Schwaner v. Belvidere Medical Building Partnership

508 N.E.2d 522, 155 Ill. App. 3d 976, 108 Ill. Dec. 361, 4 U.C.C. Rep. Serv. 2d (West) 785, 1987 Ill. App. LEXIS 2515
CourtAppellate Court of Illinois
DecidedMay 18, 1987
Docket2—86—0296, 2—86—0348 cons.
StatusPublished
Cited by22 cases

This text of 508 N.E.2d 522 (Schwaner v. Belvidere Medical Building Partnership) 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
Schwaner v. Belvidere Medical Building Partnership, 508 N.E.2d 522, 155 Ill. App. 3d 976, 108 Ill. Dec. 361, 4 U.C.C. Rep. Serv. 2d (West) 785, 1987 Ill. App. LEXIS 2515 (Ill. Ct. App. 1987).

Opinion

PRESIDING JUSTICE LINDBERG

delivered the opinion of the court:

Defendants, Belvidere Medical Building Partnership and the individual partners, Lester G. Detterbeck, Lawrence B. Irwin, and Andrea D. Hall, appeal from a $91,813.70 summary judgment entered in favor of M. Paul Dommers. We have allowed the parties’ motion to dismiss as to all plaintiffs except Dr. M. Paul Dommers, the only plaintiff remaining in the case. Defendants further appeal the denial of their motions to reconsider and for leave to file an amended counterclaim. Plaintiff appeals from the order denying attorney fees. The issues raised on appeal are: (1) whether the trial court erred in granting plaintiff’s motion for summary judgment; (2) whether the trial court erred in denying defendants’ motions to reconsider and for leave to file an amended complaint; and (3) whether the trial court erred in denying plaintiffs’ motion for attorney fees. We affirm in part, reverse in part, and remand.

This action arises from four promissory notes totalling $250,000 given by defendants to four individuals, including plaintiff, M. Paul Dommers, as part of the purchase price for a medical office building in Belvidere. In 1981, plaintiff and the other partners of the Belvidere Medical and Office Building Partnership executed a written contract for sale of the building to defendants. The contract was negotiated by plaintiff on behalf of the sellers, and Lawrence Irwin on behalf of the buyers, defendants herein. The contract provided, inter alia:

“PURCHASE PRICE: The price is $1,300,000.00 payable as follows:
(a) $30,000.00 upon execution of this contract;
(b) The payment of $270,000.00 at the time of closing;
(c) The payment of $1,000,000.00 at the time of closing.
The price allocation for the purchase price is as follows:
(a) Building — $900,000.00;
(b) Improvements — $200,000.00;
(c) Lease Guarantee — $115,000.00;
(d) Finance Guarantee — $85,000.00.”

The contract further provided:

“This contract is further contingent upon the SELLER [Belvidere Medical and Professional Building Partnership] providing PURCHASER a second mortgage in the amount of $250,000.00, with interest not to exceed 12% per annum, to be amortized over 29 years, payable monthly, with no loan costs.”

The buyers executed four promissory notes in favor of the buyers as security for the $250,000 second mortgage. Each promissory note, including that given to plaintiff, provided the following:

“In case of any default in the payment of any installment, the holder of this note may, without notice, declare the entire balance immediately due and payable, and thereafter said balance shall bear interest at the rate of 17% per year.”

The note was secured by a trust deed for the real estate occupied by the medical building and was personally guaranteed by each one of the buyers.

Further, the note contained the following provision:

“The monthly payments of this obligation shall be abated in the event that a 1980 or 1981 tax bill is issued on the property underlying the Belvidere Medical and Professional Building until such time as the amount of the tax bill or bills is credited. The 1981 tax bill shall be prorated as of July 24, 1981. The undersigned shall use the funds so abated in the payment of said taxes.”

Defendants did not receive a real estate tax bill for the year 1981. Lawrence Irwin in his deposition testified that he and the other defendants were told that the medical building, the subject of the transaction, “was a nontaxed building because it was on the hospital’s [St. Joseph Hospital of Belvidere’s] land.” Eventually in 1983, defendants were apprised of the fact that the building and the underlying real estate were sold for nonpayment of real estate taxes. This information was communicated to defendants two months prior to the expiration of the period of redemption. Defendants then exercised their right to redeem the real estate by paying the entire amount of delinquent real estate taxes plus a substantial penalty. Real estate taxes for the year 1981 were $22,244.16 plus a penalty assessment of $8,010.90. The sellers’ prorated portion of the taxes without penalty was $12,431.70.

The other provisions of the sale contract which are the subject of this case are:

“REPRESENTATIONS BY SELLER: The SELLER warrants and represents as follows:
(a) The water, sewer, plumbing, heating and electrical systems in the building and covered corridor on the premises are in working order and the roof is free from leaks;
* * *
CONTINGENCIES: This agreement is specifically contingent upon execution of the following leases with two month security deposits paid in advance on or before the date of closing:
* * *
(b) Paul Dommers’ lease of 2,515 square feet at $12.00 a square foot for a five year term, with yearly cost of living increases;
(c) American Institute of Orthomolecular Research, Inc. lease with a personal guarantee of Tom Jaunch of 3,689 square feet at $12.00 a square foot for a five year term, with
yearly cost of living increases.
* * *
Failure to meet any of these contingencies renders this agreement null and void and purchaser’s deposit or earnest money shall be returned forthwith.”

The contract also contained an integration clause. Plaintiff and defendants, through Lawrence B. Irwin, closed on the sale of the building on July 24, 1981. The closing statement provided, inter alia:

“Seller hereby warrants and represents that all building expenses incurred on or before the date of closing will be paid by seller. Buyer represents and warrants that they will pay all building expenses incurred after the closing. Seller further represents and warrants that there are no contractual expenses extending beyond closing.”

Contrary to this warranty given at the time of closing, there were outstanding bills on the property in the amount of $16,946.96 owed to Commonwealth Edison, which defendants paid.

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Bluebook (online)
508 N.E.2d 522, 155 Ill. App. 3d 976, 108 Ill. Dec. 361, 4 U.C.C. Rep. Serv. 2d (West) 785, 1987 Ill. App. LEXIS 2515, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schwaner-v-belvidere-medical-building-partnership-illappct-1987.