Justia Illinois Supreme Court Opinion Summaries

The Property of Unincorporated Associations Act, 765 ILCS 115/2, requires a labor union to notify its members and obtain their approval before entering into an agreement to lease or purchase real estate. The circuit court held that an agreement is enforceable despite a union’s failure to follow these requirements because the Act is silent as to the consequences of noncompliance. The appellate court affirmed. The Illinois Supreme Court reversed. Where a party lacks the legal authority to form a contract, the resulting contract is void ab initio. Absent compliance with the statutory prerequisites, an unincorporated association has no power to execute a valid real estate contract. The apparent authority doctrine is not relevant. A contract that is void ab initio is treated as though it never existed and, thus, cannot be enforced by either party. View "1550 MP Road LLC v. Teamsters Local Union No. 700" on Justia Law

The owners of units in Sienna Court Condominiums, a newly-constructed 111-residential-unit Evanston property sued, alleging that the developer, TR, sold the units with latent defects that resulted in water infiltration and other conditions that rendered the individual units and common areas unfit for habitation. The complaint alleged breach of an express warranty and breach of an implied warranty of habitability against TR, the general contractor, the architect and engineering design firms, material suppliers and several subcontractors. TR and the general contractor were bankrupt. The unit owners obtained relief from the automatic bankruptcy stay. TR and the general contractor had two separate insurance policies, each providing coverage of $1 million per occurrence with $2 million aggregate limits. Plaintiffs had recovered approximately $308,000 from TR through a warranty escrow fund required by Evanston ordinance. Subcontractors and the material suppliers asserted that they were not subject to an implied warranty of habitabililty. The circuit court denied their motion to dismiss. The Illinois Supreme Court reversed, holding that a purchaser of a newly constructed home may not assert a claim for breach of an implied warranty of habitability against a subcontractor who took part in the construction of the home, where the subcontractor had no contractual relationship with the purchaser. View "Sienna Court Condominium Assoc. v. Champion Aluminum Corp." on Justia Law

Herndon sued Whiteside, doing business as Beam Oil, for breach of contract and conversion because defendant refused to pay plaintiff royalties arising from an oil and gas lease. The Macon County circuit court dismissed, finding that plaintiff did not own the claimed overriding royalty interest but defendant did. The Fourth District affirmed the dismissal of the conversion claim but remanded the breach of contract claim. Defendant appealed. The Illinois Supreme Court reinstated the dismissal. The instrument of assignment, signed after a series of transactions, unambiguously transferred all of plaintiff’s interest to defendant, so defendant’s refusal to pay plaintiff royalties was not a breach. Plaintiff and third parties each assigned to defendant “all of [their] right, title and interest in and to the oil, gas and mineral leases *** together with a like interest in and to all personal property located therein.” The instrument has no inconsistency or ambiguity that needs clarification. View "Ramsey Herndon LLC v. Whiteside" on Justia Law

Fee-sharing provisions in otherwise valid retainer agreements between clients and two separate law firms are not unenforceable simply because the primary service performed by one firm is the referral of the clients to the other and the agreements fail to specifically notify clients that each firm has assumed joint financial responsibility for the representation.In 2007-2010, Plaintiff, a Gurnee law firm, was retained by 10 clients for representation under the Workers’ Compensation Act. Plaintiff contracted with attorney Esposito for assistance in representing the clients before the Workers’ Compensation Commission. A letter of understanding was drafted by defendant, confirming that the cases had been referred to defendant by plaintiff, outlining the parties’ respective responsibilities regarding representation of the clients, and specifying that the attorney fees obtained in each case would be split between Plaintiff and Esposito. The agreements did not specifically notify the clients that the lawyers in each firm had assumed joint financial responsibility for the representation. Plaintiff’s breach of contract suit against Esposito was dismissed. The Illinois Supreme Court affirmed the appellate court’s reversal, rejecting an argument that the agreements’ lack of an express statement that the attorneys assumed joint financial responsibility violated Rule 1.5(e) of the Illinois Rules of Professional Conduct and thereby rendered the agreements invalid. View "Ferris, Thompson & Zweig, Ltd. v. Esposito" on Justia Law

