Ridenour v. Carl Sandburg Village No. 7 Condominium Association

• Court: Appellate Court of Illinois
• Decided: May 19, 2010
• Docket: 1-09-1793 Rel
• Status: Published

Opinion

THIRD DIVISION May 19, 2010

No. 1-09-1793

SUZANNE RIDENOUR and DAN McNAMARA, ) Appeal from the ) Circuit Court of Plaintiffs-Appellees and Cross-Appellants, ) Cook County. ) v. ) ) CARL SANDBURG VILLAGE No. 7 ) No. 08 CH 21639 CONDOMINIUM ASSOCIATION, ) ) Defendant-Appellant and Cross-Appellee ) ) (Juliet DiIorio and Mary Guth, ) Honorable ) William O. Maki, Plaintiffs). ) Judge Presiding.

JUSTICE STEELE delivered the opinion of the court:

This appeal arises from the trial court’s grant of partial summary judgment on April 9,

2009, in favor of plaintiffs, Juliet DiIorio, Suzanne Ridenour, Dan McNamara and Mary Guth,

and against defendant, Carl Sandburg Village No. 7 Condominium Association (Association),

finding that improvements to limited common elements shall be assessed only to the unit owners

who benefit from such improvements. Subsequently, on June 19, 2009, the trial court entered a

second order, denying the Association’s motion to reconsider and additionally finding that the

Association may access the capital reserves for repair or replacement of the limited common

elements in relation to those unit owners’ ownership in the Association. Plaintiffs Ridenour and

McNamara1 filed a cross-appeal, seeking review of the trial court’s order allowing the Association

1 Plaintiff DiIorio moved from the building and plaintiff Guth passed away prior to the end

of the lawsuit, so they were withdrawn as plaintiffs from the case. 1-09-1793

to use a portion of the reserves and assessments for the repair of limited common elements. For

the reasons that follow, we affirm.

BACKGROUND

The Association was established pursuant to the Illinois Condominium Property Act (Act)

(765 ILCS 605/1 et seq. (West 2008)) and an amended and restated “Declaration of

Condominium Ownership and of Easements, Restrictions, Covenants and By-Laws”

(Declaration). The Association is comprised of a 6-story building with 96 units, known as the

“Kilmer House,” and a 43-story building with 520 units, known as the “James House.” There is a

common garage connecting the two buildings, and they also share common heating, ventilation

and air conditioning systems.

Sometime in 2000, the Association approved the replacement of the windows for the

Kilmer House. The project was paid for from the Association’s capital reserves account without

protest at a cost of $752,000. Additionally, the Association indicated that major repair work on

the Kilmer House, including concrete and balconies, was performed in other years, most recently

in 2004, and said repairs were funded solely by the capital reserves fund. In 2008, the Association

determined that the windows for the James House needed to be replaced and proposed that the

window replacement project be completed in 2009 or 2010, as it had previously done with

previous repairs. The estimated cost of the James House window replacement project is $14

million.

Subsequently, four unit owners from the Kilmer House filed a verified complaint in which

they sought a declaration that (1) the “James House windows are limited common elements,” and

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(2) “the Association lacks authority to assess the cost of the James House window replacement

project as a common expense.” The Association filed a motion to dismiss on the grounds that

there was no actual and justiciable controversy between the parties because the Association’s

board had not yet taken a final vote to execute the project, had not voted for or levied a special

assessment on the Association’s members to pay for the project, and had not signed a contract for

the project. The trial court denied the Association’s motion, and the Association then filed its

answer and affirmative defenses. On February 20, 2009, plaintiffs filed a motion for summary

judgment seeking a declaration that they, along with nonparty Kilmer House unit owners, cannot

be assessed the cost of limited common elements that do not benefit them. The trial court granted

plaintiffs’ summary judgment motion, finding that the James House windows are limited common

elements and that any assessment for their improvement should be assessed solely to the James

House unit owners who benefit from the improvements.

On April 28, 2009, the Association filed a motion for clarification of the trial court’s

summary judgment order or, alternatively, for a finding pursuant to Illinois Supreme Court Rule

304(a). 210 Ill. 2d R. 304(a). On May 5, 2009, the trial court ruled that its order of April 9,

2009, was an interlocutory order granting partial summary judgment and required plaintiffs to file

a supplemental summary judgment motion. Plaintiffs subsequently filed a supplemental summary

judgment motion and sought a declaration that “the Association could not use any common

expenses, operating funds, reserve accounts or anticipated future assessments from any Kilmer

House unit owner to pay in any way, including by serving as collateral to secure financing, for the

costs of repairing or replacing the James House windows.” The Association filed a motion to

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reconsider the trial court’s order of April 9, 2009, and sought entry of judgment in its favor.

On June 19, 2009, the trial court entered a final order which denied the Association’s

motion to reconsider, required plaintiffs to amend their complaint to strike DiIorio and Guth as

plaintiffs, and found:

“The Board, subject to the Declaration, may access up to

83.3% (subject to verification of the James House unit owners’

total percentage interest in the Association, as reflected in Exhibit B

of the Declaration), of the capital reserves to use for repair or

replacement of the James House windows, including to secure

financing, and may use such percentage of monthly assessments

pursuant to Section 6.01(a) of the Declaration as security for any

financing for any such repair or replacement of such Limited

Common Elements.”

