July 2024 IICLE FLASHPOINTS

On interlocutory appeal, the Second District of the Illinois Appellate Court recently reversed entry of summary judgment for the condominium association on certain questions presented in sale of the units pursuant to §15 of the Illinois Condominium Property Act, 765 ILCS 605/1, et seq. Boulder Hill Condominium Ass’n v. Cope, 2024 IL App (2d) 230425-U. Instructively, the case shows that when the bidding purchaser of the whole condominium building under §15 of the Act is a company owned by the spouse of a director, who also happens to be the representative of a different company that owns most of the units in the association, there may be a presumption of unfair dealing in breach of the board member’s and association’s fiduciary duties owed to the unit owners.

Facts

Ruben Ybarra served on the association’s board of directors. He was the representative of Boulder Hill Apartments, LLC, which owned a majority of the units in the association. 2024 IL App (2d) 230425-U at ¶5. In March 2017, an association meeting was convened to discuss a bulk sale of all the units pursuant to §15 of the Act. 2024 IL App (2d) 230425-U at ¶6. Boulder Hill Apartments, LLC, which owned most of the association’s units, was owned by YRY Holdings, LLC, which was managed by Yolanda Ybarra, Ruben’s wife. Id. According to the defendant, when the association saw that there would not be enough votes to approve the sale (i.e., 75 percent of the percentage ownership), the board prematurely ended the meeting without a vote. 2024 IL App (2d) 230425-U at ¶12.

An association meeting was held on May 4, 2017, to vote on whether to accept an offer to sell all the units for $1,591,800. 2024 IL App (2d) 230425-U at ¶4. More than 75 percent of the unit owners approved the sale. Id.

In March 2019, the plaintiff condominium association filed this action against defendant unit owner Cope, seeking (1) a mandatory injunction to compel the defendant unit to execute closing documents to convey the unit to the §15 purchaser, (2) a declaratory judgment that defendant breached the Act and attorneys’ fees and costs, and (3) a finding that defendant tortiously interfered with the §15 sale. 2024 IL App (2d) 230425-U at ¶3.

In May 2023, the trial court granted the defendant’s motion to file affirmative defenses and a counterclaim. 2024 IL App (2d) 230425-U at ¶7. The defendant’s affirmative defenses were that (1) Ruben used the association as an alter ego to breach the fiduciary duty he owed to all unit owners by drafting and promoting a sales contract for the benefit of his wife and himself, to the detriment of the other unit owners, and to initiate the association’s lawsuit with unclean hands for the benefit of YRY Holdings, LLC, which was managed and allegedly owned by Ruben’s wife, and (2) the cancellation of the March 2017 meeting breached fiduciary duties owed by the board. 2024 IL App (2d) 230425-U at ¶6. The defendant’s counterclaim against the association was for breach of fiduciary duties and for constructive fraud. 2024 IL App (2d) 230425-U at ¶7. In October 2023, the trial court granted the association’s motion for partial summary judgment from which the defendant appealed. 2024 IL App (2d) 230425-U at ¶11.

Analysis

On appeal, the defendant argued that the trial court erred in entering partial summary judgment as a matter of law because the association breached its fiduciary duties by (1) adjourning the March 2017 meeting when the board saw that it did not have sufficient votes to approve the §15 sale of the property, (2) negotiating the sale terms notwithstanding the board having a conflict of interest, and (3) negotiating a short sale of the defendant’s unit rather than paying off the defendant’s mortgage. 2024 IL App (2d) 230425-U at ¶18. The appellate court reviewed the trial court’s grant of partial summary judgment de novo. 2024 IL App (2d) 230425-U at ¶19.

The defendant’s argument that the adjournment of the March 2017 meeting constituted a breach of fiduciary duties was based on a misreading of Kai v. Board of Directors of Spring Hill Condominium Ass’n, 2020 IL App (2d) 190642, 171 N.E.3d 42, 446 Ill.Dec. 607. In Cope, the appellate court held that the association’s fiduciary duties owed to unit owners apply to §15 sales. 2024 IL App (2d) 230425-U at ¶22, citing Kai, supra, 2020 IL App (2d) 190642 at ¶19. “Thus, each board member here has strict duties to treat the unit owners ‘with the utmost candor, rectitude, care, loyalty, and good faith — in fact to treat [them] as well as [he] would treat himself.’ ” 2024 IL App (2d) 230425-U at ¶24, quoting Boucher v. 111 E. Chestnut Condominium Ass’n, 2018 IL App (1st) 162233, ¶36, 117 N.E.3d 1123, 427 Ill.Dec. 186. “Where an association breaches its fiduciary duties in promulgating a section 15 sale, the sale may be set aside.” 2024 IL App (2d) 230425-U at ¶22, citing Kai, supra, 2020 IL App (2d) 190642 at ¶35. It is correct that the appellate court’s opinion in Kai discussed that an early board meeting on the proposed §15 sale was adjourned, without allowing discussion, when the board realized that sufficient votes were not present to approve the sale. However, such meeting adjournment was never identified in the Kai opinion as a basis for finding of a breach of a fiduciary duty by the association. 2024 IL App (2d) 230425-U at ¶24, citing Kai, supra, 2020 IL App (2d) 190642 at ¶26.

