Breckenridge v. Cambridge Homes, Inc.

616 N.E.2d 615, 246 Ill. App. 3d 810, 186 Ill. Dec. 425, 1993 Ill. App. LEXIS 1027
CourtAppellate Court of Illinois
DecidedJuly 1, 1993
Docket2-92-1044
StatusPublished
Cited by42 cases

This text of 616 N.E.2d 615 (Breckenridge v. Cambridge Homes, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Breckenridge v. Cambridge Homes, Inc., 616 N.E.2d 615, 246 Ill. App. 3d 810, 186 Ill. Dec. 425, 1993 Ill. App. LEXIS 1027 (Ill. Ct. App. 1993).

Opinion

JUSTICE BOWMAN

delivered the opinion of the court:

Plaintiffs, George and Tricia Breckenridge, filed the present lawsuit in the circuit court of Lake County against defendant, Cambridge Homes, Inc., for common-law fraud (count I), violations of section 2 of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1989, ch. 1211/2, par. 262) (count II), and breach of implied warranty of habitability (count III) in the context of the plaintiffs’ purchase of a new residence from the defendant in December 1989. The case went to a jury trial, and a verdict was entered in favor of the plaintiffs on the breach of implied warranty count and against the plaintiffs on the common-law fraud count. The consumer fraud count was tried without a jury, and the court entered a judgment against the plaintiffs. On appeal, defendant asserts that (1) the plaintiffs waived their right to pursue a claim for breach of the implied warranty of habitability when they signed and initialed the contract provision containing a disclaimer of the implied warranty of habitability and therefore the trial court erred in failing to grant defendant’s motion for directed verdict on count III, and (2) the trial court erred in denying defendant’s post-trial motions for directed verdict and judgment notwithstanding the verdict on count III. On cross-appeal, the plaintiffs assert that the trial court erred in applying the elements of common-law fraud to the consumer fraud count, and that the finding of the trial court on that count was against the manifest weight of the evidence. We affirm in part and reverse in part.

In September 1989, the plaintiffs, George and Tricia Breckenridge, decided to purchase a new home from the defendant, Cambridge Homes, Inc. (Cambridge). George Breckenridge was a regional sales manager for several Japanese corporations, and his wife, Tricia, had been a chief lobbyist for the telecommunications industry as well as having owned two companies in the past. Plaintiffs had stopped and looked at model homes in the new Mill Creek Crossing subdivision in Gurnee being developed by the defendant. Plaintiffs were shown models by a salesman for the defendant named John Horowitz. On September 10, 1989, the plaintiffs viewed a home being built on lot 44 which was 70% to 75% completed. The plaintiffs decided to purchase this residence and gave the salesman a deposit of $1,000.

On September 17, 1989, John Horowitz prepared a standard home purchase agreement. Plaintiffs were asked to sign the contract and place their initials next to the bold-type language in paragraph 15, which was entitled “Limited Warranty.” Plaintiffs each testified that they read the -bold-type language of the contract, although neither plaintiff read the entire contract before initialing and signing. The bold type of the contract constituted about half of the “Limited Warranty” paragraph and most of the “Entire Agreement” paragraph, which was paragraph 19. The “Limited Warranty” paragraph contained the following language in bold type:

“15. LIMITED WARRANTY: *** NO WARRANTY, GUARANTEE, OR UNDER-TAKING WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE HOUSE AND CONSTRUCTION THEREOF, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE HOW WARRANTY, SHALL BIND OR OBLIGATE THE SELLER. ALL OTHER WARRANTIES, GUARANTEES AND UNDERTAKINGS ARE HEREBY EXPRESSLY DISCLAIMED. Specifically, but without limiting the generality of the fore-going, SELLER HEREBY EXPRESSLY DISCLAIMS THE IMPLIED WARRANTY OF HABITABILITY CREATED BY THE ILLINOIS CASE OF PETERSEN v. HUBSCHMAN CONSTRUCTION COMPANY, INC., AND ANY OTHER STATUTORY OR COMMON LAW IMPLIED WARRANTY OF HABITABILITY. THE CONSEQUENCE OF SUCH DISCLAIMER BY SELLER IS THAT SELLER’S SOLE AND EXCLUSIVE WARRANTY GIVEN TO PURCHASER IN CONNECTION WITH THIS AGREEMENT IS THE HOW WARRANTY. PURCHASER’S INITIALS ADJACENT TO THIS PARAGRAPH ARE INTENDED AS AND SHALL BE EVIDENCE OF PURCHASER’S ACKNOWLEDGEMENT OF SELLER’S DISCLAIMER OF SUCH IMPLIED WARRANTY OF HABITABILITY AND OF PURCHASER’S ACCEPTANCE OF THE HOW WARRANTY AS THE SOLE AND EXCLUSIVE WARRANTY OFFERED BY SELLER IN CONNECTION WITH THE SALE OF THE HOUSE.”

