Articles Posted in Real-Estate Litigation

Where circuit court did not err when it ordered plaintiff and defendant to each pay their own attorneys’ fees in case for breach of a lease agreement because the plaintiff and defendant both won and lost on some of their claims, and neither party prevailed on claims that were significantly complex.

Oak Forest Properties is a landlord that operates a strip mall in Oak Forest, Illinois. RER Financial is a franchisee of a consumer tax preparation business. The two companies entered into a commercial lease agreement. Oak Forest agreed to divide one of its buildings into two spaces, and RER agreed to lease one of those spaces. Oak Forest agreed to take on the construction costs of the division, and RER agreed to bear the costs of any interior construction of the space after the division.

The agreement required Oak Forest to finish construction before RER started any aspects of its interior build-out. The parties, however, ignored that requirement and combined their efforts to divide and build-out space, using the same contractor and a single building permit for all work. Eventually, the parties’ relationship broke down and RER exercised an option to terminate the lease. Continue reading ›

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”.
Derek Brandt is a shareholder of Simmons, Browder, Gianaris, Angelides & Barnerd, the law firm representing the plaintiffs in the case. Brandt argues that the class certification will be beneficial to both the plaintiffs and the defendants. “It gives authority to the defendant, so that no one later can come back and ask ‘what about me?’ All of the plaintiffs would be included in whoever is in the class,” says Brandt. “It also gives the plaintiffs an advantage because they can proceed in mass.”

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.

Continue reading ›

Most businesses are of the brick and mortar variety, meaning that they have a physical location where they conduct operations, and as a result these business have to either buy or rent properties to acquire the space they need. At Lubin Austermuehle, our Elgin business attorneys have handled many commercial and industrial building sale disputes, and are always researching the law in that area to better serve our clients. Napcor Corporation v. JP Morgan Chase Bank, NA is one such case about material misrepresentations made in the sale of a commercial property.

In Napcor Corporation v. JP Morgan Chase Bank, NA, Plaintiff purchased a large commercial building from Defendants. Prior to the sale, the building’s roof allegedly began to leak significantly, and the building’s broker performed an inspection to determine the extent of the damage. The broker allegedly concluded that the existing roof needed to be removed and replaced to fix the problems. Instead of replacing the damaged roof, Defendant constructed a second roof over the first because it was a cheaper option. This second roof was constructed in spite of the fact that Defendant was allegedly warned that the new roof would be susceptible to being torn off by winds. Additionally, the original leakage problem allegedly remained after the new roof’s construction.

The building was then listed for sale, and the pertinent part of the listing stated that the building had a “new roof in 1994 (tear off).” In 1996, Plaintiff purchased the building for $1.309 million through a contract where Plaintiff agreed to accept the building “as is”, and had a 30-day due diligence period. Plaintiff was allegedly not made aware of the leaks, and relied upon Defendant’s alleged representation that the old roof had been torn off. Upon moving into the building, Plaintiff allegedly found the leakage problem and over several years three sections of the roof blew off on three different occasions. Plaintiff then filed suit for fraudulent misrepresentation, and was awarded a $1.2 million judgment after a trial by jury.

Defendant appealed the decision and asked for a judgment notwithstanding the verdict and a new trial based upon faulty jury instructions and the exclusion of evidence that Plaintiff agreed to accept the building in its “as is” condition. Defendant contended that the jury instruction failed to state that Plaintiff had the burden of proof to show all the elements of fraud by clear and convincing evidence. The trial court denied Defendant’s motion.

The Appellate Court affirmed the judgment and held that the trial court did not abuse its discretion by denying Defendant’s motion for a new trial. The Court made its decision because the ‘as is’ language in the purchase agreement did not preclude Plaintiff from claiming it relied on the alleged misrepresentations, and the clause also did not serve as a defense to fraud. As such, the Court decided, the verdict was not against the manifest weight of the evidence. Finally, the Court denied the request for a new trial because the lower court used an IPI civil jury instruction that accurately stated the law, and in doing so, the trial court did not abuse its discretion.

Continue reading ›

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.

Continue reading ›

Earlier this year, the Appellate Court of Illinois handed down an opinion that has implications for businesses with leased premises. Our Aurora business attorneys found Bright Horizons Children’s Centers LLC v. Riverway Midwest LLC, which is a dispute regarding a commercial lease that was initially filed in Cook County.