Regarding the defendant’s affirmative defense and counterclaim that the association breached its fiduciary duties owed based on Ruben’s conflict of interest in serving as director on the board while his wife was manager and part owner of the §15 purchaser, the appellate court reversed the trial court’s grant of summary judgment. The defendant’s allegations and the evidence presented at summary judgment raised a presumption of undue influence by the association and the burden shifted to the association to show by clear and convincing evidence that the underlying transaction was fair. 2024 IL App (2d) 230425-U at ¶¶29, 32.

The appellate court rejected the association’s counterargument that it was not a party to the sale contract because Ruben found himself on both sides of the transaction. 2024 IL App (2d) 230425-U at ¶33. He acknowledged that he was involved with his wife in creating the sale price, but in doing so he was not wearing his association hat. The court rejected this argument finding that he was self-dealing while being under fiduciary duties to the unit owners. Id. Section 15 has a dissenting process written into it wherein objecting unit owners have to get appraisals to contest their share of the sale proceeds. Here, the defendant did not follow that process. The appellate court found that the trial court’s consideration of this process effectively reversed the shifted burden of proving the transaction was fair to the defendant when it should have been placed on the association. Id.

The appellate court also rejected the association’s argument that the disclosure of Ruben’s relationship with the §15 purchaser and the defendant’s voting against the sale proved that there was no undue influence. “Essentially, plaintiff takes the risible position that defendant’s actions in hampering the section 15 sale evinces the sale’s fairness. Indeed, by [the association’s] backwards logic, hiring an attorney to bring a claim of a breach of a fiduciary duty would actually serve as evidence of the fiduciary’s loyalty.” 2024 IL App (2d) 230425-U at ¶37.

Therefore, the appellate court vacated partial summary judgment and remanded the case to the trial court. 2024 IL App (2d) 230425-U at ¶43.

For more information about condominium law, see CONDOMINIUM LAW: DAILY OPERATION CHALLENGES (IICLE®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Kenneth Michaels, Jr., Bauch & Michaels, LLC, Chicago

Kenneth A. Michaels, Jr. is a partner at Bauch & Michaels, LLC, with over four decades of experience in commercial litigation, transactions, and corporate governance. He represents a diverse clientele, including banks, insurance companies, and Fortune 500 businesses, specializing in asset sales, property management, and loan agreements. Ken is also a recognized Illinois “Super Lawyer” in real property law and has contributed extensively to legal education and community service. He teaches at the University of Illinois Chicago Law School and has been a public official in Illinois for nearly 30 years.

In People v. Thornton, 2024 IL App (4th) 220798, the Fourth District Appellate Court held that the admission of social media messages exchanged between a defendant and a gang associate were relevant to establishing the sequence of events that led to the defendant’s motive for murdering the victim after the victim had previously disrespected a member of the defendant’s gang.

In Thornton, the victim was shot and killed on October 30, 2018, after walking away from his vehicle in Bloomington. The vehicle’s battery had died, and the victim’s friends stayed with the vehicle while the victim had walked away while waiting for assistance. 2024 IL App (4th) 220798 at ¶7.

During the trial, the state presented gang-expert testimony from a Bloomington detective. The detective explained that in the Bloomington-Normal area, the relevant hybrid gangs for the defendant’s case included the FBMG 200s, the Making Money Gang (MMG), and Black Boys Entertainment (BBE). The detective explained that the MMG and BBE were closely aligned and considered to be the same group. The detective said that MMG/BBE had been rivals with the FBMG 200s since 2015. 2024 IL App (4th) 220798 at ¶¶33 – 34.

The detective further explained that a gang member can disrespect a rival gang by using the rival gang’s hand sign in a downward fashion. This disrespectful act is intended to incite violence. 2024 IL App (4th) 220798 at ¶35.

The detective testified that the victim and his associate Shawndell Wright were gang associates of the FBMG 200s. The victim’s deceased brother was also a FBMG 200s member. The detective determined that the defendant was a member of the Gangster Disciples (who were associated with MMG/BBE) after reviewing his social media accounts and Facebook messages that were exchanged between the defendant and another person. The defendant’s social media accounts showed him displaying Gangster Disciple insignia and disrespecting a rival gang’s signs in a downward manner. 2024 IL App (4th) 220798 at ¶36.

The detective also testified about reviewing a Facebook Messenger conversation held on September 18, 2018, between the defendant and an FBMG 200s member named Frederick Bumper. The conversation reflected that Bumper asked the defendant if he had been “smoking” (i.e., making disrespectful comments about) the victim’s brother, who was killed in another 2018 homicide. The detective opined that disrespecting the dead was the ultimate form of disrespect between gang members and can lead to violence. The conversation escalated to them telling each other where they could be found and to come fight. 2024 IL App (4th) 220798 at ¶37.

The defendant and Bumper exchanged social media challenges in October. The detective opined that the defendant would have been pressured or expected to respond to Bumper’s disrespectful statements or risk losing face within his own gang. 2024 IL App (4th) 220798 at ¶38.

The defendant was found guilty of first-degree murder and appealed. 2024 IL App (4th) 220798 at ¶42. In his appeal, the defendant argued that the Facebook messages between him and Bumper should not have been admitted because they were too remote and speculative in order to give him a motive for killing the victim. 2024 IL App (4th) 220798 at ¶49.

