Napcor Corporation v. JP Morgan Chase Bank

CourtAppellate Court of Illinois
DecidedNovember 19, 2010
Docket2-09-0179 Rel
StatusPublished

This text of Napcor Corporation v. JP Morgan Chase Bank (Napcor Corporation v. JP Morgan Chase Bank) 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
Napcor Corporation v. JP Morgan Chase Bank, (Ill. Ct. App. 2010).

Opinion

No. 2-09-0179 Filed: 11-19-10 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

NAPCOR CORPORATION, ) Appeal from the Circuit Court ) of Kane County. Plaintiff-Appellee, ) ) v. ) No. 99--MR--407 ) JP MORGAN CHASE BANK, NA ) Successor as a Result of a Merger With ) Bank One NA, Formerly Known as ) First Chicago, ) Honorable ) Judith M. Brawka, Defendant-Appellant. ) Judge, Presiding. ______________________________________________________________________________

JUSTICE HUTCHINSON delivered the opinion of the court:

Defendant, JP Morgan Chase Bank, NA, appeals from a $1,201,158.05 judgment entered on

a jury verdict in favor of plaintiff, Napcor Corporation, to which defendant was found liable for

fraudulent misrepresentation in the sale of an industrial building to plaintiff. Defendant raises two

issues on appeal: (1) whether a judgment notwithstanding the verdict should be entered in its favor;

and (2) whether defendant is entitled to a new trial because the verdict was against the manifest

weight of the evidence. In support of the second contention, defendant argues that the trial court

erred by excluding evidence that plaintiff had agreed to accept the building in its "as is" condition; the

trial court erred by refusing to give defendant's jury instruction stating that plaintiff had the burden

of proving each element of its claim by clear and convincing evidence; and the amount of the

judgment was against the manifest weight of the evidence. We affirm. No. 2--09--0179

I. BACKGROUND

In 1992, defendant was the trustee of a 72,047-square-foot commercial building (the building)

located at 1600 Mountain Street in Aurora. Howard Preis worked in defendant's trust department

and was responsible for managing defendant's portfolio of real estate assets held in trust. Preis was

also responsible for the upkeep and maintenance of defendant's trust properties, and in 1992, he took

over the management of the building. At that time, the building was being leased to Bender Glick,

a manufacturing company. The building, however, was not generating any net income and was listed

for sale after the roof was fixed. Plaintiff is a holding company that currently maintains title and

ownership of the building.

To prepare the building for sale, the building's broker, Paine/Wetzel, provided Preis with an

inspection report, which noted that the "roof construction is absorbing water and showing up as

leakage" and concluded that the existing roof must be torn off and replaced rather than recovered

with a new roof structure. Preis received bids from various roofing contractors who suggested

different methods of repairing the roof. After reviewing and evaluating the bids, Preis sent to the

members of the trust a letter recommending that the current roof be replaced with "roofing over the

existing roof with a modified bitumen application." Preis then accepted the bid of Prewitt

Construction, which completed the roof work with the assistance of Glen Prentice. During his

deposition, Prentice testified that he told Preis that the existing roof should be torn off, but Preis told

him that removing the damaged roof was not within the budget and instructed him to install a new

roof over the existing roof. Prentice further testified that he advised Preis that installing a new roof

over the existing roof, as opposed to tearing off the old roof, would leave the roof susceptible to wind

-2- No. 2--09--0179

uplift. Prentice testified that, once the roof work was completed in August 1994, it was impossible

to tell what was under the new roof, i.e., whether the previous roof was torn off or covered.

Shortly after the roof work was completed, Paine/Wetzel sent a letter to Preis advising him

that the roof continued to leak. Paine/Wetzel sent an additional letter in September 1995 advising

of a "major roof leak" that was detected when the building was shown to a prospective client.

Defendant then switched its real estate firm and hired Frain, Camins, & Swartchild (FCS) to market

the building for sale. Preis met with FCS agent Kirk Armour to discuss the building and its features.

Armour asked Preis if he thought the roof was a tear-off, and Preis responded that he thought it was.

Preis approved the listing sheet prepared by Armour that included the comment "New roof in 1994

(tear off)." At trial, Preis testified that the phrase "tear off" had no particular meaning to him and that

he did not believe that it was a misrepresentation.

