Kjarsgaard v. Reilly

2022 IL App (1st) 211459-U
Appellate Court of Illinois·Decided December 15, 2022·No. 1-21-1459·Unpublished·Cited by 2 cases

Opinion

2022 IL App (1st) 211459-U No. 1-21-1459

Order filed December 15, 2022 Fourth Division

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

IN THE

APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

JOAL KJARSGAARD and KATHRYN KJARSGAARD, ) Appeal from the ) Circuit Court of

Plaintiffs-Appellants, ) Cook County.

)

v. )

)

KEVIN REILLY, AMY REILLY, J.P. BITTING, and ) 18 L 11552 AT WORLD PROPERTIES, LLC, )

)

Defendants, )

) Honorable

(J.P. Bitting and At World Properties, LLC, ) Margaret A. Brennan, Defendants-Appellees). ) Judge Presiding.

JUSTICE MARTIN delivered the judgment of the court.

Presiding Justice Lampkin and Justice Hoffman concurred in the judgment.

ORDER

¶1 Held: We affirm the trial court’s dismissal of plaintiffs’ License Act claim and the denial of their motion for leave to amend. We reverse the trial court’s dismissal of plaintiffs’

claims for consumer fraud, common law fraud, and negligent misrepresentation. Finally, we find that plaintiffs’ challenges to the dismissal of their motion for reconsideration are rendered moot by our decision.

¶2 In June 2015, plaintiffs Joal and Kathryn Kjarsgaard purchased real property located in

suburban Oak Park, Illinois. The property consisted of a residential parcel improved with a single-family dwelling. Subsequent to closing, the plaintiffs filed suit against the sellers Kevin and Amy Reilly (the Reillys), the realtor J.P. Bitting (Bitting), and his employer, At World Properties, LLC (World Properties).

¶3 In this appeal, plaintiffs challenge the trial court’s rulings granting Bitting’s and World Properties’ 2-619.1 motion to dismiss (735 ILCS 5/2-619.1 (West 2018)). Specifically, plaintiffs argue that the trial court erred when it determined that plaintiffs’ statutory claims were barred by applicable statutes of limitations and denied plaintiffs’ request to replead. Plaintiffs further challenge the court’s findings that plaintiffs could not sustain their allegations of fraud and negligent misrepresentation. For the following reasons, we affirm in part and reverse in part. 1

¶4 I. BACKGROUND

¶5 On June 1, 2015, plaintiffs consummated the purchase of a single-family home located at 900 N. East Avenue in Oak Park. The Reillys hired Bitting to act as their real estate agent in the marketing and sale of the property. Bitting was in turn employed by World Properties.

¶6 A year after the sale, plaintiffs filed suit in the municipal division of the circuit court alleging that the Reillys sold the home without disclosing that there were “leakage problems in the basement” and “material defects in the basement foundation or walls.” The Reillys were the sole defendants in this action. Plaintiffs alleged that the Reillys were aware of the home’s structural defects and resulting water damage, but intentionally failed to disclose the defects and damage in the Residential Real Property Disclosure Report they completed and executed prior to closing. Plaintiffs sought monetary damages and other relief stemming from the water damage.

¶7 The lawsuit proceeded to mandatory arbitration and an award was entered in favor of the

1 In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this appeal has been resolved without oral argument upon entry of a separate written order.

Reillys on March 23, 2018. Plaintiffs rejected the arbitration award and voluntarily dismissed their action on August 6, 2018.

¶8 On October 24, 2018, plaintiffs filed the complaint underlying this appeal in the law division of the circuit court. Plaintiffs sought damages similar to those requested in the municipal action, but this time, they added Bitting and World Properties as defendants. 2 Plaintiffs alleged that Bitting was as equally aware of the home’s structural defects as were the Reillys, but that Bitting nevertheless intentionally misrepresented the cause and source of the leakage.

¶9 According to plaintiffs, during an inspection of the home, they observed water marks around a basement bedroom door frame and inquired of Bitting as to its cause. Bitting allegedly responded that the property “had experienced a one-time water entry during which water entered through a window after the gutter on the West side of the Property had collected leaves, causing overflow into a window well in the middle of the west foundation wall.” Bitting purportedly added that “the Reillys had maintained the gutters carefully thereafter, and had no other issues of water entry/seepage in the basement.”

¶ 10 Plaintiffs claimed that on their final inspection of the property prior to closing, they inquired about water they observed “seeping from a hole in the east basement foundation wall, which ran down the wall, under the washer/dryer units, and across the floor to a drain.” According to plaintiffs, Bitting responded that Kevin Reilly told him that the water must have come from a disconnected washing machine.

¶ 11 Plaintiffs alleged that Bitting was acting within the scope of his employment when he made these misrepresentations and that World Properties benefited from his conduct by virtue of the fees it received from the sale of the home.

2 Bitting and World Properties are the only defendants participating in this appeal.

¶ 12 Plaintiffs asserted five counts against Bitting and World Properties (collectively, defendants): count III - violation of the Illinois Real Estate License Act of 2000 (License Act) (225 ILCS 454/1 et seq. (West 2014)); count IV - common-law fraud; count V - negligent misrepresentation; count VI - violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2018)); and count VII - civil conspiracy.

¶ 13 Defendants filed a combined motion to dismiss the five counts pursuant to section 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2018)), citing sections 2-615 and 2-619(a)(5) of the Code (735 ILCS 5/2-615, 619(a)(5) (West 2018)). Specifically, defendants contended that the counts should be dismissed pursuant to section 2-619(a)(5) on the grounds that the claims were time-barred by applicable statutes of limitations.

¶ 14 Defendants asserted that plaintiffs were aware of the water damage prior to the June 1, 2015 closing but failed to file their claims until October 24, 2018. This was well after the expiration of the two-year statute of limitations applicable to claims arising under the License Act (225 ILCS 454/15-70(b) (West 2014)), and the three-year statute of limitations applicable to consumer fraud claims (815 ILCS 505/10a(e) (West 2016)). 3

¶ 15 Defendants also moved to dismiss the counts pursuant to section 2-615. Defendants argued that plaintiffs failed to allege sufficient facts showing that Bitting owed a duty under the License

3 Section 15-70(b) of the License Act provides in relevant part:

“(b) Any action under this Article 15 shall be forever barred unless commenced within 2 years after the person bringing the action knew or should reasonably have known of such act or omission.”

225 ILCS 454/15-70(b) (West 2014).

Section 10a(e) of the Consumer Fraud Act provides in relevant part:

“(e) Any action for damages under this Section shall be forever barred unless commenced within 3 years after the cause of action accrued;” 815 ILCS 505/10a(e) (West 2018).

Act to disclose the existence of non-latent (patent) defects in the house, which would support claims for common-law or consumer fraud, negligent misrepresentation, or civil conspiracy.

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Kjarsgaard v. Reilly, 2022 IL App (1st) 211459-U (Ill. Ct. App. 2022).

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