The appellate court held that the Facebook Messenger conversations with Bumper were relevant to show the beginning of a sequence of events that established the defendant’s motive for killing the victim. Although the conversation occurred three weeks before the shooting, the conversation showed that tensions were rising between the gangs because of disrespectful exchanges about deceased gang members. The appellate court agreed with the state that the conversation alone was not used to show that the defendant was the shooter but instead chronicled the development of the feud between the gangs. 2024 IL App (4th) 220798 at ¶57.

The appellate court also noted that the probative value of the Facebook Messenger conversation was not substantially outweighed by the risk of unfair prejudice to the defendant. Although the conversation singled out the defendant compared to the other gang members who were in the suspect car during the shooting, none of those witnesses testified that the defendant was responsible for shooting the victim and the conversation did not prevent the defendant from presenting evidence that undermined the state’s case. 2024 IL App (4th) 220798 at ¶58.

For more information about criminal law, see FEDERAL CRIMINAL PRACTICE (IICLE®, 2023). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Matthew R. Leisten, Ogle County State’s Attorney’s Office, Oregon, IL

Matthew R. Leisten serves as the First Assistant State’s Attorney for the Ogle County State’s Attorney’s Office in Oregon, Illinois. In his role, he provides essential updates on caselaw relevant to search warrants, focusing on issues such as good faith, staleness, and the impact of modern technology on legal procedures. His expertise includes handling complex warrants involving advanced technologies like geofences and Triggerfish. Additionally, Leisten contributes to legal education through publications and presentations, ensuring that attorneys stay informed about current legal trends and practices.

The Illinois House and Senate considered and passed three bills addressing three hot topics in employment matters: reproductive health decisions, family responsibilities, and artificial intelligence (AI). Each bill would further amend the Illinois Human Rights Act (IHRA), 775 ILCS 5/1, et seq., and provide greater protections for employees. The bills await action by the Governor. If signed into law, employers will need to carefully review existing policies and procedures to ensure compliance.

House Bill 4867

H.B. 4867, 103rd Gen.Assem. (2024) adds “reproductive health decisions” to the list of categories protected from unlawful discrimination under the IHRA. The bill also adds a definition for this new protected category to mean “a person’s decisions regarding the person’s use of contraception; fertility or sterilization care; assisted reproductive technologies; miscarriage management care; healthcare related to the continuation or termination of pregnancy; or prenatal, intranatal, or postnatal care.”

House Bill 2161

H.B. 2161, 103rd Gen.Assem. (2024) amends the IHRA to make it a civil rights violation for an employer, employment agency, or labor organization to take an adverse employment action, harass, or retaliate against an applicant or employee based on “family responsibilities.” This new term is defined as “an employee’s actual or perceived provision of personal care to a family member.” Further, “personal care” means:

• activities to ensure that a covered family member’s basic medical, hygiene, nutritional, or safety needs are met, or
• to provide transportation to medical appointments, for a covered family member who is unable to meet those needs himself or herself; or
• being physically present to provide emotional support to a covered family member with a serious health condition who is receiving inpatient or home care.

“Family member” means an employee’s child, stepchild, spouse, domestic partner, sibling, parent, mother-in-law, father-in-law, grandchild, grandparent, or stepparent.

This bill states that an employer, employment agency, or labor obligation is not obligated to make accommodations or modifications to reasonable workplace rules or policies for an employee based on family responsibilities. Nor are they prohibited from taking adverse action or otherwise enforcing reasonable workplace rules or policies against an employee with family responsibilities as long as the policies are applied in accordance with the IHRA.

House Bill 3773

H.B. 3733, 103rd Gen.Assem. (2024) amends the IHRA to require employers to provide notice if they are using AI with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or other terms, privileges, or conditions of employment. This bill instructs the Illinois Department of Labor to adopt necessary rules on the circumstances and conditions that require notice and the period and means for providing notice.

This bill prohibits an employer from using AI that has the effect of subjecting employees to discrimination on the basis of protected classes under the IHRA or to use zip codes as a proxy for protected classes under the IHRA.

This bill also adds a definition under the IHRA, for “artificial intelligence,” which means a machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments. It also includes “generative artificial intelligence” which is defined under the IHRA as an automated computing system that, when prompted with human prompts, descriptions, or queries, can produce outputs that simulate human-produced content, including, but not limited to, the following:

• textual outputs, such as short answers, essays, poetry, or longer compositions or answers;
• image outputs, such as fine art, photographs, conceptual art, diagrams, and other images;
• multimedia outputs, such as audio or video in the form of compositions, songs, or short-form or long-form audio or video; and
• other content that would be otherwise produced by human means.

This bill has a delayed implementation date of January 1, 2026.

For more information about employment and labor law, see CONDUCTING THE EMPLOYMENT PRACTICES AUDIT (IICLE®, 2023). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Catherine R. Locallo, Robbins Schwartz, Chicago

Catherine R. Locallo, a partner at Robbins Schwartz, specializes in labor and employment law with a focus on education and board governance. She provides guidance on employment law, collective bargaining, and compliance with various acts. Catherine started as a paralegal, joined Robbins Schwartz in 2004, and became a partner in 2017. She holds a J.D. from The John Marshall Law School and a B.S. from Southern Illinois University. Notably, she is also involved in multiple professional organizations and community activities, including the Glenview Stars Hockey Association.