The Association filed its timely notice of appeal on July 9, 2009, and an amended notice of

appeal on July 16, 2009. Plaintiffs filed a notice of cross-appeal on July 17, 2009.

DISCUSSION

On appeal, the Association raises the following issues: (1) whether the plain language of

the Declaration requires reversal of the trial court’s order; (2) whether the trial court’s order

violates other principles of contractual and statutory construction; (3) whether any ambiguities in

the Declaration and any conflicting inferences to be drawn from the evidence require reversal of

the summary judgment; and (4) whether any authority cited below supports the grant of summary

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judgment.

On cross-appeal, plaintiffs Ridenour and McNamara contend that the reserves are subject

to the requirements in the Declaration that costs for limited common elements can only be

assessed to the unit owners benefitted by the limited common elements.

Summary judgment should only be granted if “the pleadings, depositions, and admissions

on file, together with affidavits, if any, present no genuine issue of material fact and the moving

party is entitled to judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West 2006). While use

of summary judgment is encouraged under Illinois law to aid in the expeditious disposition of a

lawsuit (Purtill v. Hess, 111 Ill. 2d 229, 240 (1986)), it is a drastic means of disposing of litigation

and should be allowed only when the right of the moving party is clear and free from doubt

(McCullough v. Gallaher & Speck, 254 Ill. App. 3d 941, 948 (1993); Quality Lighting, Inc. v.

Benjamin, 227 Ill. App. 3d 880, 883-84 (1992)). Summary judgment is appropriate if a party

cannot establish an element of his or her claim. Willett v. Cessna Aircraft Co., 366 Ill. App. 3d

360, 368 (2006).

In appeals from summary judgment rulings, we conduct a de novo review. Atlantic

Mutual Insurance Co. v. American Academy of Orthopaedic Surgeons, 315 Ill. App. 3d 552, 559

(2000). The reviewing court must construe all evidence strictly against the movant and liberally in

favor of the nonmoving party. Willett, 366 Ill. App. 3d at 368; Atlantic Mutual, 315 Ill. App. 3d

at 559. On appeal from the entry of summary judgment, the reviewing court is not to judge the

strength of the evidence or weigh the credentials, credibility, and testimony of one deponent

against another. McCullough, 254 Ill. App. 3d at 948. If reasonable persons could draw

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different inferences from undisputed facts, summary judgment should be denied. Atlantic Mutual,

315 Ill. App. 3d at 559.

When a controversy regarding the rights of a condominium unit owner in a condominium

arises, the court must examine any relevant provisions of the Act (765 ILCS 605/1 et seq. (West

2008)), and the Declaration or bylaws, and construe them as a whole. LaSalle National Trust,

NA v. Board of Directors of the State Parkway Condominium Ass’n, 327 Ill. App. 3d 93, 96

(2001). The Act provides that “ ‘[l]imited [c]ommon [e]lements’ means a portion of the common

elements so designated in the declaration as being reserved for the use of a certain unit or units to

the exclusion of other units, including but not limited to balconies, terraces, patios and parking

spaces or facilities.” 765 ILCS 605/2(s) (West 2008). The Act further provides that the

condominium instruments may provide “for the assessment, in connection with expenditures for

the limited common elements, of only those units to which the limited common elements are

assigned.” 765 ILCS 605/9(e) (West 2008). The purpose of permitting the designation of limited

common elements is to prevent the owners of certain units from being forced to pay a

proportionate share of maintenance expenses for amenities from which they derive no benefit.

Hofmeyer v. Willow Shores Condominium Ass’n, 309 Ill. App. 3d 380, 384 (1999).

Paragraph 1.07 of the Declaration defines limited common elements as “a portion of the

common elements so designated in the Declaration or on the Plat as being reserved for the use of

a certain Unit or Units to the exclusion of other Units. Any portion of the Common Elements

which by the terms of this Declaration is clearly intended to serve exclusively a certain Unit or

Units (but less than all of the Units) or the owner or owners thereof shall be deemed a Limited

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Common Element.” Paragraph 3.02 of the Declaration further describes limited common

elements as

“includ[ing], but not be limited to, the following: (a) any

shutters, awnings, window boxes, doorsteps, porches, balconies,

patios perimeter doors, windows in perimeter walls and any other

apparatus designed to serve a single Unit including those rear yard

areas enclosed completely by a brick wall, which is immediately

adjacent and leads to a Unit; (b) the interior surface of the

perimeter walls, ceilings and floors which define the boundary

planes of a Unit; and (c) any system or component part thereof

which serves a Unit exclusively to the extent that such system or

component part is located outside the boundaries of a Unit.”

