Buffalo Grove Venture LLC v. 400 McHenry Road, LLC ( 2020 )

2020 IL App (2d) 190923-UNo. 2-19-0923
Order filed June 30, 2020
NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as
precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
BUFFALO GROVE VENTURE LLC, ) Appeal from the Circuit Court
) of Lake County.
Plaintiff-Appellee, )
)
v. ) No. 15-CH-763
)
400 McHENRY ROAD, LLC, ) Honorable
) Daniel L. Jasica,
Defendant-Appellant. ) Judge, Presiding.
______________________________________________________________________________
JUSTICE ZENOFF delivered the judgment of the court.
Presiding Justice Birkett and Justice Brennan concurred in the judgment.
ORDER
¶1 Held: The trial court properly granted summary judgment in favor of the plaintiff where
the covenants concerning an easement ran with the land and bound all subsequent
owners.
¶2 Defendant, 400 McHenry Road, LLC, appeals an order of the circuit court of Lake County
granting summary judgment in favor of plaintiff, Buffalo Grove Venture LLC. We affirm.
¶3 I. BACKGROUND
¶4 A. The Controversy
2020 IL App (2d) 190923-U¶5 The parties own adjacent commercial properties in the Village of Buffalo Grove.
Defendant’s parcel is landlocked except for a driveway easement, called the Entrance Magazine,
which crosses plaintiff’s property to Route 83. From January 2007, when defendant acquired its
property, until 2012, defendant paid a yearly fee to plaintiff for the use of the Entrance Magazine.
Then, in 2012, defendant stopped paying the fee.
¶6 B. The 1991 Covenants, Conditions, and Restrictions Agreement
¶7 Plaintiff’s property is part of what was once a larger tract owned by Buffalo Grove Joint
Venture (Joint Venture). 1 The Joint Venture, together with Buffalo Grove Town Center
Partnership (Partnership), developed a shopping mall on properties including what is now
plaintiff’s property. Michael Reese Health Plan, Inc. (Michael Reese) owned what is now
defendant’s parcel. Michael Reese purchased its parcel from the Partnership for the purpose of
developing it. Because the Joint Venture and the Partnership were developing the mall, they
desired to control Michael Reese’s development of its property. To that end, on February 19, 1991,
the Joint Venture, the Partnership, and Michael Reese entered into a Covenants, Conditions, and
Restrictions Agreement (CCR) affecting Michael Reese’s parcel. That agreement provided, in
pertinent part, as follows.
¶8 1. Maintenance of the Entrance Magazine
¶9 The Joint Venture granted Michael Reese and its “invitees, successors, and assigns” a
nonexclusive permanent access easement “over and across” the Entrance Magazine. 2 Paragraph 4
1
There is no corporate relationship between plaintiff and Buffalo Grove Joint Venture.
2
A 1988 plat of subdivision shows the Entrance Magazine. Defendant’s deed notes that
the CCR granted an easement in favor of Michael Reese’s parcel.
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2020 IL App (2d) 190923-Uof the CCR required Michael Reese to pay the Joint Venture $1800 annually for the use of the
Entrance Magazine, commencing on the date that Michael Reese completed construction. That fee
was to be increased 5% every year thereafter. In consideration, the Joint Venture was required to
maintain the Entrance Magazine in a well-lighted, clean, and safe condition, reasonably free of
debris, ice, snow, and other hazards. If the Joint Venture failed to so maintain the Entrance
Magazine, Michael Reese could undertake the repairs itself upon 30 days’ written notice to the
Joint Venture.
¶ 10 2. Covenants to Run with the Land
¶ 11 Paragraph 11 of the CCR was titled “Covenants To Run With Land.” It provided that
“[e]ach and all of the covenants, restrictions, conditions, and provisions contained in this [CCR]
*** will constitute covenants running with the land.” This paragraph further provided that the
covenants would bind “every owner” of a portion of the Michael Reese and the Joint Venture
properties and would inure to the benefit of the parties and their respective “successors and
assigns.”