In In re Marriage of Gorr, 2024 IL App (3d) 230412, ¶28, a postjudgment matter rife with conflict and in which the trial court stated that “both . . . parents engage in such horrible behavior toward each other,” the parties filed various cross-petitions for modification of decision-making responsibilities of their two minor children, each asking in various forms to be granted sole decision-making. The parties had two sons, and the litigation centered around the parties’ fundamental disagreement in the approach to handling their older son, who had behavioral issues. The record evidenced that the mother was more aggressive in dealing with the problems clinically while the father preferred minimal medical intervention. After an eight-day trial that involved the testimony of two custody evaluators, the guardian ad litem and the child’s psychologist, the trial court declined to modify the joint decision-making parameters of the parenting agreement. In its order, it also removed what it deemed an obligation of the parties to comply with the professional recommendations of third parties. The mother appealed. The appellate court noted that the scope of the order, which the trial court modified, actually did not contain any mandate for the parties to comply with certain third-party professional recommendations, but only directed the parties to work with the child psychologist on a family therapy and behavior plan. While the record supported the trial court’s finding that a substantial change of circumstances was present, the trial court erred in not engaging in the best-interests analysis after it made its finding of a substantial change in circumstances. The appellate court directed the trial court on remand to consider how removing the requirement for the parties to cooperate on a family therapy plan was in the children’s best interests. It is the authors’ opinion that the appellate court was suspicious, based on the evidence presented at trial, that such analysis would yield a result that the removal of the requirement was in the best interests of the children.

Trial Court Reversed for Failing To Apply Appropriate Analysis on a Postjudgment Petition for Modification of Parental Decision-Making

In Gorr, supra, a highly litigious and contentious postjudgment parenting case, the trial court denied cross-petitions filed by both parents, each seeking sole decision-making responsibilities of their two minor children. The mother appealed, and the appellate court reversed and remanded, holding the trial court applied the incorrect standard in denying both parties’ petitions. The Third District noted that while the trial court may have “imputed” its substantial change of circumstances finding from the first issue it addressed (see above), it was not clear. 2024 IL App (3d) 230412 at ¶47. The court also noted that the father had requested sole decision-making with respect to medical and educational decisions and the mother had requested sole decision-making over all areas of decision-making. “The question of whether the parties’ exhibited hostility in the area of one significant decision-making area — medical decisions — presented a substantial change in circumstances warranting the parties’ request for the reallocation of decision-making over all statutorily identified significant issues is a nuanced distinction that seemingly went unexplored by the court.” Id. Therefore, the trial court abused its discretion, and the appellate court returned the case to the trial court to consider whether there was a substantial change of circumstances since the entry of the parenting agreement and, if so, whether any modification was in the children’s best interests.

First District Declines To Recognize New Tort for Interference with Custodial Rights

A mother filed a three-count lawsuit in the Circuit Court of Cook County against the father’s mother and brother for tortious interference with custodial rights in connection with the aiding and abetting of the removal of the minor children from Slovakia to Illinois and intentional infliction of emotional distress. Hulsh v. Hulsh, 2024 IL App (1st) 221521. The lawsuit came as a result of litigation in the Northern District of Illinois pursuant to the Hague Convention on the Civil Aspects of International Child Abduction, Oct. 25, 1980, T.I.A.S. No. 11670, 1343 U.N.T.S. 89, that the mother brought against the father after he removed the children from Slovakia, where they were living with her, and hid them in the Chicago area. The mother successfully prosecuted her Hague Convention case, and the children were returned to her. She then filed for fees and expenses against the father, who subsequently filed for bankruptcy. The district court eventually granted the mother just over $265,000 in fees, which was approximately 50 percent of her request. Unable to collect on the money judgment against the father, the mother filed in the Circuit Court of Cook County the case at issue. The Illinois appellate court held that only the Illinois Supreme Court or the legislature are permitted to create new causes of action, and because the Supreme Court has repeatedly declined to recognize a claim for tortious interference with custodial rights, it would continue to honor that precedent. The court also opined that the mother had the ability to seek her relief in the district court in her underlying Hague case. Justice Oden Johnson filed a dissent, arguing that public policy dictates that the court should have allowed the cause of action to proceed as a deterrent to future behavior when the facts were such that both the father’s mother and brother assisted the father in removing the children from their home and bringing them to Chicago and provided aid and support to the father to accomplish the same.

For more information about family law, see ADOPTION LAW (IICLE®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Donald C. Schiller, Schiller DuCanto & Fleck LLP, Chicago, Lake Forest & Wheaton

Donald Schiller is the Chair Emeritus and Of-Counsel at Schiller DuCanto & Fleck LLP. He co-founded the firm in 1981, making it the largest family law practice in the U.S. Known for handling high-profile divorce cases, Schiller has been recognized by numerous publications and has served in significant roles within the Illinois and American Bar Associations. He has also been a lecturer at the University of Chicago Law School and is a well-published author and speaker in the field of family law.

Michelle A. Lawless, Law Office of Michelle A. Lawless LLC, Chicago

Michelle A. Lawless, founder of The Law Office of Michelle A. Lawless LLC, has over 20 years of experience in family law. After a distinguished career at a prestigious litigation firm, she started her own practice to offer a more compassionate and resolution-focused approach. Michelle specializes in collaborative law, mediation, and attorney-assisted mediation, helping clients navigate family disputes with minimal conflict. She is recognized for her thought leadership, extensive financial expertise, and dedication to creating better outcomes for families.