Bright Horizons is a company that operates day care facilities across the state of Illinois. The company entered into a ten year commercial lease agreement with Riverway for a property in Rosemont, Illinois. The lease agreement contained restrictive language allowed for the building to only be used for a child-care center. The agreement also contained a relocation provision which gave Riverway the right to relocate Bright Horizons, upon 180 day written notice, to a different property of equal quantity and quality to the original premises. The dispute between these two parties arose when Riverway sought to invoke the relocation clause less than one year into the lease.

Riverway attempted to exercise the relocation provision on three occasions. The first attempt was unsuccessful because the alternative premises allegedly presented to Bright Horizons did not meet the requirements of the lease agreement. Bright Horizons accepted the second space offered by Riverway, but Riverway withdrew their notice before renovating the new facilities to meet the requirements of the lease. Riverway then proposed a third relocation premises, and allegedly informed Bright Horizons that if they were unable to agree on an alternative space, Riverway would terminate the lease in 180 days from the date of the notice. This third property allegedly ran afoul of state licensing standards for child care facilities and the Illinois Administrative Code. Bright Horizons informed Riverway that the third property did not meet Illinois’ licensing standards and could not be legally used as a child care facility. In response, Riverway informed Bright Horizons that they were in default of the lease and that Bright Horizons could cure their default by relocating to the third alternative premises.

Bright Horizons then filed for declaratory judgment requesting that the trial court find: 1) that they were not in breach of the lease, 2) that Riverway could not terminate the lease, and 3) that Riverway had failed to properly exercise the relocation clause of the lease agreement. Bright Horizons then filed for summary judgment on these issues, which was granted by the trial court. Riverway then appealed the trial court’s ruling. On appeal the Appellate Court agreed with the trial court’s grant of summary judgment in favor of Bright Horizons. In so ruling, the Court held that the lease allowed for one permitted use of the premises and required that Bright Horizons comply with all laws and regulations, including the state child-care licensing standards. The Court held that Bright Horizons’ relocation to the proffered space would violate state regulations and cause Bright Horizons to be in breach of the lease due to their inability to operate a child-care. As such, the Court affirmed the ruling of the trial court granting summary judgment in favor of Bright Horizons.

Continue reading ›

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.

Continue reading ›


A recent ruling clarifying how Illinois state law applies to city ordinances caught the attention of our Chicago consumer protection attorneys. In Landis et al v. Marc Realty et al, Ill. Sup. Co. No. 105568 (May 21, 2009), tenants Ana and Ken Landis signed a lease for a Chicago apartment, starting June 1, 2001. They paid a security deposit of $8,400. However, they found a persistent leak in the apartment that the defendants, Marc Realty LLC and Elliott Weiner, were not able to fix. They came to a mutual agreement to vacate in exchange for being released from the lease and left in November of 2001. In April of 2006, they filed suit under Chicago’s Residential Landlord Tenant Ordinance, alleging that the defendants never paid back their security deposit.

Under the RLTO, landlords must repay security deposits, or the balance of such deposits, within 45 days of the date tenants move out or within seven days after the tenant gives notice. If they hold on to the deposits for more than six months, they must pay interest that accrues from the day the rental term began. If they fail to make either payment, tenants are entitled to sue for twice the security deposit plus interest. Neither party in this case disputed this. Instead, Marc Realty moved to dismiss the complaint as untimely under the two-year statute of limitations for a statutory penalty in Illinois. The plaintiffs argued that the RLTO did not provide a statutory penalty, but instead was governed by the five-year miscellaneous statute of limitations or the ten-year statute of limitations applied to contracts. The trial and appellate courts sided with defendants, and plaintiffs appealed.

The majority started by noting that the case rests on the proper interpretation of the phrase “statutory penalty.” It first took up the question of whether a city ordinance qualifies as a statute, which the plaintiffs argued that it did not. The appeals courts are split on this question, the Supreme Court wrote, and prior Supreme Court cases don’t quite apply. The court assumed that the Legislature intended the word “statutory” to take its ordinary dictionary definition, but found that dictionaries are also split on the issue. Applying the general principle that courts should give statutes their broadest possible meaning, the Supreme Court found that the Legislature intended “statutory” to encompass municipal ordinances as well as state law. It noted that this is most fair because it gives all claims for statutory penalties in Illinois the same statute of limitations.