¶ 12 Paragraph 11 then specifically addressed the Entrance Magazine. It provided that the
covenants, restrictions, conditions and provisions contained in Paragraph 4 of the CCR “will
constitute covenants running with the land,” will bind “every owner” of a portion of the Michael
Reese and the Joint Venture properties, and will inure to the benefit of the parties and their
respective “successors and assigns.”
¶ 13 3. Remedies
¶ 14 Paragraph 16 of the CCR was titled “Remedies.” It provided that, if Michael Reese
breached any of the covenants, the “Developer” could sue in law or equity, including foreclosing
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2020 IL App (2d) 190923-Ua lien against the Michael Reese parcel. “Developer” was designated in the CCR as the Partnership
and the Joint Venture.
¶ 15 C. Procedural History of the Present Litigation
¶ 16 1. Pleadings
¶ 17 a. Plaintiff’s Complaint
¶ 18 On March 4, 2015, plaintiff recorded a lien against defendant’s property for defendant’s
unpaid fees for the use of the Entrance Magazine. 3 Then, on April 20, 2015, plaintiff filed suit to
foreclose the lien and for breach of contract. On September 1, 2016, plaintiff filed its four-count
second amended complaint. Count I alleged breach of contract, count II sought to foreclose the
lien, and count III alleged unjust enrichment as an alternative to count I. Count IV concerned a
covenant of the CCR that is not pertinent to this appeal.
¶ 19 b. Defendant’s Answer to the Second Amended Complaint
¶ 20 Defendant answered the second amended complaint, filed affirmative defenses, and filed a
counterclaim. In its answer, defendant admitted that the CCR required the Joint Venture’s
successors, i.e. plaintiff, to maintain the Entrance Magazine, but it denied that it had any obligation
under the CCR to pay the use fee. Defendant also admitted that the covenant in the CCR requiring
the Joint Venture to maintain the Entrance Magazine runs with the land.
¶ 21 c. Defendant’s Amended Affirmative Defenses
3
The claim for lien also included unpaid fees for use of something called the Ring Road.
Pursuant to Paragraph 4 of the CCR, Michael Reese owed fees to the Partnership for the use of the
Ring Road. On April 7, 2017, plaintiff filed an amended claim for lien omitting a claim for the
Ring Road. The Ring Road is not part of this appeal.
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2020 IL App (2d) 190923-U¶ 22 For its amended affirmative defenses, defendant claimed that plaintiff lacked standing to
assert any rights under the CCR because (1) it was not the developer, as defined in the CCR, and
(2) the Entrance Magazine consists of land dedicated to public use. Defendant also alleged that
plaintiff was guilty of unclean hands in that plaintiff wrongly collected fees for defendant’s use of
the Entrance Magazine and made false statements in its claims for lien. The court dismissed the
unclean-hands affirmative defense.
¶ 23 d. Defendant’s Second Amended Counterclaim
¶ 24 In its seven-count second amended counterclaim (counterclaim), defendant generally
alleged the following. The easement across the Entrance Magazine was created by a recorded plat
of subdivision in 1988, not the CCR. Michael Reese was obligated to pay the use fee for the
Entrance Magazine solely during the development of the Michael Reese, Partnership, and Joint
Venture properties. The parties to the CCR no longer exist, and the CCR terminated by operation
of law. Therefore, defendant concluded, plaintiff had no right or standing to collect a fee for the
use of the Entrance Magazine, or to pursue any remedies for defendant’s failure to pay the fee.
¶ 25 Count I of the counterclaim alleged slander of title in recording the lien against defendant’s
property. Count II alleged slander of title in recording an amended lien against defendant’s
property. Count III stated a cause of action to quiet title. Count IV alleged fraud in connection with
plaintiff’s collection of the fee for defendant’s use of the Entrance Magazine. Count V alleged that
plaintiff was unjustly enriched. Count VI asked for a declaration that plaintiff’s interpretation of
the CCR was “absurd, unconscionable, and incorrect.” Count VII prayed for a declaration that
plaintiff has no standing to enforce the CCR.
