Hachem v. Chicago Title Insurance Company

2015 IL App (1st) 143188, 46 N.E.3d 879

• Court: Appellate Court of Illinois
• Decided: December 14, 2015
• Docket: 1-14-3188
• Status: Unpublished

Opinion

2015 IL App (1st) 143188

FIRST DIVISION December 14, 2015

No. 1-14-3188

SANAA HACHEM and CHICAGO TITLE ) Appeal from the LAND TRUST COMPANY, a Corporation of ) Circuit Court of Illinois, as Trustee Under the Provisions of Land ) Cook County Trust Agreement dated 8/9/2012, Known as Trust ) Number 8002360019, ) ) Plaintiffs-Appellants, ) ) v. ) No. 13 L 6961 ) CHICAGO TITLE INSURANCE COMPANY; ) CHRISTOPER WEINUM; STEVEN WOLFE; ) and CHERYL WOLFE, ) Honorable ) Margaret Brennan, Defendants-Appellees. ) Judge Presiding.

JUSTICE HARRIS delivered the judgment of the court, with opinion. Presiding Justice Liu and Justice Connors concurred in the judgment and opinion.

OPINION

¶1 On May 21, 2012, plaintiff Hachem entered into a real estate contract for the purchase of

a residence located at 10353 S. Seeley Ave. in Chicago. After completing the purchase, plaintiff

Hachem searched the Cook County Recorder of Deeds and discovered that the property was part

of the Longwood Drive historical district. The ordinance designating the property as a landmark

was recorded in January 1982. Subsequently, plaintiffs made a claim with defendant Chicago

Title Insurance Company on the belief that the ordinance represented an encumbrance on the

title. Chicago Title denied the claim, and plaintiffs brought suit against Chicago Title, the agent No. 1-14-3188

who issued the policy, and the sellers of the house. Both sets of defendants filed motions to

dismiss pursuant to Section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West

2012)), which, after briefing, the circuit court granted. Plaintiff brought motions to reconsider

the dismissal of all defendants and additionally sought leave to file an amended complaint. The

circuit court denied those motions. Plaintiffs timely appealed.

¶2 Before this court plaintiffs raise the following issues: (1) whether the circuit court erred

in denying plaintiffs' oral motion to amend their complaint as it pertained to the Chicago Title

defendants; (2) whether the circuit court erred in granting the Wolfe defendants' motion to

dismiss with prejudice; (3) whether the circuit court erred when it denied plaintiffs' oral motion

to amend their complaint as it pertained to the Wolfe defendants; and (4) whether the circuit

court erred in denying plaintiffs' Motion to Reconsider and Motion to Amend Pleading. For the

reasons stated below, we affirm the circuit court's rulings in all respects.

¶3 JURISDICTION

The circuit court dismissed defendants Chicago Title Insurance Company and Christopher

Weinum on December 12, 2013. The circuit court dismissed defendants Steven and Cheryl

Wolfe on May 7, 2014. Plaintiff filed a Motion to Reconsider both dismissals on June 6, 2014.

At the same time Plaintiff also filed a Motion To Amend Complaint against all defendants. The

circuit court denied the Motion to Reconsider and Amend as to Chicago Title and Weinum on

June 23, 2014. The circuit court denied the Motion to Reconsider and Amend as to Steven and

Cheryl Wolfe on September 17, 2014. Plaintiffs timely filed a Notice of Appeal on October 16,

2014. Accordingly, this court has jurisdiction over this appeal pursuant to Illinois Supreme

Court Rule 301 (eff. Feb. 1, 1994) and Rule 303 (eff. May 30, 2008).

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¶4 BACKGROUND

¶5 On June 13, 2013, plaintiffs-appellants, Sanaa Hachem and Chicago Title Land Trust

Company, as trustee under the provisions of a land trust agreement dated August 9, 2012, known

as trust number 8002360019 (hereinafter plaintiffs), filed their complaint against defendants-

appellees, Chicago Title Insurance Company, Christopher Weinum, Steven Wolfe and Cheryl

Wolfe stemming from the sale of property located 10353 S. Seeley Ave., Chicago. Count I of

the complaint was directed at defendants Chicago Title Insurance Company and Weinum

(hereinafter Chicago Title defendants) and alleged Breach of Owners Policy of Title Insurance,

while count II was directed at Steven and Cheryl Wolfe (hereinafter Wolfe defendants) and was

not captioned. Attached to the complaint were the insurance policy issued by the Chicago Title

defendants, the sale agreement between plaintiffs and the Wolfe defendants, and a copy of the

landmark ordinance that was recorded with the title in January 1982.