This month, courtesy of the Fifth and First Districts, a public service announcement in support of the advocacy and protection real estate attorneys provide for their clients — namely, (1) the value of having a professional, pre-acquisition survey and (2) the importance of reviewing and understanding common interest/condominium association documents before purchase.

The Value of a Detailed Survey and the Risks to a Buyer in Not Having One

In Poll v. Williams, 2024 IL App (5th) 230333-U, the Fifth Circuit affirmed the lower court’s ruling, finding that the evidence failed to support a claim of adverse possession. 2024 IL App (5th) 230333-U at ¶1. Plaintiff Paul Poll purchased a property in 1979. 2024 IL App (5th) 230333-U at ¶4. Nearly 40 years later, Poll filed suit, in part to quiet title against his neighbors, Mark and Deborah Williams, on a parcel he claimed he owned and for adverse possession over another parcel owned by the Williamses. Id.

When Poll purchased his property in 1979, the then owner, Hansen, walked him around the property and informally indicated where the boundaries were, in part by pointing to a rock and stating that the boundary line moved north from that point. 2024 IL App (5th) 230333-U at ¶10. No professional survey appears to have been obtained at the time of Poll’s acquisition. In the ensuing years, Poll paved an existing gravel driveway he believed was on his property. 2024 IL App (5th) 230333-U at ¶¶10 – 12. He also installed a new well, and his wife may or may not have planted pine trees on property they considered their own, which the Williamses unilaterally cut down. Id. The Williamses acquired their parcel years after Poll had purchased his property. Hansen had owned a larger parcel of land, from which both Poll’s and the Williamses’ parcels had been subsequently subdivided.

In 2013, the Williamses and Poll each had professional surveys drawn up of their respective parcels. Poll’s 2013 survey was based on the survey markers left in the field by the Williamses’ surveyor and revealed different boundaries than those described to Poll in 1979 by Hansen. Id. Nonetheless, Poll continued to use and care for that portion of the property that went beyond the actual property line. Id.

In the ensuing years, multiple disputes arose between the neighbors. In 2018, Poll again had his property professionally surveyed, except this time Poll himself directed the surveyor on where to draw the lines and where to place the iron rods, which apparently the surveyor went along with. 2024 IL App (5th) 230333-U at ¶¶26 – 27. Indeed, Poll’s 2018 surveyor testified at trial, in part, that he knew where to draw the lines on the survey only because of Poll’s instructions, that no existing deeds or written descriptions confirmed Poll’s directed boundaries, and — based on the existing record of other recorded materials — that the Williamses were the title owners of the parcel Poll was claiming as his own. Id.

The case is extremely heavy with factual details not summarized in this brief article. Suffice it to say that given the conflicting testimony from various family members and neighbors regarding boundaries and usage of the parcels in question, the unavailability of Hansen (now deceased) to testify, the discrepancies between the recorded record and prior survey work versus the contents of Poll’s 2018 survey, and the elderly Poll’s failing memory and mounting credibility issues, the appellate court upheld the trial court’s denial of the vast majority of Poll’s adverse possession and trespass claims. 2024 IL App (5th) 230333-U at ¶57. Ultimately, after years of upheaval and acrimonious relationships with his neighbors, the trial court granted only Poll’s claim of adverse possession over a tiny sliver of land giving him access to the well he had installed, which was affirmed by the court on appeal. 2024 IL App (5th) 230333-U at ¶¶43, 57.

The above case provides a cautionary tale to buyers who do not receive and review a survey prior to acquiring land. While it is common practice in some parts of Illinois for buyers to forgo obtaining or insisting that a seller provide them with a professional land survey at the time of acquisition, an up-to-date survey prepared by a licensed surveyor can provide clarity regarding boundaries, encumbrances, and easements. Having a pre-acquisition survey may have gone a long way to avoiding or minimizing the conflicts and confusion experienced by Poll and his neighbors. Although surveys are not strictly required in order to purchase real property and title companies will still issue an owner’s title policy to a buyer without one, the insurance coverage will except from coverage anything that an accurate survey would have revealed, thus leaving a buyer with potentially less than ideal title insurance coverage. Moreover, not all surveys are created equal. Some provide more information than others. While it is unclear what, if any, professional legal advice Poll may or may not have received at the time of his acquisition — or whether he would have followed such advice — an experienced real estate attorney will outline the value of having a detailed pre-acquisition survey and the risks of not having one so that the client may make an informed decision on how to proceed. With the example of Poll above, hindsight is 20/20, but lay people cannot be expected to understand what they do not realize they do not know. Real estate attorneys are uniquely positioned to fill this void in the transaction, providing valuable insight, guidance, and advocacy to their clients.