¶ 26 2. The Parties’ Cross-Motions for Summary Judgment
¶ 27 a. Defendant’s Motion for Partial Summary Judgment
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2020 IL App (2d) 190923-U¶ 28 On October 1, 2018, defendant filed a motion for partial summary judgment as to count I
(breach of contract) of plaintiff’s second amended complaint. Defendant first argued that plaintiff
lacked standing to enforce the CCR because that authority could be exercised only by the
“Developer,” as defined in the CCR. According to defendant, the developer was the Joint Venture
and the Partnership acting jointly.
¶ 29 Next, defendant argued that plaintiff was not a “successor in interest” to the Joint Venture,
but that it was merely a subsequent owner of part of the Joint Venture property. As such, defendant
argued, plaintiff was not a “successor or assign” within the meaning of the CCR. Lastly, defendant
argued that the declaration in Paragraph 4 of the CCR that the Entrance Magazine covenants ran
with the land conflicted with the parties’ true intention that it bind only Michael Reese.
¶ 30 b. Plaintiff’s Motion for Summary Judgment
¶ 31 On October 1, 2018, plaintiff filed its cross-motion for summary judgment as to its breach
of contract and lien foreclosure claims and the entirety of defendant’s counterclaim. First, plaintiff
argued that, as the successor in title to the Joint Venture, it was entitled to enforce the CCR against
defendant, which was the successor in title to Michael Reese. Plaintiff asserted that, pursuant to
Paragraph 11 of the CCR, the covenants relating to the Entrance Magazine ran with the land and
bound all subsequent purchasers. Next, plaintiff contended that defendant waived any argument
that plaintiff failed to maintain the Entrance Magazine, both in its answer to the second amended
complaint and by failing to file a 30-day notice in accordance with the CCR. In any event, plaintiff
argued, its performance was irrelevant to defendant’s obligation to pay the annual fee for using the
Entrance Magazine. Finally, plaintiff asserted that it was damaged in the amount of $40,829, which
represented the unpaid use fees.
¶ 32 3. The Trial Court’s Grant of Summary Judgment to Plaintiff
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2020 IL App (2d) 190923-U¶ 33 On April 11, 2019, the court issued its written ruling on the cross-motions for summary
judgment. The court found that plaintiff was the successor in title to the Joint Venture and that
defendant’s own verified pleadings and statement of facts in support of its motion for partial
summary judgment admitted such.
¶ 34 Next, the court construed the CCR. The court found that the CCR “created or reaffirmed”
a perpetual access easement over what is now plaintiff’s parcel for the benefit of what is now
defendant’s parcel. The court found that this easement runs with the land, survived the
development of the properties, and is binding on all successors in title to the Joint Venture and
Michael Reese properties.
¶ 35 With respect to defendant’s argument that the “Developer” could be only the Joint Venture
and the Partnership acting jointly, the court found that such reference in the CCR was for
convenience. The court found that plaintiff, as the successor in title to the Joint Venture, could
pursue its remedies individually.
¶ 36 Next, the court found that the obligation of the Michael Reese parcel to pay the use fee for
the Entrance Magazine was a covenant that ran with the land and bound defendant.
¶ 37 Lastly, the court granted judgment in plaintiff’s favor on defendant’s counterclaim and
entered judgment in plaintiff’s favor in the amount of $40,829.
¶ 38 4. Postjudgment Motions
¶ 39 Plaintiff filed a petition for attorney fees pursuant to a fee shifting provision in the CCR.
Defendant filed a timely motion for reconsideration. On August 26, 2019, the court granted the
motion for reconsideration in part by reducing the judgment to $39,906.27. The court denied the
remainder of the motion to reconsider. On September 25, 2019, the court entered a written finding
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2020 IL App (2d) 190923-Upursuant to Illinois Supreme Court Rule 304(a) (eff. Mar. 8, 2016), and defendant filed a timely
notice of appeal.