The 2009 Video Gaming Act (230 ILCS 40/1)) legalized the use of video gaming terminals in licensed establishments, including bars, veterans’ organizations, and truck stops, and authorizes the Illinois Gaming Board to supervise all video gaming operations governed by the Act. A video gaming terminal may be placed in a licensed establishment only if the establishment has entered into a written use agreement with the licensed terminal operator. A use agreement may be assigned only from one licensed terminal operator to another. Action, an unlicensed terminal operator, executed “Exclusive Location and Video Gaming Terminal Agreements” with each of 10 establishments, stating that Action and the establishments would obtain licenses. In 2012 the parties amended their agreements by adding clauses, purportedly “necessary in order for the Agreement to comply with the [Act] and the rules and regulations," including clauses providing that Action could assign its rights and acknowledging that the agreement and the amendment “are subject to and contingent upon the [Gaming Board’s] review.” In 2012, the Board denied Action’s license application based on findings that Acton employees were associated with individuals who had been convicted of illegal gambling. Action assigned its rights under the agreements to J&J, a licensed operator. The establishments were not yet licensed. Subsequently, each of the establishments signed separate location agreements with Accel, a licensed operator. J&J and Action sued; the circuit courts ruled that the location agreements were not use agreements, but were valid contracts, and enjoined Accel from operating terminals at the establishments. The appellate court and the Illinois Supreme court held that the circuit courts lacked subject-matter jurisdiction because the Board has exclusive authority over contracts for the placement of video gaming terminals. The comprehensive statutory scheme vests jurisdiction over video gaming operations with the Board; the agreements purport to control placement and operation of video gaming terminals. View "J&J Ventures Gaming, LLC v. Wild, Inc." on Justia Law

In 2005, Masterklad built a house in Glenview, including a brick patio that extended off the rear of the house. Because the ground underneath the patio sloped down, dirt and gravel were placed underneath it to support the bricks and make them level with the house's rear entrance. A retaining wall was built to contain the fill. In 2007, the house was sold by Masterklad to a Lubeck for $1,710,000. In the contract Lubeck “knowingly, voluntarily, fully and forever,” waived the implied warranty of habitability in exchange for an express warranty provided by Masterklad, with a one-year term. In 2010, Lubeck sold the house to Fattah, for $1,050,000, with a document stating that the house was being sold “as is” and that the seller made no representations or warranty regarding its condition. In 2011, parts of the retaining wall around the rear patio gave way and part of the patio collapsed. The owner sued. The circuit court found that the patio wall had given way due to latent defects in its construction, but that plaintiff could not recover because Masterklad had executed a valid, enforceable waiver of the implied warranty of habitability with Lubeck. The appellate court reversed. The Illinois Supreme Court reversed. The implied warranty of habitability may not be extended to a second purchaser of a house when a valid, bargained-for waiver of the warranty has been executed between the builder-vendor and the first purchaser. View "Fattah v. Bim" on Justia Law

After the 2004 collective bargaining agreement (CBA) between the Unions and the Chicago Transit Authority (CTA) expired, the retiree health care benefits were the subject of an interest arbitration award. That award, which modified the retiree health care benefits, was accepted by the CTA and the Unions. Current and retired employees who had begun work with the CTA before 2001 challenged that award in a putative class action, asserting breach of contract, promissory estoppel, breach of fiduciary duty, and that the arbitration award was unenforceable under article XIII, section 5, of the Illinois Constitution, the “pension protection clause.” The circuit court ruled that the retired CTA employees had standing to challenge the modifications to their retiree health care benefits, but current CTA employees lacked standing, then dismissed for failure to state a claim. The appellate court agreed that current employees lacked standing but held that the retirees had a vested right to receive the health care benefits that were provided in the prior CBA and had stated claims for breach of that contract and for promissory estoppel. The Illinois Supreme Court held that plaintiffs who retired before the effective date of the 2007 CBA had standing; other retirees and current employees lacked standing. Dismissal of the claim for promissory estoppel against the CTA was proper; the complaint stated claims for breach of contract and under the pension protection clause. View "Matthews v. Chicago Transit Auth." on Justia Law