¶6 Prior to the filing of the lawsuit, appellant entered into a contract for the purchase of

property located at 10353 S. Seeley Ave, Chicago. As part of the sale, the Wolfe defendants

agreed to provide commitment for title insurance. Pursuant to this agreement, the Wolfe

defendants purchased title insurance from the Chicago Title defendants. On August, 20, 2012,

the Wolfe defendants conveyed 10353 S. Seeley to the plaintiffs. Sometime after the transfer of

the property, plaintiffs searched the Cook County Recorder of Deeds and discovered that the

property was located within the Longwood Drive District and subject to Chicago's ordinance

concerning landmark properties. The ordinance had been recorded with the title on January 20,

1982.

¶7 Thereafter, plaintiff Hachem filed a claim with Chicago Title based on the policy

obtained by the Wolfe defendants. Plaintiff Hachem alleged that the landmark designation

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represented an encumbrance on the title. Chicago Title denied coverage. It stated that plaintiff

Hachem was not an insured as defined by the policy nor was the matter presented covered by the

policy. After the denial of coverage, plaintiffs brought this lawsuit.

¶8 On August 9, 2013, Chicago Title defendants moved to dismiss count I pursuant to

Section 2-615 (735 ILCS 5/2-615 (West 2012)). After briefing, on December 12, 2013, the

circuit court dismissed count I against the Chicago Title defendants with prejudice. The court

found that based on the policy language of the insurance agreement, plaintiffs' claim was

excluded from coverage. At the same hearing, plaintiffs made an oral motion to amend their

complaint, but it was denied.

¶9 On January, 13, 2014, appellants filed a motion to amend their complaint. However, the

motion lacked a proposed amended complaint and was never noticed up before the circuit court.

¶ 10 On February 13, 2014, the Wolfe defendants moved to dismiss count II pursuant to

Section 2-615. Id. After briefing, on May 7, 2014, the court granted the Wolfe defendants'

motion to dismiss with prejudice. Again, plaintiffs made an oral motion to amend their

complaint but it was denied.

¶ 11 On June 6, 2014, plaintiffs filed a motion captioned "Plaintiff's Combined 5/2-1203

Motion for Reconsideration and 5/2-616 Motion to Amend Complaint." (735 ILCS 5/2-1203, 2-

616 (West 2012)). Plaintiffs' motion was heard on June 23, 2014. The Wolfe defendants

requested and were granted an opportunity to file a written response. The Chicago Title

defendants asked that the court deny the motion without them filing a response. The circuit court

admonished plaintiff for failing to provide courtesy copies of the motion to the court. The court

then denied the plaintiffs' motion as it related to the Chicago Title defendants. On September 17,

2014, after briefing, the court denied plaintiffs' motion as it related to the Wolfe defendants.

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¶ 12 Plaintiffs timely filed a Notice of Appeal on October 16, 2014, which was later corrected

via an amended Notice.

¶ 13 ANALYSIS

¶ 14 Plaintiffs raise the following issues on appeal: (1) whether the circuit court erred in

denying plaintiffs' oral motion to amend their complaint as it pertained to the Chicago Title

defendants; (2) whether the circuit court erred in granting the Wolfe defendants' motion to

dismiss with prejudice; (3) whether the circuit court erred when it denied plaintiffs' oral motion

to amend their complaint as it pertained to the Wolfe defendants; and (4) whether the circuit

court erred in denying plaintiffs' Motion to Reconsider and Motion to Amend Pleading. 1 For the

following reasons we affirm the rulings of the circuit court.

¶ 15 First, plaintiffs challenge the circuit court's order denying their oral motion to amend

their complaint against the Chicago Title defendants. "Whether to allow an amendment of a

complaint is a matter within the sound discretion of the trial court, and, absent an abuse of

discretion, the court's determination will not be overturned on review." Village of Wadsworth v.

Kerton, 311 Ill. App. 3d 829, 842 (2000). "An abuse of discretion will be found only where no

reasonable person would take the view adopted by the trial court." Keefe-Shea Joint Venture v.

City of Evanston, 364 Ill. App. 3d 48, 61 (2005).

¶ 16 Section 2-616(a) of the Code (735 ILCS 5/2-616(a) (West 2014)) provides that at any

time before final judgment, the court may permit amendments on just and reasonable terms to

enable the plaintiff to sustain the claim brought in the suit. Given the broad discretion a trial

court exercises in ruling on motions to amend pleadings prior to final judgment, a court should

not find that the denial of a motion to amend is prejudicial unless there has been a manifest abuse

1 This court notes that plaintiffs do not challenge the circuit court's dismissal of the Chicago Title defendants with prejudice.