¶ 40 II. ANALYSIS
¶ 41 Defendant contends that the court improperly granted plaintiff’s motion for summary
judgment. Summary judgment is appropriate where the pleadings, depositions, and admissions on
file, together with any affidavits, viewed in the light most favorable to the nonmovant, show that
no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of
law. Smith v. Bhattacharya, 2014 IL App (2d) 130891, ¶ 12. Summary judgment is a drastic
measure, which should be granted only when the moving party’s right to judgment is clear and
free from doubt. Smith, 2014 IL App (2d) 130891, ¶ 12. We review the grant of summary judgment
de novo. Smith, 2014 IL App (2d) 130891, ¶ 12.
¶ 42 At issue is the interpretation of the CCR. The primary purpose of contract interpretation is
to give effect to the intent of the parties. Salce v. Saracco, 409 Ill. App. 3d 977, 981 (2011). To
determine that intent, the court considers the whole document, rather than focus on isolated
portions thereof. Salce, 409 Ill. App. 3d at 981. If contract language is clear and unambiguous, the
intent of the parties must be determined solely from the language of the contract itself and given
its plain and ordinary meaning. Storino, Ramello, & Durkin v. Rackow, 2015 IL App (1st) 142961,
¶ 18.
¶ 43 Preliminarily, defendant asks us to strike plaintiff’s statement of facts as argumentative.
Defendant asserts that plaintiff improperly stated conclusions of law as “facts.” Illinois Supreme
Court Rule 341(i) (eff. May 25, 2018), provides, inter alia, that an appellee’s brief need not include
a statement of facts except to the extent that the appellant’s presentation is deemed unsatisfactory.
Koplin v. Hinsdale Hospital, 207 Ill. App. 3d 219, 223 (1990). However, any party’s statement of
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2020 IL App (2d) 190923-Ufacts must be stated accurately and fairly without argument or comment. Koplin, 207 Ill. App. 3d
at 223. We decline to strike plaintiff’s statement of facts. We will, instead, ignore any portions that
violate Rule 341. See Gauger v. Hendle, 2011 IL App (2d) 100316, ¶ 95 (appellate court will not
strike a statement of facts where the violations do not hinder review but will ignore the offending
portions).
¶ 44 We turn now to the parties’ contentions. Defendant first argues that the CCR does not
apply, because (1) the CCR applied only to the original parties to that agreement and their
“successors and assigns,” (2) plaintiff is not a “successor or assign” of the Joint Venture, and (3)
the covenants in the CCR ran with the land only insofar as they benefited the original parties and
their successors and assigns. Defendant’s first two points are grounded on the faulty premise that
the trial court found plaintiff to be a “successor in interest” to the Joint Venture. It did not. The
court termed plaintiff a “successor in title” to the Joint Venture, meaning, as the record shows and
defendant admitted, that plaintiff is a subsequent owner of part of the tract once owned by the Joint
Venture. Specifically, plaintiff’s property includes the Entrance Magazine. Consequently,
defendant’s lengthy discussion of, and citation of cases pertaining to, successors in interest is
misplaced. The court found in plaintiff’s favor on the basis that the covenants run with the land
and bind all subsequent owners, and this is the proper inquiry.
¶ 45 A. Whether the Covenants Run with the Land
¶ 46 Covenants must be interpreted to give effect to the actual intent of the parties at the time
the covenant was made. Streams Sports Club, Ltd. v. Richmond, 99 Ill. 2d 182, 188 (1983). The
intent of the parties can best be determined from the express contractual provisions. Richmond, 99
Ill. 2d at 188. Defendant asserts that the CCR was a construction agreement in which the parties
intended to bind only themselves and their “successors and assigns” until the completion of the
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2020 IL App (2d) 190923-Udevelopment of the Michael Reese parcel. Once that was accomplished, defendant argues, the CCR
and all its covenants ceased to exist. Of course, this interpretation leaves defendant landlocked.
