Lanterman v. Edwards

                               NO. 5-97-0058

                                  IN THE

                        APPELLATE COURT OF ILLINOIS

                              FIFTH DISTRICT
_________________________________________________________________

TERRY ROBERT LANTERMAN and      )  Appeal from the
SHIRLEY JEAN LANTERMAN,         )  Circuit Court of
                                )  Williamson County.
     Plaintiffs-Appellees,      )
                                )
v.                              )  No. 95-L-191
                                )
JERRY EDWARDS and               )
SHERRY EDWARDS,                 )  Honorable
                                )  William H. Wilson,
     Defendants-Appellants.     )  Judge, presiding.
_________________________________________________________________

     JUSTICE CHAPMAN delivered the opinion of the court:

     Terry and Shirley Lanterman purchased Jerry and Sherry
Edwards's home.  The Lantermans then sued the Edwardses for damages
relating to the replacement of the home heating and air-
conditioning system.  The trial court awarded the Lantermans
$3,450.  The Edwardses appeal.  We affirm in part, reverse in part,
and remand.
     Three issues are raised on appeal.  First, defendants argue
that plaintiffs' pleadings do not conform to the proof in this
case.  Defendants contend that the trial court awarded damages
based upon the extension of a warranty to the heating and air-
conditioning unit.  Defendants argue that the complaint makes only
a bare allegation that the heating and air-conditioning unit was
not working and that it alleges no duty or warranty as to the
system.  
     Plaintiffs' complaint alleges that "plaintiffs discovered
latent defects in the premises, being that *** the heating and air
conditioning are not working[] but were specifically warranted by
defendants to be in good working order."  The complaint also
alleges that defendants "falsely and fraudulently represent[ed] to
plaintiffs that *** they were not aware of material defects in the
heating, air conditioning or ventilating systems[] and in fact
specifically warranted said system to be in good working order."  
     Given the allegations in the complaint, we cannot agree with
defendants that the complaint fails to allege any warranty as to
the heating and air-conditioning system.  In addition, we note that
defendants waived this argument as they never objected to, or
raised below, any defect in the pleadings.  In fact, defendants
defended upon the issues of the existence of the warranties and the
condition of the heating and air-conditioning unit.  All objections
to pleadings shall be raised by motion.  735 ILCS 5/2-615 (West
1996).  Any defects in pleadings, either in form or substance, not
objected to in the trial court are waived on appeal.  Geleto v.
Giglietti, 40 Ill. App. 3d 226, 228, 352 N.E.2d 1, 3 (1976).  
     Defendants next argue that the trial court erred in finding
that the contract warranting the condition of the heating and air-
conditioning unit did not merge into the deed.  
     The real estate sales agreement entered into between the
parties provided as follows:
     "CONDITION OF PREMISES.  Buyers acknowledge they have
     inspected the real estate and the improvements thereon, they
     are acquainted with the condition thereof and they accept the
     same in ***
          ***
            X   (b) As-is condition except Sellers warrant the
     plumbing, heating, electrical and air conditioning systems to
     be in normal working condition on date of possession.  Where
     paragraph (b) is selected, the paragraph entitled "Termite
     inspection" shall apply.  Buyers shall have the right to
     inspect the property during the 48-hour period immediately
     prior to closing."  (Emphasis added.)
     The trial court's order provides in pertinent part:
     "I find that this clause was incidental to the main purpose of
     the contract (conveyance of real estate).  It was a collateral
     undertaking[,] and the defendants could not be in breach of it
     until the `date of possession', which by the contracts [sic]
     terms was immediately upon closing.  [Citations.]  The
     doctrine of merger does not apply to this warranty. 
          ***
          *** I find that the contract provides additional rights
     to the buyers, as stated in the contract, but that said
     provision is not an exclusive right, or remedy, to the
     exclusion of all other remedies."
     Defendants argue that the warranty provision in the sales
agreement merged with the deed upon the delivery of the deed. 
Defendants argue that the trial court erred because nothing in the
contract extended any warranty beyond the date of possession and
that in fact it was the plaintiffs who failed to inspect the
premises on or prior to closing.  
     In general, if the terms of a contract for the sale of real
estate are fulfilled by the delivery of the deed, there is a merger
of the two instruments and, unless a reservation is made in the
deed, it supersedes all contract provisions.  Mallin v. Good, 93
Ill. App. 3d 843, 845, 417 N.E.2d 858, 860 (1981).  However, when
an executory contract contains provisions that are collateral to
and independent of the provisions of the subsequent deed, there is
no merger and the independent contract clauses survive the delivery
of the deed.  Ollivier v. Alden, 262 Ill. App. 3d 190, 195, 634 N.E.2d 418, 422 (1994).  Generally, warranties as to quality, in
comparison with requirements of conveyancing, touch upon aspects
other than the conveyance itself and are incidental to the main
purpose of the deed, which is to transfer good title.  Rouse v.
Brooks, 66 Ill. App. 3d 107, 110, 383 N.E.2d 666, 668 (1978).  
     Whether or not the plaintiffs exercised their contractual
right to inspect the premises is of no consequence to the
defendants' contractual obligation to provide a heating and air-
conditioning system in normal working condition on the date of
possession.  The representation in the contract that the heating
and air-conditioning unit would be in normal working condition at
the time of closing was a collateral undertaking which was not
performed by the delivery of the deed.  Accordingly, we agree with
the trial court that the doctrine of merger does not apply to the
warranty as to the heating and air-conditioning system.  
     Next, defendants argue that it was against the manifest weight
of the evidence for the trial court to find that the heating and
air-conditioning unit was not operable at the time of closing.  The
plaintiffs testified that within two days after moving into their
home, they discovered that the unit was not working.  Given the
record, we find that the trial court's finding that the unit was
not in operable condition at the time of closing was not against
the manifest weight of the evidence.  
     Finally, defendants argue that the trial court erred in
awarding $3,450 in damages, which was the cost of a new heating and
air-conditioning unit.  
     As the party seeking to recover, it was the plaintiffs' burden
not only to establish that they sustained damages but also to
establish a reasonable basis for the computation of those damages. 
Schoeneweis v. Herrin, 110 Ill. App. 3d 800, 808, 443 N.E.2d 36, 42
(1982).  A trial court's determination as to damages will not be
disturbed unless those findings are manifestly against the weight
of the evidence.  Schoeneweis, 110 Ill. App. 3d at 808, 443 N.E.2d 
at 42.  
     Shirley Lanterman testified that she and her husband did not
attempt to seek estimates for repairs of the unit.  At trial,
defendants called the only experts to testify.  When asked if the
unit was repairable, William King of Fowler Heating testified,
"Yes, but I can't really say exactly what the problem was because
I never went back to find out exactly what the low voltage problem
was."  Steve Fowler of Fowler Heating testified that in his opinion
the unit could have been repaired for a cost of $50 to $300.  Thus,
the only experts to testify at trial stated that the heating and
air-conditioning unit was repairable.  
     To award plaintiffs the cost of a new unit as replacement cost
is to award plaintiffs a windfall and make them more than whole. 
See First National Bank of Elgin v. Dusold, 180 Ill. App. 3d 714,
719, 536 N.E.2d 100, 103 (1989).  Damages for breach of contract
should only place the aggrieved party in the position she would
have been in had the contract been performed.  Dusold, 180 Ill.
App. 3d at 719, 536 N.E.2d  at 103.  Accordingly, we reverse the
award and remand for a determination of the amount of damages to be
awarded consistent with this opinion.