In late 1995, plaintiff was looking for an industrial space to be utilized by a related entity

named Oasis Industries, Inc. Oasis Industries manufactured whirlpool baths and had outgrown the

space it had previously occupied. Plaintiff's president, William Jahnke, was advised by a real estate

agent that the building was on the market. In May 1996, plaintiff submitted an offer for the building,

and defendant tendered a counteroffer of $1.309 million and provided a contract. Paragraph 10(e)

of that contract provided in relevant part:

"[Plaintiff] hereby represents, that they [sic] have fully examined the real estate described

herein and the building improvements thereon and that [plaintiff] knows and is satisfied with

the physical condition thereof in all respects and [plaintiff] declares that [plaintiff] is accepting

the real estate in its 'AS IS' Condition. [Plaintiff] agrees and admits that no representations

or statements have at any time been made by [defendant] or its agents as to the physical

-3- No. 2--09--0179

condition or state of repair or the environmental condition of said real estate in any respect,

which have not been expressed in this contract." (Emphasis added.)

The emphasized provision of this paragraph was not allowed into evidence because the trial court

granted a motion in limine by plaintiff. The contract also provided a 30-day due diligence period.

Jahnke inspected and photographed the roof and found no evidence that the roof leaked. He did not,

however, retain an additional roofing inspector, claiming that he relied on defendant's representation

that the previous roof had been torn off. During the due diligence period, Preis also presented Jahnke

with the manufacturer's warranty for the roof, which Jahnke presumed was valid.

The sale of the building from defendant to plaintiff was completed in August 1996. After

moving into the building, plaintiff began to experience minor roof leaks, and in March 1998, an entire

section of the roof blew off during a storm. In June 1998, another section of the roof similarly blew

off. A third "blow off" occurred in April 1999, but it was smaller than the first two. The blown-off

areas were initially covered by blue tarps, and permanent repairs were not done until a month or two

after the second section blew off. According to Jahnke, in the 10 years since the repairs, the roof

continued to leak when seams opened up, and at the time of trial, approximately 20% of the roof had

exhibited leaks or deterioration. At trial, plaintiff presented evidence that it had spent $25,158.05 in

repairs to the roof since the first damage occurred. Jahnke retained three roofing consultants to

Free access — add to your briefcase to read the full text and ask questions with AI

Related

MacKintosh v. Jack Matthews and Co.
855 P.2d 549 (Nevada Supreme Court, 1993)
Stemple v. Dobson
400 S.E.2d 561 (West Virginia Supreme Court, 1990)
Richey v. Patrick
904 P.2d 798 (Wyoming Supreme Court, 1995)
Thompson v. IFA, INC.
536 N.E.2d 969 (Appellate Court of Illinois, 1989)
Cress v. Recreation Services, Inc.
795 N.E.2d 817 (Appellate Court of Illinois, 2003)
Dietrich v. Jones
526 N.E.2d 450 (Appellate Court of Illinois, 1988)
Wernikoff v. Health Care Service Corp.
877 N.E.2d 11 (Appellate Court of Illinois, 2007)
Posner v. Davis
395 N.E.2d 133 (Appellate Court of Illinois, 1979)
Palmer v. Mount Vernon Township High School District 201
647 N.E.2d 1043 (Appellate Court of Illinois, 1995)
Schultz v. NORTHEAST ILL. REGIONAL COMMUTER RAILROAD CORP.
775 N.E.2d 964 (Illinois Supreme Court, 2002)
Gehrett v. Chrysler Corp.
882 N.E.2d 1102 (Appellate Court of Illinois, 2008)
Bauer v. Giannis
834 N.E.2d 952 (Appellate Court of Illinois, 2005)
LaSalle Bank, N.A. v. C/HCA Development Corp.
893 N.E.2d 949 (Appellate Court of Illinois, 2008)
Favia v. Ford Motor Co.
886 N.E.2d 1182 (Appellate Court of Illinois, 2008)
Parsons v. Winter
491 N.E.2d 1236 (Appellate Court of Illinois, 1986)
Nolan v. Weil-McLain
910 N.E.2d 549 (Illinois Supreme Court, 2009)
Hart v. Boehmer Chevrolet Sales, Inc.
787 N.E.2d 350 (Appellate Court of Illinois, 2003)
Snelson v. Kamm
787 N.E.2d 796 (Illinois Supreme Court, 2003)
Wilson v. Century 21 Great Western Realty
15 Cal. App. 4th 298 (California Court of Appeal, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
Napcor Corporation v. JP Morgan Chase Bank, Counsel Stack Legal Research, https://law.counselstack.com/opinion/napcor-corporation-v-jp-morgan-chase-bank-illappct-2010.