Consequently, defendant argues that a 1988 plat of subdivision, apart from the CCR, granted the
public permanent access over the Entrance Magazine.
¶ 47 For a covenant to run with the land, three conditions must be met: (1) the parties must have
intended the covenant to run with the land, (2) the covenant must touch and concern the land, and
(3) there must be privity of estate between the party claiming the benefit of the covenant and the
party resting under the burden of the covenant. Nassau Terrace Condominium Ass’n., Inc. v.
Silverstein, 182 Ill. App. 3d 221, 224 (1989). Covenants that run with the land inhere in the land
and bind subsequent purchasers indefinitely. Board of Managers of Hidden Lake Townhome
Owners Ass’n. v. Green Trails Improve Ass’n., 404 Ill. App. 3d 184, 191 (2010); SI Securities v.
Bank of Edwardsville, 362 Ill. App. 3d 925, 931 (2005). Any deed that conveys the land conveys
the covenants that run with the land. Brady v. Spurck, 27 Ill. 478, 482 (1861).
¶ 48 We first examine the CCR to ascertain the intent of the parties. In an unnumbered
paragraph, the Joint Venture conveyed a “permanent, non-exclusive access easement” in favor of
the Michael Reese property over the Joint Venture property (Entrance Magazine) to allow access
to Route 83. This document noted that the easement was designated on the plat of subdivision that
was recorded in 1988.
¶ 49 Paragraph 4 of the CCR pertained to the maintenance of the Entrance Magazine and
provided that the Michael Reese property would pay to the Joint Venture $1800 per year
commencing “on the date [Michael Reese] completes construction.” Thereafter, the fee would
increase 5% “upon each anniversary of the closing date.”
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2020 IL App (2d) 190923-U¶ 50 Paragraph 11 provided that all of the covenants, restrictions, and conditions in the CCR (1)
were made for the benefit of the Michael Reese and Joint Venture parcels and “each and every
portion thereof” and “will constitute covenants running with the land,” (2) “will bind every owner”
of the Michael Reese and Joint Venture parcels, and (3) “will inure to the benefit of the parties and
their respective successors and assigns.”
¶ 51 Paragraph 11 then separately addressed the covenants as they related to the Partnership:
“The covenants, restrictions, conditions, and provisions contained in Paragraph 4 (Maintenance of
Ring Road and Entrance Magazine) *** (1) are made” for the “direct and mutual benefit” of the
Michael Reese and the Partnership parcels, (2) constitute covenants running with the land, and (3)
inure to the benefit of the parties and their respective successors and assigns. Paragraph 11 then
provided that all other covenants contained in the CCR were personal to the Partnership.
¶ 52 To summarize: the plain language of the CCR provided that, as to the Joint Venture, all of
the covenants and restrictions contained therein ran with the land, but, as to the Partnership, only
those covenants contained in Paragraph 4 ran with the land.
¶ 53 We determine that, as to the Entrance Magazine, the CCR meets the three conditions for
creating covenants that run with the land. First, the parties intended the covenants to run with the
land. They clearly expressed that intent in Paragraph 11, where they provided that the covenants
would run with the land and bind all subsequent owners of any portion of the Joint Venture and
Michael Reese properties. The parties provided that the covenants would bind both subsequent
owners and the parties’ successors and assigns. Thus, defendant’s conclusion that the CCR bound
only successors and assigns is erroneous.
¶ 54 The parties also clearly intended that the covenants pertaining to the Entrance Magazine
would survive Michael Reese’s development of its property. In the preamble to the CCR, the
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2020 IL App (2d) 190923-Uparties contemplated that Michael Reese would “convey, lease, or otherwise transfer (subject to
terms and conditions hereinafter set forth) all or certain of the Parcel to other persons or entities.”
The CCR provided that the $1800 fee for the use of the Magazine Entrance did not commence
until that development was completed; thereafter, the 5% increase was to be assessed on each
anniversary of the closing date.
