Poundstone v. Cook

2025 IL App (3d) 240322, 258 N.E.3d 158
CourtAppellate Court of Illinois
DecidedMarch 12, 2025
Docket3-24-0322
StatusPublished
Cited by2 cases

This text of 2025 IL App (3d) 240322 (Poundstone v. Cook) 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
Poundstone v. Cook, 2025 IL App (3d) 240322, 258 N.E.3d 158 (Ill. Ct. App. 2025).

Opinion

2025 IL App (3d) 240322

Opinion filed March 12, 2025 ____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

MICHAEL POUNDSTONE, ) Appeal from the Circuit Court ) of the 13th Judicial Circuit, Plaintiff-Appellee, ) La Salle County, Illinois. ) v. ) Appeal No. 3-24-0322 ) Circuit No. 17-L-35 KEVIN COOK, ) ) The Honorable Defendant-Appellant. ) Jason Helland, ) Judge, presiding. ____________________________________________________________________________

JUSTICE ANDERSON delivered the judgment of the court, with opinion. Presiding Justice Brennan and Justice Holdridge concurred in the judgment and opinion. ____________________________________________________________________________

OPINION

¶1 The plaintiff, Michael Poundstone, purchased a house from the defendant, Kevin Cook, in

2016. After discovering undisclosed water damage and rot, Poundstone filed a complaint against

Cook, alleging a violation of the Residential Real Property Disclosure Act (Act) (765 ILCS 77/1

et seq. (West 2016)) and common-law fraud. Following a bench trial, the circuit court awarded

Poundstone damages of $104,000, plus postjudgment interest and attorney fees. Cook appeals, and

we affirm.

¶2 I. BACKGROUND ¶3 In February 2016, the parties entered into a written contract for Poundstone’s purchase of

a house located in Ottawa, Illinois, from Cook for $425,000. Cook provided Poundstone with a

disclosure report on the condition of the house, as mandated by the Act (765 ILCS 77/20 (West

2016)). In the disclosure, Cook stated, in relevant part, that he had lived in the house for the prior

12 months and was unaware of any “flooding or recurring leakage problems in the crawl space or

basement”; “material defects in the basement or foundation”; “leaks or material defects in the roof,

ceilings or chimney”; and “material defects in the walls, windows, doors or floors.” No home

inspection was performed prior to Poundstone taking possession of the property after the sale

closed in March 2016.

¶4 In March 2017, Poundstone filed a two-count complaint against Cook in La Salle County,

alleging a violation of the Act and common-law fraud. The complaint was amended twice, with

the second amended complaint including a common-law fraud count seeking “exemplary damages

for willful and wanton conduct.” The second amended complaint alleged that water had entered

into the basement bedrooms and interior of the house after a heavy rain in April 2016, prompting

Poundstone to investigate the source of the leaks. His investigation revealed watermarks on

drywall and framing in the basement, “[e]xtensive mold in the wall framing behind the basement

drywall,” watermarks on deck boards under a kitchen window, deck boards that were rotted due

to water and structurally unsound, water entering from behind the metal flashing for the stone

veneer into the basement and window flashing, rotted studs and plywood by the kitchen window

from water damage, and additional framing damaged by water.

¶5 Poundstone hired a contractor, who concluded that some of the boards, joists, and ledger

boards on the deck had previously been replaced in the vicinity of the more recent damage. In

addition, multiple attempts to repair prior water damage were evident, and portions of drywall in

2 the basement had previously been removed, apparently to look for damage. Poundstone alleged

that, based on the scope and extent of the damage, the water leaks around the deck, basement, and

kitchen window had been an ongoing problem and Cook “had actual knowledge of the extent of

the leaking.”

¶6 The bench trial began in October 2019, with testimony from contractors and a structural

engineer who had examined the house. The parties also testified, with Cook stating that he had

been the general contractor when the house was built in 2005 and, in fact, did much of the work

himself. He also personally repaired rotted wood underneath the deck in 2011 or 2012 and replaced

a section of drywall in the basement after it was damaged when he fell from a treadmill. He

maintained, however, that he saw no water damage inside the wall at that time and that he was

unaware of any water leakage at the time he sold the house in 2016.

¶7 Cook also offered a document he claimed was present at the closing that stated the property

was being sold “as-is.” Poundstone denied signing the document, and an attorney from the law

firm that conducted the closing and the loan officer both testified that the document was not in

their files. After the close of Poundstone’s case-in-chief, Cook filed a motion for a directed finding,

which the trial court denied.

¶8 The trial proceeded, and in its April 30, 2020, order, the trial court reviewed the parties’

extensive testimony and photographic evidence before finding that,

“having been placed on notice that water was the source of the damaged condition in which

he found the wood, [Cook] apparently did not do anything to determine the source of the

water. Merely, replacing or shoring up rotted wood does nothing to address or correct the

water source. *** Doing nothing to address the source allowed the water issue to continue

unabated.”

3 The court also found that, in patching the drywall damage allegedly caused by the treadmill

accident, Cook

“would have necessarily have observed the interior of that wall. While the repair was done

in 2011 or 2012 and this closing was in 2616, the extent of the water damage and

deterioration of the wood and the evident growth of mold should have placed the defendant

on notice that there was a water issue on the inside of that wall.”

Despite that knowledge, “[h]e did not make any effort to establish the source of the evident water

intrusion in to the wall. The Court does not have to accept the defendant’s denial of knowledge

when the evidence shows to the contrary.”

¶9 The trial court concluded that “[i]t is unreasonable for defendant to believe the repairs he

performed resolved the water issue. He took no steps to ascertain the source and of course, no steps

to eliminate the problem. The repairs were merely cosmetic. Therefore, as a matter of fact, it was

not reasonable to believe his repairs solved the water issue.”

¶ 10 The court also rejected Cook’s arguments that Poundstone “was basically guilty of

contributory negligence” because he did not have a home inspection or notice obvious defects

before closing on the property. First, the court noted that, “in a fraud action, a defendant may not

interpose a defense that the plaintiff was negligent in failing to discover the truth,” citing Chapman

v. Hosek, 131 Ill. App. 3d 180, 187-88 (1985). It then explained that the defects could not

reasonably have been observed during an ordinary walk-through of the structure because they were

either behind the walls or were “12 feet above ground level.”

¶ 11 The trial court found that the seller in a real estate sale has

“a duty to disclose defects which could not be discovered on a reasonable and diligent

inspection. CNA Insurance Company v Dipaulo, 342 Ill. App. 3d 440 (2003). A seller of a

4 used home has a duty to disclose facts which one, materially affect the value or desirability

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2025 IL App (3d) 240322, 258 N.E.3d 158, Counsel Stack Legal Research, https://law.counselstack.com/opinion/poundstone-v-cook-illappct-2025.