Butler v. Harris

2014 IL App (5th) 130163, 13 N.E.3d 380
Appellate Court of Illinois·Decided June 27, 2014·No. 5-13-0163·Unpublished·Cited by 2 cases

Opinion

NOTICE

2014 IL App (5th) 130163

Decision filed 06/27/14. The text of this decision may be NO. 5-13-0163 changed or corrected prior to the filing of a Petition for Rehearing or the disposition of IN THE the same.

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

ROBERT BUTLER and ELIZABETH BUTLER, ) Appeal from the ) Circuit Court of

Plaintiffs-Appellees and Cross-Appellants, ) Madison County.

)

v. ) No. 09-SC-5187 )

MARK HARRIS, )

)

Defendant-Appellant and Cross-Appellee ) Honorable ) Thomas W. Chapman,

(Lisa Harris, n/k/a Lisa Bohnenstiehl, Defendant). ) Judge, presiding.

JUSTICE GOLDENHERSH delivered the judgment of the court, with opinion.

Presiding Justice Welch and Justice Cates concurred in the judgment and opinion.

OPINION

¶1 Plaintiffs, Robert and Elizabeth Butler, filed a two-count complaint against defendants, Mark Harris and Lisa Harris (now Lisa Bohnenstiehl due to defendants' divorce), to recover between $3,200 and $4,000 in septic system repairs and over $32,000 in attorney fees. Count I alleged common law fraud, and count II alleged a violation of the Residential Real Property Disclosure Act (Disclosure Act) (765 ILCS 77/1 et seq. (West 2008). After a bench trial in the circuit court of Madison County, the trial court entered judgment in favor of defendants on count I and a judgment in favor of plaintiffs

on count II in the amount of $12,000. Mark Harris filed a timely notice of appeal, raising the following two issues: (1) whether the trial court erred in finding that the standard of proof in a case based upon the Disclosure Act is preponderance of the evidence, and (2) whether the trial court erred in finding defendants violated the Disclosure Act. Plaintiffs filed a cross-appeal in which they raise the following issues: (1) whether the trial court erred in refusing to find defendants committed fraud, and (2) whether the trial court erred in failing to award them all of their damages and attorney fees. We affirm in part and reverse in part on the basis that plaintiffs failed to meet their burden of proof on either count and remand with directions that each party pay his or her own attorney fees. We note that Lisa Bohnenstiehl has not participated in this appeal.

¶2 BACKGROUND

¶3 On October 30, 2008, plaintiffs purchased a house located at 20 Creekwoods Trail in Highland from defendants. Approximately six months after moving into the home, plaintiffs received notice from Madison County that the septic system was not in compliance with its codes and ordinances and that the county had received complaints regarding drainage on plaintiffs' property. As a result, on October 30, 2009, plaintiffs filed a two-count small claims complaint against defendants in which they alleged that defendants fraudulently misrepresented the condition of the property with the intent to induce plaintiffs to complete the purchase and failed to disclose the septic system defects and prior drainage problems on the residential real property disclosure report form (disclosure report form) required by the Disclosure Act (765 ILCS 77/35 (West 2008)).

Plaintiffs alleged that as of the date of filing the complaint their damages exceeded $5,000, but were less than $10,000.

¶4 On May 27, 2010, Lisa Bohnenstiehl filed a pro se motion to continue the case, which was set for June 2, 2010. On June 2, 2010, the only party to appear was defendant Mark Harris. The trial court entered a judgment in favor of defendants and ordered plaintiffs to pay costs. Plaintiffs filed a motion to vacate the default judgment in which they explained that they did not appear after having been advised that Bohnenstiehl was granted a continuance because she was having surgery on June 2, 2010. The trial court denied the motion to vacate, specifically stating that the judgment entered on June 2, 2010, was not a "default judgment" because the case was set for trial and no continuance was granted. Plaintiffs appealed to this court. In an unpublished order, we reversed and remanded with directions that defendant Bohnenstiehl's motion to continue be set for hearing and noted that even if the motion to continue were to be denied, plaintiffs must be given the opportunity to have the matter heard on the merits. Butler v. Harris, No. 5-10-0463 (2011) (unpublished order pursuant to Supreme Court Rule 23).

¶5 While the initial appeal was pending, Bohnenstiehl filed for bankruptcy and a stay was issued. Plaintiffs obtained a relief from stay. On July 18, 2012, plaintiffs filed their first amended complaint. Plaintiffs again alleged that when defendants sold their home to plaintiffs, defendants knew of defects with the home's septic system, but did not disclose those defects and reported that they had no problems with the septic system. The first amended complaint raised the same counts of common law fraud and a violation of the

Disclosure Act, but due to attorney fees, plaintiffs now alleged their damages were "more than $10,000 but less than $50,000."

¶6 A bench trial was conducted on January 29 and 30, 2013, during which the following evidence was adduced. Plaintiffs and defendants entered into negotiations for the purchase of property. Plaintiffs received a disclosure report form before they made an offer on the property. The form was signed by both defendants, but at different times due to the fact they were separated at the time. On the form, defendants checked "No" to the question, "I am aware of material defects in the septic, sanitary, sewer, or other disposal system." However, defendants made a notation on the form in which they specifically stated: "In the past, the ejector pump has backed up twice. Replaced GFI[−] has not happened since."

¶7 Defendants' original asking price was $242,000. Elizabeth Butler testified that she and her husband were not willing to pay that much, so they originally ruled out the home. However, a few months later she noticed the price was lowered to $185,000, so they called the realtor and went to look at the home. Before making an offer, Robert Butler prepared a sheet outlining problems with the property and the estimated costs of repairs. This sheet was submitted along with plaintiffs' offer to purchase the home and was entered into evidence as exhibit 11 by defendants. The sheet that outlines the home's problems specifically lists flooring, roof, furnace, central air, and septic system as items which need to be repaired. The sheet also contains an estimated repair value on all of these items, except the septic system repair. The sheet specifically states that the costs of such repairs are "unknown."

¶8 On August 21, 2008, plaintiffs offered to purchase the home for $162,375. Along with the offer, they submitted the sheet on which Robert Butler set forth problems with the home in the hope that they could justify their low offer. Defendants accepted the offer, and closing was scheduled for September 21, 2008. An addendum was later added as more time was needed to complete the sale because the sale of the property was a "short sale" and the bank needed more time to decide whether to accept the offer. Closing was extended to November 7, 2008. An addendum to the original contract specifically provided, "Property is being sold in an 'as is' condition."

¶9 Elizabeth Butler testified that prior to closing, plaintiffs hired both a home inspector to do an inspection of the property and Frank's Septic Company to do a more thorough inspection of the septic system. Frank's report specifically states:

"Pump out [and] inspect tank- precast aeration tank- Jet tank aprox 1500 Gal-

Tank looks ok- Inlet line open water level good- motor working media looks good- Needs rock in back filter vaults by chlorinator- needs chlorine in tube-

Discharge open- Discharge area may need new rock at some point."

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Butler v. Harris, 2014 IL App (5th) 130163, 13 N.E.3d 380 (Ill. Ct. App. 2014).

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