Husband and wife (who did not speak English) entered into a written one-year lease, took possession of the apartment, and tendered the security deposit and first month’s rent. Ten days into the lease, they received “an official 30 days notice” of eviction, stating that “[c]onstruction begins June 10,” and that they did not qualify for an unspecified “new program.” Several additional efforts to force the family to move followed; their tender of rent was refused. They purportedly sought legal advice and were told that the landlord could not unilaterally terminate the lease. They reported feeling discriminated against and harassed; they were confused, depressed, and anxious. Demolition began while the family was occupying the apartment. Husband allegedly told wife that he could not tolerate the situation any longer. The following day, he committed suicide in the apartment. Wife sought damages for intentional infliction of emotional distress, wrongful eviction, breach of contract; under the Wrongful Death Act; and under the survival statute. The trial court dismissed the wrongful death and related survival actions, finding that “wrongful death via suicide” is not cognizable in Illinois. The Illinois Supreme Court agreed. Despite an ostensible connection between severe emotional distress and suicide, suicide may result from a complex combination of factors. It is “rare” that suicide would not break the chain of causation and bar a wrongful death action, even where the plaintiff alleges the defendant inflicted severe emotional distress. Husband’s suicide was not a reasonably foreseeable result of defendant’s alleged conduct in breaking the lease and pressuring the family to vacate. View "Turcios v. DeBruler Co." on Justia Law

Neumann Homes was the developer of two Antioch subdivisions. The Village entered into infrastructure agreements with Neumann to make public improvements in the subdivisions; Neumann provided four substantially identical surety bonds issued by Fidelity, totaling $18,128,827. The bonds did not contain specific “payment bond” language. A payment bond generally provides that if the contractor does not pay its subcontractors and material suppliers, the surety will pay them. In contrast, a “completion bond” or “performance bond” provides that if the contractor does not complete a project, the surety will pay for its completion. Lake County Grading (plaintiff) and Neumann entered into agreements for plaintiff to provide labor and materials for the improvements. Plaintiff completed the work, but was not paid in full. Neumann defaulted on its contract with the Village and declared bankruptcy. Plaintiff served Neumann and the Village with notices of a lien claim and ultimately filed suit, alleging breach of contract because the surety bonds did not contain language guaranteeing payment to subcontractors compliant with the first paragraph of section 1 of the Bond Act, 30 ILCS 550/1, and that it became a third-party beneficiary of the contracts between the Village and Neumann because the Act’s requirements are read into every public works contract for the benefit of subcontractors. The circuit court entered summary judgment on those counts. The appellate court affirmed. The Illinois Supreme Court reversed, holding that the bonds were sufficient and did not violate the Act, so that the Village did not breach any contractual obligation. View "Lake Cnty. Grading Co. v. Vill. of Antioch" on Justia Law

In 1998 the Gillespie School District hired Wight under for services preliminary to the actual designing and construction of a new elementary school building. Wight agreed to perform a “site mine investigation.” Wight hired Hanson Engineers to assess the potential for coal mine subsidence. A physical engineer at Hanson sent a letter to Wight, noting recorded subsidence events, including five to six events since 1979, affecting more than 40 structures in the area. The letter stated: “No one can predict when or if the land above the roof-and-pillar mine will subside… The owner should consider the fact that there is no economically feasible corrective action… to guarantee against future subsidence… it can be intuitively concluded that there is a relatively high risk of subsidence in the Benld/Gillespie area. The letter was not attached to the report, which noted some of its highlights. The school was built and occupied, but in 2009 was severely damaged as the result of subsidence and was condemned. The District sued Wight, alleging professional negligence, breach of implied warranty, and fraudulent misrepresentation by concealment of material fact. The court entered summary judgment in favor of Wight, based on statutes of limitations applicable to the claims. The appellate court affirmed. The Illinois Supreme Court affirmed, noting that it was expressing no opinion concerning the merits of various claims. View "Gillespie Cmty. Unit Sch. Dist. No. 7 v. Wight & Co." on Justia Law