The Importance of Understanding How an Association’s Documents May Impact a Buyer’s Plans for the Property

In Revite Corp. v. 2424 Chicago, Inc., 2024 IL App (1st) 221713, the appellate court affirmed in part the trial court’s dismissal of a condominium purchaser’s breach-of-contract and negligent misrepresentation claims against the sellers-developers. 2024 IL App (1st) 221713 at ¶1. Dr. Halyna Boryslavska relocated her home and medical practice to a new condominium building, purchasing two ground floor commercial units, a residential unit, and two parking spaces. 2024 IL App (1st) 221713 at ¶¶7 – 9. Prior to going under contract, Boryslavska told the developers’ representatives (who at the same time were also acting as the development’s realtors via a separate entity) that she would need a fence in the front of the commercial units, as her practice included pregnant women and children and the street was heavily trafficked. One of the representatives confirmed that the front of the commercial units would belong to Boryslavska’s practice and on two separate occasions stated that Boryslavska was free to install a fence in the outdoor space, although signage for the practice would require the association board’s approval. Id.

After these site visits and discussions, Boryslavska and her business entity, Revite Corporation, decided to execute purchase agreements for the residential unit, the commercial units, and the two parking spaces, which the developer, 2424 Chicago, Inc., accepted. 2024 IL App (1st) 221713 at ¶¶10, 14. At the time of contract execution, the commercial units were not part of the condominium association but, rather, would be subject to a reciprocal easement agreement (REA) governing the relationship between the owner of the commercial units (Revite) and the condominium association, as they all shared the same building and common elements and occupied the same parcel of underlying land. 2024 IL App (1st) 221713 at ¶¶13 – 15. The residential unit was part of the condominium association and would be subject to the condominium declaration. The proposed declaration prohibited owners from altering, constructing in, or removing from the common elements except with the permission of the association. Boryslavska and Revite were given a copy of the proposed REA and proposed declaration at the time of contract execution, as well as an opportunity to review the provisions of both documents. Id.

While the commercial units were not part of the condominium association initially, Boryslavska successfully negotiated for Revite to be an association member so that she could acquire a percentage ownership in the common elements, which she believed would include rooftop rights. 2024 IL App (1st) 221713 at ¶16. 2424 Chicago agreed and modified the declaration accordingly, granting the commercial units a percentage ownership in the common elements before recording the declaration with the county. With the inclusion of the commercial units in the condominium association and entirely subject to the provisions of the declaration, the REA was no longer needed and was never recorded. Id.

Shortly after closing on the commercial units, Boryslavska constructed the previously discussed fence in the outdoor space in front of her business. 2024 IL App (1st) 221713 at ¶17. After the completion of Revite’s fence, a majority of the association’s board determined that the area in front of the commercial units was part of the common elements under the declaration and successfully sued Revite to remove the fence, as Revite had not first obtained the board’s approval. Id.

Boryslavska and Revite filed their own complaint against 2424 Chicago and others, alleging, in part, breach of contract for failing to record the REA, which resulted in Revite’s being subject to the declaration and the governance of the association’s board, and negligent misrepresentation as a result of telling Revite that it could install a fence or that the area in front of the commercial units belonged to it. 2024 IL App (1st) 221713 at ¶¶21 – 25.

After two rounds of briefing on motions to dismiss, the trial court granted the sellers’ motion in part, dismissing Revite’s breach-of-contract claim because Boryslavska herself had negotiated for Revite’s condominium association membership and ownership of the common elements in place of the REA and, thus, could not state a breach of the contract for a result caused by her own actions. 2024 IL App (1st) 221713 at ¶26. The trial court subsequently granted summary judgment on some of the remaining counts, including Boryslavska and Revite’s negligent misrepresentation claims. 2024 IL App (1st) 221713 at ¶27. Boryslavska and Revite timely appealed the trial court’s decisions.

The appellate court, in its de novo review of both the trial court’s rulings, upheld the lower court’s decisions with respect to both Boryslavska and Revite’s breach-of-contract and negligent misrepresentation claims. 2024 IL App (1st) 221713 at ¶1. Clearly, Boryslavska and Revite did not fully understand the purpose and legal significance behind the REA or appreciate the fact that by making the commercial units part of the association, the need for the REA no longer existed and the commercial units were now subject to the dictates of the declaration. 2024 IL App (1st) 221713 at ¶¶57 – 60. While representations made to Boryslavska and Revite about the unfettered ability to erect a fence in front of the commercial units were accurate at the time they were made, those representations were accurate only when the commercial units were not part of the association. 2024 IL App (1st) 221713 at ¶¶68, 71. The appellate court further questioned the reasonableness of Boryslavska and Revite’s reliance on statements regarding fence building in this area because they had had an opportunity to review the declaration’s provisions prior to acquiring the parcels. 2024 IL App (1st) 221713 at ¶69. As the court noted, “a party is not justified in relying on representations made when he [or she] has ample opportunity to ascertain the truth of the representations before he [or she] acts.” Id., quoting Kopley Group V., L.P. v. Sheridan Edgewater Properties, Ltd., 376 Ill.App.3d 1006, 876 N.E.2d 218, 229, 315 Ill.Dec. 218 (2007). Here, the declaration, a copy of which was provided to Boryslavska and Revite months before the closing, defined “yard space” as part of the common elements, and, as a result, any construction in or alteration of this area required prior written approval of the association’s board. 2024 IL App (1st) 221713 at ¶70.