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of discretion. Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263, 273-74 (1992). In

considering whether a circuit court abused its discretion in ruling on a motion for leave to file an

amended complaint, the reviewing court considers the following factors: “(1) whether the

proposed amendment would cure the defective pleading; (2) whether other parties would sustain

prejudice or surprise by virtue of the proposed amendment; (3) whether the proposed amendment

is timely; and (4) whether previous opportunities to amend the pleading could be identified.” Id.

273–74.

¶ 17 The above factors apply to amendments proposed prior to final judgments. After final

judgment, pleadings may be amended to conform the pleadings to the proof. See 735 ILCS 5/2-

616(c) (West 2014). Where a complaint is dismissed with prejudice and does not include a

statement allowing the plaintiff leave to amend, an involuntary dismissal order is final. Compton

v. Country Mutual Insurance Co., 382 Ill. App. 3d 323, 332 (2008); see also Folkers v. Drott

Manufacturing Co., 152 Ill. App. 3d 58, 67 (1987) (noting that it is well settled that the dismissal

of a cause of action constitutes a final judgment).

¶ 18 The circuit court dismissed the complaint against the Chicago Title defendants in

December 2013. That dismissal was with prejudice. The transcript from that day reveals that it

was only after the circuit court granted the dismissal with prejudice that plaintiffs made an oral

motion to amend their complaint. The circuit court's dismissal of the plaintiffs' complaint

constituted a final judgment, after which the plaintiffs had no statutory right to amend. Plaintiffs

did not explain how they would cure the defective pleading, or why they had not sought leave to

amend before this point. Based on these facts, we find that the circuit court did not abuse its

discretion when it denied the plaintiffs' untimely oral motion for leave to file an amended

complaint.

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¶ 19 We similarly find that the circuit court did not err in denying plaintiffs' Motion for Leave

to Amend filed on June 6, 2014. This motion was filed 6 months after the dismissal with

prejudice. Plaintiff never explained the delay in filing. Moreover, plaintiffs' amended count I

was identical to the previously filed count I. Accordingly, the circuit court did not abuse its

discretion when it denied plaintiffs' Motion for Leave to Amend filed on June 6, 2014.

¶ 20 Next, plaintiffs contend the circuit court erred when it denied their Motion to Reconsider

the dismissal of their complaint against the Chicago Title defendants. Section 2-1203 of the

Code provides that “[i]n all cases tried without a jury, any party may, within 30 days after the

entry of the judgment or within any further time the court may allow within the 30 days or any

extensions thereof, file a motion for a rehearing, or a retrial, or modification of the judgment or

to vacate the judgment or for other relief.” 735 ILCS 5/2-1203 (West 2014). The decision to

grant or deny a motion for reconsideration lies within the discretion of the circuit court and will

not be reversed absent an abuse of that discretion. North River Insurance Co. v. Grinnell Mutual

Reinsurance Co., 369 Ill. App. 3d 563, 572 (2006). The intended purpose of a motion to

reconsider is to bring to the court's attention newly discovered evidence, changes in the law, or

errors in the court's previous application of existing law. Id.

¶ 21 The circuit court was correct to deny plaintiffs' Motion to Reconsider the dismissal of the

complaint against the Chicago Title defendants. As previously stated, the circuit court dismissed

the complaint against the Chicago Title defendants in December 2013. Plaintiffs filed their

Motion to Reconsider in June 2014, some six months after the dismissal with prejudice. Section

2-1203 required plaintiffs' motion to be filed within 30 days of the December 2013 dismissal.

Since the motion was not brought within 30 days, the motion was not timely, and the circuit

court did not abuse its discretion in denying an untimely motion.

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¶ 22 Next, the plaintiffs argue that the circuit court erred in granting the Wolfe defendants

section 2-615 motion to dismiss with prejudice. A section 2-615 motion to dismiss attacks the

legal sufficiency of claims based on defects apparent on the face of the pleading. See Marshall

v. Burger King Corp., 222 Ill. 2d 422, 429 (2006). A section 2-615(a) motion presents the

question of whether the facts alleged in the complaint, viewed in the light most favorable to the

plaintiff, and taking all well-pleaded facts and all reasonable inferences that may be drawn from

those facts as true, are sufficient to state a cause of action upon which relief may be granted.