¶ 55 That the covenants pertaining to the Entrance Magazine survived Michael Reese’s
development is in keeping with the general proposition that covenants creating easements will run
with the land. See Parrish v. City of Carbondale, 61 Ill. App. 3d 500, 504 (1978) (generally,
covenants creating easements will run with the land and bind subsequent owners). Further, the
1988 plat of subdivision does not negate the CCR. Exhibit A to defendant’s deed recites that the
CCR granted the easement.
¶ 56 If defendant’s point is that the plat showed that access to the Entrance Magazine was
nonexclusive, that was clear in the Joint Venture’s grant to Michael Reese of a permanent “non-
exclusive access easement.” Nevertheless, Michael Reese agreed to pay the use fee. Defendant
does not argue that this provision was substantively unconscionable, that is, that it was one-sided
or overly harsh. See Bishop v. We Care Hair Development Corp., 316 Ill. App. 3d 1182, 1196
(2000) (unconscionability relates to situations where a contract clause is allegedly one-sided or
overly harsh). Indeed, at page 35 of its opening brief, defendant declares: “400 McHenry is not
suggesting that the 1991 [CCR] was unconscionable.” At page 10 of defendant’s reply brief, it
reiterates that the “[t]he 1991 [CCR] is not unconscionable.” 4
4
The record shows that the landscape changed in the years after the CCR agreement was
signed. Considerable development took place surrounding the Michael Reese parcel, including the
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2020 IL App (2d) 190923-U¶ 57 Second, the covenants touched and concerned the land. The test whether a covenant runs
with the land or is merely personal is whether it concerns the thing granted and the occupation and
enjoyment of it. Parrish, 61 Ill. App. 3d at 504. Here, Exhibit B to defendant’s deed notes that “no
direct access” to Route 83 is permitted. Thus, the only access from defendant’s parcel to Route 83
is over the Entrance Magazine on plaintiff’s property. Clearly, the covenants pertaining to the
maintenance of the Entrance Magazine concern the easement and enjoyment of it granted by the
CCR.
¶ 58 Third, defendant does not dispute that there is privity of estate. Defendant’s property was
part of the “Mall Property” that was conveyed to Michael Reese by the Partnership.
¶ 59 Indeed, defendant agrees that the covenants run with the land, but it argues that the parties
to the CCR limited those covenants to bind only their successors and assigns. This is erroneous as
a matter of law. It is “well settled” that covenants that run with the land inhere in the land and bind
subsequent purchasers. SI Securities, 362 Ill. App. 3d at 931.
“If the owner of a land enters into a covenant concerning the land—concerning its
use—subjecting it to easements or personal servitudes and the like, and the land is
afterwards conveyed or sold to one who has actual or constructive notice of the covenant,
the grantee or purchaser will take the premises bound by the covenant.” Willoughby v.
Lawrence, 116 Ill. 11, 22 (1886).
¶ 60 Defendant seemingly argues that parties cannot contractually provide that covenants
running with the land will bind subsequent purchasers because perpetual contracts are prohibited.
addition of a fast food restaurant, a supermarket, and a condominium, all of which were served by
the Entrance Magazine with no charge.
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2020 IL App (2d) 190923-UDefendant cites Jespersen v. Minnesota Mining & Manufacturing Co., 183 Ill. 2d 290 (1998), and
Rico Industries, Inc. v. TLC Group, Inc., 2014 IL App (1st) 131522, neither of which supports
defendant’s proposition. Rather, both cases involved sales distribution contracts of indefinite
duration. In Jespersen, our supreme court held that, where parties fail to agree on a contract’s
duration, the contract is terminable at will. Jespersen, 183 Ill. 2d at 295. In Rico, the plaintiff
sought a declaration that a sales representative agreement was terminable at will where the
agreement stated that it was terminable only upon the written agreement of both parties. Rico, 2014
IL App (1st) 131522, ¶ 1.