The “Entire Agreement” paragraph read as follows:

“19. ENTIRE AGREEMENT. This agreement and the matters expressly referred to herein constitute the entire Agreement between the Seller and Purchaser. NO REPRESENTATIONS, WARRANTIES, UNDERTAKINGS OR PROMISES, WHETHER ORAL, IMPLIED OR OTHERWISE, CAN BE MADE OR HAVE BEEN MADE BY EITHER SELLER, ITS AGENTS OR BROKERS, OR PURCHASER TO THE OTHER UNLESS EXPRESSLY STATED HEREIN OR UNLESS MUTUALLY AGREED TO IN WRITING BETWEEN SELLER AND PURCHASER. ALL AMENDMENTS, SUPPLEMENTS, OR RIDERS HERETO, IF ANY, SHALL BE IN WRITING EXECUTED BY BOTH PARTIES AND ATTACHED TO THIS AGREEMENT.”

Plaintiffs then placed their initials in the margin next to the disclaimer language indicating that they read the language and were accepting the HOW warranty. In addition, the “Limited Warranty” paragraph also contained the following language in small type: “Seller has delivered to Purchaser a booklet containing specimen copies of the insurance/warranty documents for the HOW Warranty and Purchaser hereby acknowledges receipt thereof and acceptance of the terms of said HOW Warranty.” At trial, Trida Breckenridge testified that the defendant’s salesman, John Horowitz, told plaintiffs “not to worry *** because the HOW warranty that [they] would get with the house would cover all defects or problems that [they] discovered in [their] house.” The plaintiffs also put down an additional $9,000 in earnest money at the time they signed the purchase agreement.

At trial, the defendant admitted that it has a policy of providing a specimen HOW warranty to prospective purchasers at the time of signing of the home purchase agreement. In this case, the defendant’s salesman did not provide the plaintiffs with the specimen HOW warranty before the purchase agreement was. executed. In addition, there was no evidence presented at trial that indicated that the plaintiffs requested a copy of the HOW warranty before signing the contract.

Although the defendant had the home scheduled for completion in mid-January 1990, the defendant agreed to accelerate the completion date on a rush basis to sometime in December 1989 at the plaintiffs’ request. A closing date was set for December 15,1989.

Prior to closing, defendant has-a policy of performing a procedure known as a “pre-walk inspection.” This inspection is done by the defendant’s service department one week prior to closing to see what needs to be done to get the house ready for closing. On December 8, 1989, Bruce Wilde, an employee of the defendant’s service department, examined the residence. However, Mr. Wilde did not conduct a typical prewalk inspection because the house was still being worked on.

On December 15, 1989, the home was not completed and ready for delivery to plaintiffs. Plaintiffs were given the option to close one week later to allow defendant to complete the house. Plaintiffs, against the advice of their attorney, decided to close on December 15, 1989, and take delivery subject to the unfinished work on the house. Their decision was based on the fact that they had movers scheduled to bring their belongings to the home that day. On the afternoon of December 15,1989, plaintiffs paid $367,370 for the property.

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Cite This Page — Counsel Stack

Bluebook (online)
616 N.E.2d 615, 246 Ill. App. 3d 810, 186 Ill. Dec. 425, 1993 Ill. App. LEXIS 1027, Counsel Stack Legal Research, https://law.counselstack.com/opinion/breckenridge-v-cambridge-homes-inc-illappct-1993.