Reynolds v. Jimmy John's Enterprises, LLC, 2013 IL App (4th) 120139, ¶ 25 citing 735 ILCS

5/2-615(a) (West 2010). In ruling on a section 2-615 motion, the court only considers (1) those

facts apparent from the face of the pleadings, (2) matters subject to judicial notice, and (3)

judicial admissions in the record. Gillen v. State Farm Mutual Automobile Insurance Co., 215 Ill

.2d 381, 385 (2005). A section 2-615(a) motion dismissal is reviewed de novo. Reynolds, 2013

IL App (4th) 120139, ¶ 25. Additionally, it is well established exhibits relied on in pleading a

complaint are considered part of it. Gore v. Indiana Insurance Co., 376 Ill. App. 3d 282, 289

(2007). Where allegations made in the body of the complaint conflict with facts disclosed in the

exhibits, the exhibits will control and the allegations will not be taken as true in evaluating the

sufficiency of the complaint. Bajwa v. Metropolitan Life Insurance Co., 208 Ill. 2d 414, 431

(2004).

¶ 23 Count II of plaintiffs' complaint was directed at the Wolfe defendants but failed to

specify a legal theory under which relief was sought. Count II incorporated various facts

concerning the underlying real estate transaction, but also incorporated as exhibits the sale

agreement and recorded landmark ordinance. The complaint alleges that upon searching the

Recorder of Deeds, plaintiffs discovered that the property was subject to Chicago's Landmark

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Ordinance. A copy of the ordinance was recorded with the deed to property on January 20,

1982, and showed that the property was part of the Longwood Drive District. As part of a

historical district, any building permit would need to be approved by the Commission on

Chicago Historical and Architectural Landmarks. After pleading these facts, plaintiffs alleged

that they were damaged by Wolfe defendants' (1) failure to disclose the identified encumbrance

and (2) make the proper identification of property as a Chicago landmarked property.

¶ 24 Plaintiffs' first claim must fail because the parties' agreement did not require the Wolfe

defendants to disclose the historical designation, and plaintiffs agreed to take the property subject

to all restrictions of record. 2

¶ 25 The Wolfes' contractual obligation required them to convey good and marketable title

subject to various conditions including restrictions of record. Paragraph 15 of the contract

between plaintiffs and the Wolfe defendants states, "Title when conveyed will be good and

merchantable, subject only to: general real estate taxes not due and payable at the time of

Closing; covenants, conditions, and restrictions of record; and building lines and easements, if

any, provided they do not interfere with the current use and enjoyment of the Real Estate."

Accordingly, the Wolfe defendants agreed to convey good and merchantable title subject to

"restrictions of record."

¶ 26 Plaintiffs also must be deemed to have constructive notice of the landmark designation.

Constructive notice is knowledge that the law imputes to a purchaser, whether or not he had

actual knowledge at the time of conveyance. US Bank National Ass'n v. Villasenor, 2012 IL App

(1st) 120061, ¶ 59. There are two kinds of constructive notice: record notice and inquiry notice.

Id. According to the theory of record notice, where an instrument of conveyance or a mortgage

2 Plaintiffs claim that the designation of the property as a landmark represents an encumbrance on the title while the Wolfe defendants dispute that claim. However, based on the record, we need not decide this dispute.

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is recorded in the appropriate public office, the public record provides constructive notice to the

whole world. In re Ehrlich, 59 B.R. 646, 650 (Bankr. N.D. Ill. 1986). In Illinois, "[a] purchaser

of land is charged with constructive notice not only of whatever is shown in the records of the

office of the recorder of deeds, but in addition, with matters affecting the title of the land which

appear in the records in the circuit, probate, and county courts in the county where the land is

situated." Eckland v. Jankowski, 407 Ill. 263, 267 (1950). It is the duty of a purchaser of land to

examine the record and he is chargeable with notice of whatever is shown by the record. Id.

Plaintiffs, as purchasers, had a duty to investigate the public record at the Recorder of Deeds.

Despite failing to investigate the public record, plaintiffs are charged with the knowledge that the

property was landmarked because the designation had been recorded with the property in

January 1982.

¶ 27 The landmark designation was recorded in January 1982 and the law imposes that

knowledge on plaintiffs even if the plaintiffs did not review the public record until after the

purchase. Id. Plaintiffs also agreed to take title subject to restrictions of record. Accordingly,

plaintiffs' first claim against the Wolfe defendants fails.

