s consistent disregard for the bylaws is
       evidence that it had the power to ignore them. In support of this contention, Alliance cites
       other instances where the Board’s actions did not comply with the bylaws. This argument is
       without merit. Evidence of other violations does not validate the Board’s waiver of the
       bylaws in executing a 36-month contract. Regardless of what the officers believed their
       powers to be and the number of times the Board allegedly violated the bylaws, each time it
       waived them, it exceeded its authority. Palm, 2014 IL App (1st) 111290.
¶ 36       Accordingly, we reject Alliance’s argument that the Board had the power to waive the
       bylaws and conclude that the explicit language in the bylaws indicates that the Board lacked
       authority to execute the 36-month Agreement. Without authority, the contract is void and
       Alliance cannot recover under its terms. Because we find that the contract was void ab initio,
       we do not reach Alliance’s arguments that liquidated damages are not unjust enrichment and
       that Forest Villa improperly terminated the Agreement.

¶ 37                                     Mutual Mistake of Fact
¶ 38       We are mindful of Alliance’s argument that the parties’ ignorance of the provision in the
       bylaws restricting the Board was a mutual mistake of fact and, therefore, the Agreement
       renewal was voidable and could be ratified. However, even if we did not find that the
       contract was void, this argument must fail.
¶ 39       When there is a mutual mistake of fact as to a material term, the contract is voidable and
       can be rescinded by an adversely affected party unless that party bears the risk of the
       mistake. Jordan v. Knafel, 378 Ill. App. 3d 219, 234 (2007); Restatement (Second) of
       Contracts § 152 (1981). A mutual mistake exists where both parties come to an
       understanding, then, unintentionally, a drafted and signed contract fails to express the true
       agreement. Cameron v. Bogusz, 305 Ill. App. 3d 267, 272 (1999) (citing Village of Oak Park
       v. Schwerdtner, 288 Ill. App. 3d 716, 718 (1997)). “A voidable contract is one where one or
       more parties have the power, by a manifestation of election to do so, to avoid the legal
       relations created by the contract, or by ratification of the contract to extinguish the power of
       avoidance.” Restatement (Second) of Contracts § 7 (1981); Illinois State Bar Ass’n Mutual
       Insurance Co., 355 Ill. App. 3d at 164.
¶ 40       Here, both parties understood that the Agreement renewal for management services was
       for 36 months. Neither party believed that the terms or the subject matter of the renewal was
       any different than what was reflected in the written Agreement. This is not a circumstance
       where the parties’ true intention was not memorialized in the Agreement because of a
       mistake. Forest Villa intended to compensate Alliance for 36 months and Alliance intended
       to provide management services for that period. Rather, here, the error in the formation of the
       contract resulted from both parties’ lack of awareness of the restriction in the bylaws. In
       addition, generally, under Illinois law, a party cannot claim a mutual mistake when the
       mistake is the result of that party’s lack of due care. Cameron, 305 Ill. App. 3d at 272 (“A
       mistake of fact is a mistake, ‘not caused by the neglect of a legal duty on the part of the
       person making the mistake ***.’ ” Id. (quoting Boyd v. Aetna Life Insurance Co., 310 Ill.
       App. 547, 555 (1941))). Here, as noted above, Alliance should have been aware at the time
       the Agreement renewal was signed that the Board did not have authority to enter into the

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       contract. Alliance cannot now claim that there was a mutual mistake for its benefit. Thus, in
       this case, there was no mutual mistake of fact.
¶ 41       Moreover, it is evident that Forest Villa could not have ratified the Agreement renewal.
       “ ‘For ratification to occur, the principal must, with full knowledge of the act, manifest an
       intent to abide and be bound by the transaction.’ ” Gambino v. Boulevard Mortgage Corp.,
       398 Ill. App. 3d 21, 56 (2009) (quoting Stathis v. Geldermann, Inc., 295 Ill. App. 3d 844, 858
       (1998)). Here, the Board did not have knowledge of the restriction in the bylaws during the
       relevant period. In fact, less than two weeks into the renewal, when the Board had learned of
       the restriction, it sent a letter to Alliance informing it that Forest Villa wished to terminate
       the contract. Thus, Forest Villa could not have manifested an intent to ratify the Agreement
       renewal.

¶ 42                                        CONCLUSION
¶ 43      For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.

¶ 44      Affirmed.

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