¶ 61 Both of those cases are far, far afield from the present case. Defendant cites no case that
holds that covenants running with the land, which also inure to the benefit of “successors and
assigns,” are temporally limited to those entities. Nor are we persuaded by defendant’s argument
that plaintiff is not bound by the CCR because plaintiff does not own the whole Joint Venture tract
but only a portion of it. Significantly, plaintiff owns the Entrance Magazine.
¶ 62 B. Whether Plaintiff Can Enforce the CCR
¶ 63 Defendant contends that only the “Developer” had the right to enforce the CCR. In the first
paragraph of the CCR, the Joint Venture and the Partnership were individually identified as parties
to the agreement and then were identified “collectively” as the “Developer.” Throughout the
document, when speaking of them individually, they were referred to as the “Joint Venture” or
“the Partnership.” Specifically, Paragraph 4 of the CCR provided that Michael Reese owed a fee
to the Joint Venture for the use of the Entrance Magazine, and that the Joint Venture had the duty
to maintain the easement. This made sense because the easement was on the Joint Venture’s
property. However, Paragraph 16 of the CCR provided that the “Developer” “shall have all rights
and remedies to enforce [collection or performance under this agreement].” In its ruling, the court
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2020 IL App (2d) 190923-Ufound that wherever the term “Developer” appeared in the CCR, it was appropriate to replace it
with “the Partnership and the Joint Venture.” In other words, the court found that the term
“Developer” was used simply for ease of reference. Therefore, the court concluded that the CCR
gave each entity the right to pursue its remedies individually.
¶ 64 Defendant argues that the CCR styled the Joint Venture and the Partnership as the
“Developer,” meaning that both entities had to enforce the agreement. Because the Partnership no
longer exists, defendant asserts that plaintiff cannot enforce the agreement. We disagree. Pursuant
to Paragraph 4 of the CCR, Michael Reese owed the fee for the use of the Entrance Magazine only
to the Joint Venture. It follows that the Joint Venture alone would have standing to collect the debt.
Michael Reese’s nonpayment would not injure the Partnership, because the debt was not owed to
the Partnership. Thus, the Partnership could not assert the Joint Venture’s legal rights. See In re
Marriage of Hopwood, 378 Ill. App. 3d 746, 751 (2008) (a plaintiff must assert its own legal rights
and interests rather than basing its claim upon the rights of third parties). 5
¶ 65 Defendant further argues that the CCR ceased to exist upon the completion of the
development of the Michael Reese parcel. Thus, defendant argues, plaintiff is not authorized to
collect fees for the use of the Entrance Magazine. We have already determined that the covenants
pertaining to the Entrance Magazine run with the land and bind all subsequent owners.
Consequently, we reject this argument. Further, as noted, the parties provided that the fee for the
use of the Entrance Magazine would not commence until Michael Reese completed its
5
Indeed, defendant successfully argued before the trial court that the Joint Venture could
not collect the fee due the Partnership for the use of the Ring Road.
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2020 IL App (2d) 190923-Udevelopment, and that the 5% increase would incur thereafter on each anniversary of the closing
date. Clearly, those events were to happen after the completion of Michael Reese’s development.
¶ 66 C. The Trial Court’s Interpretation of the CCR
¶ 67 Defendant asserts that the court’s interpretation of the CCR leads to an absurd result.
Specifically, defendant contends that the 5% annual increase bears no relation to any actual costs
for the maintenance of the Entrance Magazine. Had the parties to the CCR intended to provide for
future maintenance costs, defendant argues, they would have included a formula for the calculation
of such costs. This argument ignores that the 5% increase is such a formula, which was agreed to
by the parties. The CCR was signed in 1991. The parties could not have projected exact
maintenance costs into the next millennium and beyond.