¶ 28 Plaintiffs' second claim also fails. By the terms of the Landmark Ordinance, the Wolfe

defendants were not required to post landmark identification on the property. Plaintiffs attached,

as Exhibit F to their complaint, the landmark designation that had been recorded in January

1982. Section 4 of Exhibit F states, "[t]he Commission on Chicago Historical and Architectural

Landmarks is hereby directed to create a suitable plaque appropriately identifying said landmark

and to affix said plaque to the property designated as a Chicago Landmark in accordance with

provisions of Section 21-64(f) of the Municipal Code of Chicago." The plain terms of the

landmark designation placed the obligation to affix a plaque to the property on the Commission

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on Chicago Historical and Architectural Landmarks, not the Wolfe defendants. Accordingly,

plaintiffs' second claim did not state a cause of action upon which relief could be granted.

¶ 29 Because plaintiffs could not recover from the Wolfe defendants regarding the failure to

disclose the landmark designation and it was not the Wolfe defendants' obligation to affix a

plaque, the circuit court was correct in dismissing the action against the Wolfe defendants with

prejudice.

¶ 30 Next, plaintiffs contend that the circuit court erred in denying their oral motion for leave

to amend at the time the circuit court granted the Wolfe defendants' motion to dismiss. In their

brief before this court, plaintiffs state generally their belief they could have cured the defects in

the pleading, which would not have surprised the Wolfe defendants, and the oral motion was

timely requested. However, Plaintiffs have failed to provide us with a transcript from the

hearing, so the basis for the circuit court's denial and a full account of plaintiffs' oral motion are

not before us. It is the plaintiffs' obligation to provide this court with a record sufficiently

complete to permit review of the error complained of and doubts arising from presentation of the

record are to be resolved against the appellants. Coleman v. Windy City Ballon Port, Ltd., 160

Ill. App. 3d 408, 419 (1987). When portions of the record are lacking, it will be presumed that

the circuit court acted properly in entry of the challenged order and that the order is supported by

the part of the record not before the reviewing court. Because plaintiffs have failed to provide us

with a transcript of the hearing where the court denied the oral motion for leave to amend, we

must presume that it was correctly entered. The circuit court's denial of plaintiffs' oral motion to

amend is therefore affirmed.

¶ 31 Finally, plaintiffs claim that the circuit court erred in denying their Motion to Reconsider

and Motion to Amend Pleading filed in June 2014 as it relates to the Wolfe defendants.

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¶ 32 Plaintiffs filed their motion for leave to amend after the circuit court had already

dismissed the Wolfe defendants with prejudice. As previously stated, plaintiff had no statutory

right to amend after the court entered a final judgment in favor of the Wolfe defendants, and the

circuit court did not abuse its discretion in denying plaintiffs' untimely motion for leave to

amend. Compton, 382 Ill. App. 3d at 332.

¶ 33 Plaintiffs also claim that the circuit court erred when it denied their motion to reconsider

as it relates to the dismissal of their complaint against the Wolfe defendants. A motion to

reconsider enables a party to bring to a court's attention newly discovered evidence, changes in

the law, or errors in the court's application of existing law. Martinez v. River Park Place, LLC,

2012 IL App (1st) 111478, ¶ 23. The decision to grant a motion to reconsider lies within the

sound discretion of the trial court and will not be disturbed on appeal absent an abuse of

discretion. Midway Park Saver v. Sarco Putty Co., 2012 IL App (1st) 110849, ¶ 17. A trial

court abuses its discretion when its ruling is arbitrary, fanciful, or unreasonable or when no

reasonable person would adopt its view. Blum v. Koster, 235 Ill. 2d 21, 36 (2009).

¶ 34 The circuit court correctly denied plaintiffs' motion to reconsider the dismissal of their

complaint against the Wolfe defendants. A review of the motion demonstrates that the plaintiffs

did not bring newly discovered evidence or changes in the law to the court's attention. The only

claimed error related to the failure to place the landmark plaque on the property. However, the

circuit court had already considered this argument in the briefing on the Motion to Dismiss and

correctly rejected it. Additionally, as has been stated above, plaintiffs are deemed to have

constructive notice of the landmark designation and it was not the Wolfe defendants' obligation

to affix the plaque. Based on this, the circuit court did not abuse its discretion in denying

plaintiffs' Motion to Reconsider the dismissal of the Wolfe defendants.

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¶ 35 CONCLUSION

¶ 36 For the foregoing reasons, the circuit court's various rulings challenged here are affirmed.

¶ 37 Affirmed.

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