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Henderson Square Condo. Ass’n v. LAB Townhomes, LLC

Illinois Supreme Court , Case No. 2015 IL 118139

Opinion Nov. 4, 2015 – Rehearing Denied Jan. 28, 2016

This case stems from the ill-fated Lincoln-Belmont-Ashland Redevelopment project featured on our Blog before. When a Condominium Association sued the developers based on failure to reveal construction defects, the Courts weighed in on whether the claims were time-barred. Untimely, the Appellate and Supreme Court broke with the Trial Court and found that a question of fact remained as to what the Plaintiff Condominium Association knew – or should have known – and when. Only after answering that question, the Court decided, could it be determined if certain claims were time barred.

Factual Background

In 2006 Defendants developed and sold unites pursuant to a contract with the City of Chicago for the mixed use Lincoln-Belmont-Ashland Redevelopment project. In 2011 Henderson Square Condominium Association sued the developers of the community, alleging: breach of implied warranty of habitability, fraud, negligence, breach of the prohibition in the Chicago Municipal Code as to the misrepresentation of material facts in marketing and selling real property, and breach of a fiduciary duty.

Trial Court

The Trial Court dismissed the Condo Association’s Complaint because it concluded that Plaintiffs failed to adequately plead the Chicago Municipal Code violation and breach of fiduciary duty and that certain of the Counts were time-barred pursuant to 735 ILCS 5/13-214 and 5/2-619.

Appellate Court

The Appellate Court reversed because there remained a question of fact as to when the Condo Association should have known of alleged construction defects. That answer would affect whether the claims were time-barred.

Supreme Court

The Supreme Court affirmed the Appellate Court’s reversal, holding that a condominium association generally has standing to pursue claims that affect unit owners or common elements, but that a question of fact remained as to whether the Defendants’ failure to address construction deficiencies or adequately fund certain reserves, along with earlier misrepresentations, rose to the necessary level of “fraudulent concealment.”

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