Like Poll discussed above, Revite is an extremely dense opinion, complicated by the fact that many of the same individuals behind the developer were also part of the real estate brokerage and general contractor marketing and constructing the project. In other words, the same people, wearing different hats in the transaction, were interacting with Boryslavska throughout the process, blurring the lines of what duties may have been owed to her at various points in the transaction, a factor relied on by the trial court in some of its analysis. There also may have been a question of the developer recording an amendment to the declaration that removed any roof rights for the commercial units about which Boryslavska appears to have not been notified — but those claims fell due to the way the buyer pleaded her allegations.

However, since the focus of this brief article is to highlight the value real estate attorneys bring to their clients, Revite provides a different cautionary tale to buyers: it is important to work with an experienced real estate attorney who can review materials governing ownership in or adjacent to a condominium/common interest association and who can explain the restrictions or obligations that may run with the land. Understanding the differences between an REA and a declaration and their legal impact on property ownership helps set a client’s expectations and may be the difference between a client buying a parcel that suits his or her needs and objectives and one that does not — or at least not pushing for a change that results in lowering the autonomy he or she has over the land.

For more information about real estate law, see REAL ESTATE TAXATION: ASSESSMENTS, RATE CHALLENGES, AND TAX SALE MATTERS (IICLE®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Genevieve M. Daniels, Genevieve M. Daniels, P.C.

Genevieve M. Daniels, a versatile litigator and transactional attorney, specializes in commercial, employment, and real estate law. She offers comprehensive legal services, including real estate transactions, employment law compliance, and dispute resolution. Genevieve's unique dual expertise allows her to provide clients with strategic insights and effective advocacy. She is also an active presenter, arts supporter, and passionate about Persian cooking and adventure travel.

The appellate court affirmed the circuit court’s judgment confirming the Commission in American Coal Co. v. Illinois Workers’ Compensation Commission, 2024 IL App (5th) 230815WC. The case involved statutory construction, and the court relied principally on the decision in Beelman Trucking v. Illinois Workers’ Compensation Commission, 233 Ill.2d 364, 909 N.E.2d 818, 330 Ill.Dec. 796 (2009). The claimant sustained injuries on November 5, 2016, when he was caught between a two-ton chunk of steel equipment and a coal block, crushing his stomach area. He was airlifted to a hospital in Indiana. He lost vision in both eyes and underwent multiple surgeries, including colon resection.

The claimant later underwent colostomy reversal and gallbladder removal surgery. He had permanent blindness. Due to surgery, his abdomen consisted of mesh and contained no muscle where the injury occurred. He sustained fractures to his lumbar spine and low-back pain that radiated down his left side into the left hip. He took hydrocodone for the pain and medication for anxiety, depression, and posttraumatic stress.

The claimant testified the accident caused a career-ending injury. He explained that with the full mesh from his abdomen all the way down — “and then the blindness on top of it” — he could not work in the coal mine again. 2024 IL App (5th) 230185WC at ¶10.

Based on the parties’ stipulations, the arbitrator awarded statutory permanent total disability (PTD) benefits of $1,008.40 per week for life, pursuant to §8(e)(18) of the Workers’ Compensation Act, 820 ILCS 305/1, et seq., for the 100-percent loss to the eyes. 2024 IL App (5th) 230815WC at ¶11. The arbitrator awarded permanent partial disability (PPD) benefits of $775.18 per week for 21 weeks pursuant to §8(d)(2) of the Act, 820 ILCS 305/8(d)(2), for the transverse fractures at L1, L2, L3, L4, and L5, and a spinous process fracture at L4. Id. In addition, the arbitrator awarded 300 weeks representing a 60-percent loss to the person as a whole pursuant to §8(d)(2) for injuries to the spine, hip, abdomen, and head (psychological injuries). Id.

The arbitrator relied on Beelman Trucking, supra, in support of the awards pursuant to §§8(e)(18) and 8(d)(2) for the unscheduled losses to the spine, hip, abdomen, and head. The arbitrator reasoned that denying compensation beyond the two members compensable under §8(e)(18) would leave the claimant uncompensated for further losses that could impact his earning capacity. In Beelman Trucking, the Supreme Court permitted recovery under §8(e)(18) for the loss of both legs and §8(e)(10) for scheduled loss to the claimant’s arms. In American Coal, “The arbitrator determined that awarding claimant benefits under section 8(d)(2) for injuries to his spine, hip, abdomen, and head — while concurrently awarding claimant benefits under section 8(e)(18) for the loss of use of both eyes — did not result in double recovery, as contemplated by the Illinois Supreme Court in Beelman Trucking, where the ‘statutory permanent total disability falls far short of addressing the full scope of [claimant’s] injuries from this accident.’ ” 2024 IL App (5th) 230815WC at ¶12.

The employer appealed the Commission’s decision affirming the arbitrator and the circuit court’s decision confirming the decision. The employer argued the Commission erred in awarding PPD benefits for nonscheduled body parts under §8(d)(2) in addition to the PTD benefits under §8(e)(18). The employer argued that the Supreme Court in Beelman Trucking held the Act permits recovery for the loss of two members under §8(e)(18) and for any additional scheduled losses but not for nonscheduled losses.

The court’s analysis began with a review of §8(e), which contains subsections that fix compensation for a particular body part, and §8(e)(18), which provides for specific combinations of losses for injuries that constitute a “total and permanent” disability. Section 8(e)(18) provides: “These specific cases of total and permanent disability do not exclude other cases.” 820 ILCS 305/8(e)(18).