     Affirmed in part and reversed in part; cause remanded.  

     RARICK, J., concurs. 

     PRESIDING JUSTICE WELCH, dissenting:
     As is, I cannot agree with the majority's result in this
matter.  I believe that the doctrine of merger is applicable based
upon the intent of the parties made evident from a reading of the
sales agreement.  Whether and to what extent merger occurs is a
matter of the parties' intent as evidenced by the language of the
instruments and surrounding circumstances.  Timothy Christian
Schools v. Village of Western Springs, 285 Ill. App. 3d 949, 953
(1996).
     In the instant case, plaintiffs signed a sales agreement
providing that they were to accept the premises from defendants "as
is".  The sales agreement further provides that defendants
warranted the heating and air-conditioning systems to be in "normal
working condition on date of possession."  (Emphasis added.) 
Plaintiffs were allowed to inspect the property within 48 hours of
closing, and defendants were to remedy any defects disclosed prior
to closing.  Specifically, the agreement provides that defendants
would remedy the defects as soon as practical and that closing
would occur "within 48 hours of the completion of such remedial
work."  (Emphasis added.)  Based upon the language in the sales
agreement, I find it clear that any repairs were to be conducted
prior to the time of the closing.  I cannot find any collateral
undertakings that extend beyond the delivery of the deed.  The
language of the agreement shows that all repairs were intended to
be completed prior to the delivery of the deed, and at that time
plaintiffs were to accept the property "as is."  I disagree with
the majority that the warranty as to the heating and air-
conditioning systems is a collateral undertaking which extends
beyond the delivery of the deed.  The language in the contract does
not support this conclusion.  Plaintiffs accepted the property "as
is" at the time of closing, and plaintiffs' failure to inspect the
property prior to closing does not extend the warranty of the
heating and air-conditioning indefinitely "beyond the date of
possession."  Accordingly, I believe that the words of the
agreement show an intention between the parties to have the sales
agreement and the warranty merge with the deed.
     Before ending, I wish to note that just as plaintiffs in this
case failed to inspect the house prior to possession, the majority
has failed to give meaning to the words "as is".  The majority's
decision has either ignored the words "as is" or given them some
new unexplained meaning.  I choose not to speculate as to what "as
is" now means.  All I can say is that following this disposition,
it appears that "as is" once was.