Rotello v. Scott

419 N.E.2d 1233, 95 Ill. App. 3d 248, 50 Ill. Dec. 784, 1981 Ill. App. LEXIS 2441
CourtAppellate Court of Illinois
DecidedApril 15, 1981
Docket80-259
StatusPublished
Cited by7 cases

This text of 419 N.E.2d 1233 (Rotello v. Scott) 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
Rotello v. Scott, 419 N.E.2d 1233, 95 Ill. App. 3d 248, 50 Ill. Dec. 784, 1981 Ill. App. LEXIS 2441 (Ill. Ct. App. 1981).

Opinion

Mr. JUSTICE LINDBERG

delivered the opinion of the court:

In an action for negligent misrepresentation of a material fact in a commercial real estate transaction, the Circuit Court of Winnebago County, after a bench trial, found defendants guilty and awarded plaintiffs $5,700 in damages. From this verdict, defendants appeal.

In October of 1977, Jasper and Pamela Rotello (plaintiffs), who were then operating a soft-serve ice cream business in the city of Rockford, contacted Lee Johnson, a realtor, to seek his help in finding a new location for their business. In December, plaintiffs notified Johnson that they were interested in a piece of property at 2111 Harlem Road. Upon investigation, Johnson discovered that the property was owned by R. Neil Scott and Robert Hultgren (defendants). Johnson obtained the owners’ permission to show the property to the plaintiffs.

The property was comprised of three tracts. On the northernmost tract was a building which housed a restaurant, then vacant. The second tract was occupied by a leased mini-putt operation, and apparently a small building. The third tract was vacant.

Plaintiffs viewed the property on several occasions between December 20,1977, and mid-January 1978. An inspection of the grounds outside the buildings, however, was limited due to the heavy snowfall at this time.

Sometime in early January 1978, Johnson, at plaintiffs’ request, called one of the owners, Mr. Scott, and inquired whether there was a sewer and water hookup to the building housing the restaurant. Defendant replied “yes.” At trial, defendant admitted that by “sewer” he meant public sewer.

On January 21, the parties entered into a real estate contract for the purchase of the entire property for $84,000. Although the contract was made contingent upon obtaining appropriate zoning so as to allow the operation and expansion of plaintiffs’ ice cream business, no mention of sewer hookup was made in the contract.

The closing was on March 20. Shortly thereafter, a plumber inspecting the building for purposes of renovation informed the Rotellos that it looked as if the plumbing was not connected to the public sewer, but to a septic system. The records of the Rockford Sanitary District subsequently confirmed this fact.

When told of this discovery, defendants met with the Rotellos and offered to rescind the contract and return the purchase price. The Rotellos refused.

In November, plaintiffs purchased an easement from an adjoining property owner so as to hook up their plumbing to the city sewer. In addition, pipe from the sewer to the building which housed the restaurant was laid. At trial, Mr. Rotello testified that the sewer connection was necessary to accommodate the large quantity of water cycled through the ice cream cooling system, for which the septic tank was inadequate. Although plaintiffs had experimented with an internal recycling system from July to September, it had failed to maintain a sufficiently cold temperature.

On December 7, 1978, plaintiffs filed suit to recover damages incurred as a result of defendants’ negligent misrepresentation that the property was connected to the sewer.

I.

Defendants’ first contention on appeal is that the trial court’s finding that they negligently misrepresented the existence of a city sewer hookup was against the manifest weight of the evidence.

In arguing this issue, both parties rely on Lyons v. Christ Episcopal Church (1979), 71 Ill. App. 3d 257, 389 N.E.2d 623. Plaintiff in that case had purchased a residence owned by the church which had been advertised as having sewers. The church (through its attorney) had made this representation to a realtor who had, in turn, placed the ad in the newspaper. After purchasing the house, plaintiff discovered that there was no sewer, but only a septic system. An action against the realtor and church for negligent misrepresentation followed.

The court dismissed the suit against the realtor because as a mere conduit for the church’s representations, he had no duty to independently corroborate its claims unless he was aware of facts which indicated they were false.

As to the church, however, a cause of action lay for negligent misrepresentation since the church had breached its duty of care to the buyer when it affirmatively represented to the realtor, and through the realtor’s agents to the plaintiff, that the house was connected to the sewer when in fact it was not. Moreover, the court held that the plaintiff was not limited to the equitable remedy of rescisión for mistake of fact because the mistake was created by the defendant’s negligence.

In the case at bar, defendants have attempted to distinguish Lyons on several grounds. First, they argue that the real estate broker here, Johnson, was plaintiffs’ agent whereas in Lyons the realtor was the agent of defendant. Even if this were so, however, the only significance which defendants attach to the fact of agency is apparently that since the buyers through the realtor sought out the seller, rather than vice versa, the seller had no duty of care in his representations with respect to the buyers. No authority is cited for this novel limitation of responsibility. Indeed, it is common for a duty of reasonable care to be found where a representation is made to a third person with knowledge that he intends to communicate it to another. See W. Prosser, Law of Torts §107, at 707 (4th ed. 1971).

Second, defendants argue that unlike the specific affirmations made by defendants in Lyons, the representation by defendant Scott here was “casually made,” and without the “opportunity to prepare for the [realtor’s] question.” Therefore, defendants insist that neither the realtor nor the Rotellos could justifiably have relied on Scott’s statement that the building had a sewer.

We think that the realtor’s query was not, however, a difficult question requiring study and deep thought. Either the property had a sewer hookup or it didn’t. Nor can defendant’s response in any way be considered equivocal or ambiguous, of a kind that might reasonably trigger suspicion or further inquiry. Had defendant replied, “I don’t know,” or, “I’m pretty sure,” this would be a very different case. But for the owner of the property to say “yes” when he really didn’t know is negligent, as the trial court held. Likewise, as in Lyons, plaintiffs’ reliance on Scott’s statement without further inquiry was justified where no evidence to the contrary that might have given rise to doubt was known by the Rotellos or their realtor. There is nothing unreasonable about a buyer relying on the statement of a seller of real estate that the property has a sewer, and there is nothing in the facts of this case that would suggest that the buyers’ reliance, to be justified, required that they further check the records of the sanitary district for confirmation. Cf. Citizens Savings & Loan Association v. Fischer (1966), 67 Ill. App. 2d 315, 214 N.E.2d 612

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

Related

Harkala v. Wildwood Realty, Inc.
558 N.E.2d 195 (Appellate Court of Illinois, 1990)
Century Universal Enterprises, Inc. v. Triana Development Corp.
510 N.E.2d 1260 (Appellate Court of Illinois, 1987)
Havoco of America, Ltd. v. Hilco, Inc.
731 F.2d 1282 (Seventh Circuit, 1984)
Lenzi v. Morkin
452 N.E.2d 667 (Appellate Court of Illinois, 1983)

Cite This Page — Counsel Stack

Bluebook (online)
419 N.E.2d 1233, 95 Ill. App. 3d 248, 50 Ill. Dec. 784, 1981 Ill. App. LEXIS 2441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rotello-v-scott-illappct-1981.