Regarding additions, alterations or improvements to limited common elements, paragraph

4.10(a) of the Declaration indicates:

“The Board may authorize and charge as a Common

Expense (or in the case of Limited Common Elements may charge

the Unit Owners benefit[t]ed thereby) additions, alterations, or

improvements to the Common Elements. The cost of any such

work to the [C]ommon Elements may be paid out of a special

assessment. While the Homeowners’ Association shall have the

primary responsibility to maintain the Community Common

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Elements, in the event of their failure to do so, the Association shall

have the right to perform such maintenance and be entitled to

reimbursement from the Homeowners’ Association.”

Finally, with respect to maintenance, repairs and replacement to limited common elements,

paragraph 4.06(b)(iii) of the Declaration provides:

“All of the maintenance, repair and replacements of the

Limited Common Elements benefit[t]ing his Unit, in whole or in

part, except to the extent as otherwise directed by the Board or as

in otherwise provided herein shall be performed by the respective

Unit Owner benefit[ed] thereby. In addition, each Unit Owner shall

be individually responsible for the repair, maintenance and

replacement of all door and window locks and hardware with

respect to which each Unit Owner is entitled to the exclusive use.

At the discretion of the Board, the Board may perform, or cause to

be performed, such maintenance, repairs and replacements of the

Limited Common Elements and the cost thereof shall be assessed in

whole or in part to Unit Owners benefit[t]ed thereby * * * .”

Turning to the case at bar, our reading of the Act and the Declaration shows no conflict

between the two. The Act provides, and the Declaration indicates, that all costs for the

maintenance, repair and replacement of limited common elements may be assessed to the unit

owners benefitted thereby. However, per the Association, it has been the practice of the

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Association to assess all unit owners equally for all repairs, maintenance and improvements to

limited common areas without regard to the unit owners directly benefitted by any improvements.

The Association has employed the same practice in using reserves for limited common areas.

These practices are incorrect applications of the Act and the Declaration, as costs pertaining to

the repair, maintenance and improvement of limited common areas should be assessed only to

those unit owners directly benefitting from any such improvement. Accordingly, the trial court

properly entered partial summary judgment in favor of plaintiffs on this basis.

On their cross-appeal, plaintiffs contend that the reserves are subject to the requirements

in the Declaration that costs for limited common elements can only be assessed to the unit owners

benefitted therefrom. We agree. However, plaintiffs also contend the Association is prohibited

from using 83.3% of the existing reserve funds and up to 83.3% of future monthly assessments to

pay for the repair of the James House windows or as collateral for financing the repair of the

windows. We find plaintiffs’ argument to be flawed and without merit.

It is undisputed that the percentage of the total monthly assessments collected on behalf of

the James House unit owners is 83.3%, equal to their ownership or membership in the

Association. Since part of the monthly assessment goes into the Association’s reserve fund, it

necessarily follows then that the James House unit owners also own 83.3% of the reserve fund.

Because expenditures for limited common elements may only be assessed to those unit owners

directly benefitted therefrom, it also follows that the Association may use up to 83.3% of those

funds for limited common elements for the benefit of the James House unit owners. Accordingly,

the trial court correctly ruled that the Association may use up to 83.3% of the reserves and future

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monthly assessments for replacement of the James House windows in accordance with their

ownership in the Association.

CONCLUSION

For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.

Affirmed.

MURPHY, P.J., and QUINN, J., concur.

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REPORTER OF DECISIONS – ILLINOIS APPELLATE COURT Please Use (Front Sheet to be Attached to Each Case) Following Form: SUZANNE RIDENOUR and DAN McNAMARA,

Complete Plaintiffs-Appellees and Cross-Appellants, TITLE v. of Case

CARL SANDBURG VILLAGE No. 7 CONDOMINIUM ASSOCIATION,

Defendant-Appellant and Cross-Appellee

(Juliet DiIorio and Mary Guth, Plaintiffs). Docket No. No. 1-09-1793 COURT Appellate Court of Illinois First District, THIRD Division

Opinion May 19, 2010 Filed (Give month, day and year)

JUSTICES JUSTICE STEELE delivered the opinion of the court:

Murphy, P.J., and Quinn, J., concur

Lower Court and Trial Judge(s) in form indicated in the margin: APPEAL Circuit Court of Cook County, Chancery Div. from the Circuit The Honorable William O. Maki , Judge Presiding. Ct. of Cook County, Chancery Indicate if attorney represents APPELLANTS or APPELLEES and include Div. attorneys of counsel. Indicate the word NONE if not represented. Attorneys for Plaintiffs-Appellees Katten & Temple LLP and Cross-Appellants: 542 S. Dearborn Street, Suite 1060 Chicago, IL 60605 (John M. George, Jr., Mitchell B. Katten, and Nancy A. Temple, of counsel) For APPELLANTS , Attorneys for Defendant-Appellant DLA Piper LLP (US) John Doe, and Cross-Appellee: 203 N. LaSalle Street, Suite 1900 of Chicago, IL 60601 Chicago. (Kenneth L. Schmetterer and Daniel J. Brenner, of counsel)

For APPELLEES, Smith and Smith of Chicago, Joseph Brown, (of