The court next disposed of the plaintiffs’ arguments about the word “penalty.” Under McDonald’s Corp. v. Levine, 108 Ill. App. 3d 732 (1982), statutory penalties must impose automatic liability for violation; set forth a predetermined amount of damages; and impose damages without regard to actual damages. The plaintiffs concede that the RLTO meets the first test, but said the damages are not predetermined because a dollar amount isn’t specified. It doesn’t need to, the court wrote; the formula provided by the statute is sufficient to be counted as “predetermined.” It also dismissed the plaintiffs’ argument that they are seeking actual damages, noting that other areas of the RLTO specify actual damages, but this one does not. The ordinance also says nothing about the contractual obligations between landlords and tenants, the court said, despite plaintiffs’ argument that they were seeking to enforce contractual rights. Thus, the RLTO does impose a “statutory penalty” — and the lower courts’ judgments were affirmed.

In a dissent, Justices Kilbride and Karmeier disagreed with the majority on the question of whether the Legislature intended to include municipal ordinances in the definition of “statutory penalty.” Saying that courts must interpret laws according to the intent of drafters at the time, the justices wrote that “statutory” took only the state-law meaning in 1874, when the law was written. Furthermore, several Illinois Supreme Court precedents show that this interpretation was in use by courts of the time as well: “This court’s precedent could not be more clear.” And the result in this case contradicts a more recent ruling in Clare v. Bell, 378 Ill. 128 (1941), they wrote, which the majority mentioned but failed to adequately distinguish, leaving an inconsistent ruling. The justices also dissented from the majority’s denial of a rehearing.

Continue reading ›


Our Illinois business and commercial emergency attorneys were interested to read an article about a lawsuit suggesting corporate “dirty tricks” by the parent company of the Jewel-Osco chain of grocery stores. Rubloff Development Group Inc., a commercial real estate developer, made that accusation in a lawsuit filed in Chicago federal court in June. According to the Chicago Tribune’s Chicago Breaking Business blog, Rubloff believes Jewel-Osco hired Saint Consulting, a Massachusetts company, in secret to “harass and interfere” with a shopping center Rubloff was trying to develop in Munedelin, Ill., with a Wal-Mart as its “anchor.” Rubloff and other developers are seeking a declaratory judgment that documents in its possession do not contain confidential trade secrets belonging to Saint, as Saint has alleged.

According to Rubloff’s complaint (PDF), file in late June, Rubloff has documents it believes show that Jewel-Osco “secretly retained” Saint to delay or stop development of shopping centers slated to contain Wal-Mart stores, which might compete with Jewel-Osco. The complaint alleges that Saint is responsible for “false statements and sham litigation” against several of the plaintiffs’ developments, particularly the one in Mundelin. Sometimes, this was enough to make the Wal-Mart pull out, causing tens of millions of dollars in costs to the developers, it says. Rubloff claims it sent SuperValu a letter in early May with these accusations. Although that letter did not name Saint and was not sent to Saint, the complaint said, Saint responded a week later with a threat to sue Rubloff for “wrongful possession of … confidential, proprietary business information.”
Rubloff and its co-plaintiffs responded with this lawsuit. In it, they ask the court for a declaratory judgment that the information at issue is not privileged, confidential or trade secrets. They also ask the court to enjoin the defendants from spoiling any evidence, something they claim the defendants do routinely, and request damages for any evidence already spoiled. If permitted to submit the controversial information to the court under seal, they say they can raise claims of racketeering, tortious interference with business opportunities, fraud, antitrust claims and more, with tens of millions in potential damages.

As Chicago business emergency lawyers, we believe a declaratory judgment is a smart way for Rubloff and the other plaintiffs to strike first and avoid potentially damaging litigation in Massachusetts. A declaratory judgment is a court order declaring the legal relationships and obligations between the parties. In this case, it is likely to be a judgment declaring whether the documents at issue are trade secrets that deserve protection under Illinois law. If Saint is bluffing about this, filing for a declaratory judgment allows Rubloff to establish that fact without fighting a frivolous lawsuit, and in its own home court rather than halfway across the United States. A declaratory judgment in Rubloff’s favor would also allow the developer to go forward with its own business lawsuit against Saint and Jewel-Osco.

Continue reading ›


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.

Continue reading ›

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.

Contact Information