Ridenour v. Carl Sandburg Village No. 7 Condominium Association ( 2010 )

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
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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of the lawsuit, so they were withdrawn as plaintiffs from the case.
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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
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