¶ 68 D. Whether Summary Judgment on Defendant’s Counterclaim Was Proper
¶ 69 Defendant argues that the court improperly granted summary judgment as to its
counterclaim. The court found that its grant of summary judgment to plaintiff on its second
amended complaint dictated that plaintiff be granted summary judgment on count I (slander of title
for recording the original lien), count II (slander of title for recording the amended lien), count III
(quiet title), count VI (declaration that the CCR was unconscionable), and count VII (declaration
that plaintiff has no standing to enforce the CRR) of defendant’s counterclaim. As we have already
determined those issues in plaintiff’s favor, we agree with the trial court’s decision.
¶ 70 Defendant additionally argues that the court inappropriately granted summary judgment on
count IV (fraud) and count V (unjust enrichment) of the counterclaim.
¶ 71 1. Count IV—Fraud
¶ 72 Defendant’s fraud count was based on its theory that plaintiff had no right to collect a fee
for the use of the Entrance Magazine. Defendant alleged that plaintiff, through its property
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2020 IL App (2d) 190923-Umanagers, falsely misrepresented that fee as a “common area maintenance fee” and falsely
misrepresented that the CCR gave plaintiff the authority to collect the fee. Defendant further
alleged that plaintiff did not collect a fee from any other users of the Entrance Magazine, nor did
it maintain the Entrance Magazine. Defendant alleged that it was damaged in the amount of
$35,563.94.
¶ 73 The elements of common law fraud are (1) a knowingly false statement of material fact,
(2) the party to whom the statement was made had the right to rely on it and did so, (3) the statement
was made to induce the other party to act, and (4) reliance by the party to whom the statement was
made led to his injury. Zimmerman v. Northfield Real Estate, Inc., 156 Ill. App. 3d 154, 161 (1986).
The trial court found that plaintiff did not justifiably rely on plaintiff’s representations, because it
was in possession of the CCR and had the means to obtain the knowledge that the charges were
not authorized.
¶ 74 Defendant concedes that it determined that the CCR did not apply, but, nevertheless, argues
that there is a fact question as to whether it justifiably relied on plaintiff’s misrepresentations
because plaintiff’s invoices were “confusing” and plaintiff refused to provide explanations. If
defendant determined that the CCR did not give plaintiff authority to collect a fee for the use of
the Entrance Magazine, the confusing nature of the invoices is immaterial. Defendant, according
to its own admission, determined that plaintiff was not entitled to any payment, regardless of the
state of the invoices. Accordingly, defendant failed to raise a genuine issue of material fact
concerning its justifiable reliance, and the trial court properly granted summary judgment on the
fraud count.
¶ 75 2. Count V—Unjust Enrichment
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2020 IL App (2d) 190923-U¶ 76 Defendant alleged that plaintiff’s retention of the fees that it collected for the use of the
Entrance Magazine constituted unjust enrichment. Unjust enrichment is an equitable remedy based
on a contract implied in law. Nesby v. Country Mutual Insurance Co., 346 Ill. App. 3d 564, 566
(2004). As an equitable remedy, unjust enrichment is available only when there is no adequate
remedy at law. Nesby, 346 Ill. App. 3d at 567. The doctrine of unjust enrichment has no application
where a specific contract governs the parties’ relationship. Nesby, 346 Ill. App. 3d at 567.
¶ 77 The trial court found that this cause of action failed because defendant voluntarily made
payments under the CCR even though it had determined that the CCR did not apply. The court
also found that the CCR governed the parties’ relationship and provided a remedy. Defendant
argues that it established fraud, which is an exception to the voluntary payment doctrine, and that
the CCR does not govern the parties’ relationship.
¶ 78 We have already determined that the CCR governs the parties. Therefore, the doctrine of
unjust enrichment does not apply. Moreover, pursuant to Paragraph 4 of the CCR, defendant’s
remedy for plaintiff’s alleged failure to maintain the Entrance Magazine was to give plaintiff 30
days’ notice and then make the necessary repairs itself. Accordingly, for the above stated reasons,
we hold that the trial court properly granted summary judgment in plaintiff’s favor.
¶ 79 III. CONCLUSION
¶ 80 The judgment of the circuit court of Lake County is affirmed.
¶ 81 Affirmed.
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