The court next reviewed §8(d)(2), which provides for “that percentage of 500 weeks that the partial disability resulting from the injuries covered by this paragraph bears to total disability” for injuries not covered by subparagraphs (c) and (e) of §8, or for injuries covered by those paragraphs when the employee has sustained other additional injuries that do not incapacitate from pursuing the duties of the employment but that would disable the employee from pursuing other suitable occupations or resulted in physical impairment; or if the injuries partially incapacitate the employee from pursuing the duties of the usual and customary line of employment but do not cause an impairment of earning capacity. 2024 IL App (5th) 230815WC at ¶19.

The court disagreed with the employer’s argument that the legislature’s failure to include language in §8(e)(18) allowing for awards of both PTD and nonscheduled PPD under §8(d)(2) indicated its intent to limit additional compensation under §8(e)(18) to scheduled body parts only. The opinion makes clear that the Supreme Court in Beelman Trucking determined that the language in §8(e)(18) “does not exclude other cases” allowed for other §8(e) scheduled losses resulting from a single accidental injury. The Supreme Court determined that the legislature intended the word “ ‘case’ to have its commonly accepted and popular meaning, that of a synonym to ‘instance’ or ‘example.’ ” 2024 IL App (5th) 230815WC at ¶22, quoting Beelman Trucking, supra, 909 N.E.2d at 825. The court in Beelman Trucking determined that “section 8(e)(18) does not exclude other cases of loss.” Id.

In addition to Beelman Trucking, the opinion relied on Freeman United Coal Mining Co. v. Industrial Commission, 99 Ill.2d 487, 459 N.E.2d 1368, 77 Ill.Dec. 119 (1994), in which different losses were compensable because they affected the workers’ earning capacity. The employee in Freeman United received benefits pursuant to §8(e)(18), returned to work, and was awarded temporary total disability benefits due to a subsequent accident. The court in Freeman United determined that the words “total” and “permanent” in §8(e)(18) did not reflect actual loss of wages or actual permanent and total disability but stated the legislature’s intent that the specific injuries would be compensated at a fixed figure.

The American Coal opinion points out that the Supreme Court in Beelman Trucking determined compensation permissible for “other cases of loss in the same accident [which] result in ‘increased actual disability.’ ” 2024 IL App (5th) 230815WC at ¶23, quoting Beelman Trucking, 909 N.E.2d at 826. In this case, the court recognized that the Supreme Court did not address concurrent awards of §8(e)(18) benefits and §8(d)(2) nonscheduled losses in Beelman Trucking or Freeman United. However, the court stated it could not conclude the Supreme Court’s rationale in those cases would not apply to the nonscheduled losses in this case. In addition to the loss of both eyes, the claimant suffered additional permanent injuries pursuant to §8(d)(2) from the same accident that partially incapacitated him from working in the coal mine. These nonscheduled injuries further impaired his earning capacity, resulting in an increased disability.

For more information about workers’ compensation, see WORKERS’ COMPENSATION PRACTICE (IICLE®, 2023). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.

Joseph P. Basile

Joseph P. Basile, Chicago, concentrates his practice in workers’ compensation and civil litigation. He is a chair-qualified arbitrator for the Circuit Court of Cook County Mandatory Arbitration Program, has been a faculty member at annual IICLE® workers’ compensation seminars, and is the author of the monthly workers’ compensation column for IICLE®’s FLASHPOINTS™. He is a member of the Chicago and Illinois State Bar Associations. Mr. Basile received his B.S. from St. Louis University and his J.D. with distinction from the University of Illinois Chicago School of Law, where he was a member of The John Marshall Law Review.

Joseph P. Basile of Chicago is our FLASHPOINTS™ Author Spotlight focus this month, having been a long-time contributor to the Workers’ Compensation FLASHPOINTS™.

“I attended IICLE® seminars and found them to be excellent,” Basile says. “[T]he annual Workers’ Compensation seminars provide those who attend presentations by the finest judges, commissioners, arbitrators, and attorneys on all areas of workers’ compensation law and its relationship to other areas of the law.” For Basile, both the Institute’s publications and seminars “are excellent sources of continuing legal education in all practice areas, allowing those who utilize them greater opportunities to fully represent their clients.”

When he was asked to write for the Workers’ Compensation FLASHPOINTS™, he “decided this would be an opportunity to provide for the legal profession,” regularly reporting on recent developments in Illinois workers’ compensation caselaw to practitioners all over the state. He has found other outlets through IICLE® by which he provides for his fellow practitioners, having contributed to LABOR AND EMPLOYMENT ISSUES IN TRANSACTIONS, BUSINESS RESTRUCTURING, AND WORKFORCE REDUCTIONS (IICLE®, 2022), as well as WORKERS’ COMPENSATION PRACTICE (IICLE®, 2023). Basile encourages other attorneys to volunteer with the Institute: “It is a wonderful experience and one that will greatly improve your legal abilities.”

Basile concentrates his practice in workers’ compensation and civil litigation. He is a chair-qualified arbitrator for the Circuit Court of Cook County Mandatory Arbitration Program and a member of the Chicago and Illinois State Bar Associations. Mr. Basile received his B.S. from St. Louis University and his J.D. with distinction from The John Marshall Law School (now the UIC School of Law), where he was a member of The John Marshall Law Review.