Zerjal v. Daech & Bauer Constr. Inc.

405 Ill.App.3d 907

939 N.E.2d 1067

345 Ill.Dec. 887

Jackie ZERJAL and Doug Zerjal, Plaintiffs–Appellants,

v.DAECH & BAUER CONSTRUCTION, INC., Defendant,andBill Theisman, d/b/a Sure Home Appraisal and Inspection Services, Defendant–Appellee.

No. 5–10–0066.

Appellate Court of Illinois, Fifth District.

Dec. 1, 2010.

Timothy J. Bates, The Bates Law Firm, Belleville, IL, for Appellants.Joseph B. McDonnell, Greensfelder, Hemker & Gale, P.C., Swansea, IL, for Appellee.Justice WELCH delivered the judgment of the court, with opinion.

[345 Ill.Dec. 890 , 405 Ill.App.3d 908] The plaintiffs, Doug and Jackie Zerjal, appeal the involuntary dismissal of their breach-of-contract action against the defendant, Bill Theisman, doing business as Sure Home Appraisal and Inspection Services, by the circuit court of St. Clair County. On appeal, the plaintiffs argue (1) that home inspectors should not be allowed to disclaim liability when they fail to provide promised services, (2) that a contractual limitation period is not enforceable when it is shorter than the applicable statute of limitations and the latter has not been knowingly and voluntarily waived, and (3) that the spouse of a contract signatory has a justiciable interest in the contract. For the following reasons, we affirm the circuit court's dismissal.

The facts necessary for our disposition of this appeal are as follows. Before purchasing an existing house in Fairview Heights, the plaintiffs had the property inspected by Bill Theisman, doing business as Sure Home Appraisal and Inspection Services, pursuant to a contract signed by Theisman and Doug Zerjal. Jackie Zerjal, Doug's wife, did not sign the home inspection contract. The inspection occurred on May 13, 2006, and the plaintiffs purchased the property from Daech & Bauer Construction, Inc., on May 31, 2006.

On June 16, 2009, the plaintiffs filed a three-count complaint against Daech & Bauer Construction, Inc., and Bill Theisman. Counts I and II were directed at Daech & Bauer Construction, Inc., and are not at issue in the instant appeal. Count III was a breach-of-contract claim against Bill Theisman, doing business as Sure Home Appraisal and Inspection Services. The plaintiffs allege that Theisman failed to discover and/or disclose numerous defects in the home that “should have been known to a reasonably careful licensed building inspector.” Specifically, the plaintiffs claim that defendant Theisman did not inform them that the foundation was insufficient to support the home's load, the underlayment was decayed and structurally unstable, the walls were unstable and unable to support the necessary loads, water was entering the home at the footing and the foundation, the HVAC unit was blowing moist air against wooden components of the house, and the home's electrical system was installed and maintained in an unsafe manner.

Theisman moved to dismiss the complaint pursuant to section 2–619 of the Code of Civil Procedure (735 ILCS 5/2–619 (West 2008)) on three grounds: (1) the limit-of-liability provision in the contract was valid and enforceable under Illinois law and, without admitting liability, Theisman had tendered the cost of the inspection ($175) to the plaintiffs, (2) the suit was barred because it was not filed within the two-year period provided for in the contract, and (3) Jackie Zerjal's claim was barred because she was not a party to the contract. In support of the motion to dismiss, Theisman submitted the entire home inspection contract and the completed inspection report.

[939 N.E.2d 1071 , 345 Ill.Dec. 891]

The home inspection contract contained the following relevant provisions. The inspection was to be conducted under American Society of Home Inspector standards or, if more stringent, the standards of the State of Illinois. The parties contracted for a visual inspection of the property and a written report of the apparent condition of the “readily accessible installed systems and components of the property existing at the time of the inspection.” Latent and concealed defects and deficiencies were excluded from the inspection. The inspector assumed no liability or responsibility for the costs of repairing or replacing any unreported defects or deficiencies either current or arising in the future if not given the required notice, in this case 72 hours. Theisman made no warranties, express or implied, on the fitness of the property, nor did he insure or guarantee against defects in the structure. By the terms of the contract, Theisman's liability was limited to the cost of the inspection, or $175. The contract also provided that any legal action must be brought within two years of the date of inspection or was deemed forever waived and barred.

The circuit court granted the defendant's motion to dismiss with prejudice on January 13, 2010. The court did not specify the grounds on which it based its decision. On the same day, the circuit court entered a judgment in favor of the plaintiffs and against Daech & Bauer Construction, Inc., for $94,000 plus the costs of the suit. The plaintiffs filed a timely notice of appeal on January 25, 2010.

On appeal, the plaintiffs raise three issues regarding the court's dismissal of count III of the complaint. First, the plaintiffs argue that home inspectors should not be allowed to disclaim or severely limit their liability when they fail to provide contractually promised services. They root this argument in public policy considerations, arguing that the state should protect homeowners from home inspectors. Second, the plaintiffs argue that a contractual limitation period for filing suit is not enforceable when it is shorter than the applicable statute of limitations and the latter has not been knowingly and voluntarily waived. Last, the plaintiffs argue that Jackie Zerjal has a justiciable interest in the home inspection contract. We will address each contention in turn after determining the scope of our review.

The plaintiffs' complaint was dismissed pursuant to section 2–619 of the Code of Civil Procedure (735 ILCS 5/2–619 (West 2008)), which governs the involuntary dismissal of a complaint based upon certain defects or defenses. “A section 2–619 motion to dismiss admits the legal sufficiency of the complaint and raises defects, defenses, or other affirmative matters that appear on the face of the complaint or are established by external submissions that act to defeat the claim.” Krilich v. American National Bank & Trust Co. of Chicago, 334 Ill.App.3d 563, 569–70, 268 Ill.Dec. 531, 778 N.E.2d 1153 (2002). The purpose of a section 2–619 motion is to dispose of issues of law and easily proved issues of fact early in the litigation. Czarobski v. Lata, 227 Ill.2d 364, 369, 317 Ill.Dec. 656, 882 N.E.2d 536 (2008). When ruling on a section 2–619 motion, the court must construe the pleadings and supporting documents in the light most favorable to the nonmoving party. Czarobski, 227 Ill.2d at 369, 317 Ill.Dec. 656, 882 N.E.2d 536. The reviewing court must consider whether the existence of a genuine issue of material fact should have precluded the dismissal or, absent an issue of material fact, whether a dismissal was proper as a matter of law. Czarobski, 227 Ill.2d at 369, 317 Ill.Dec. 656, 882 N.E.2d 536. We may affirm the dismissal on any proper basis found in the record.

[345 Ill.Dec. 892 , 939 N.E.2d 1072]

Barber v. American Airlines, Inc., 398 Ill.App.3d 868, 878, 339 Ill.Dec. 119, 925 N.E.2d 1240 (2010), appeal allowed, 236 Ill.2d 550, 342 Ill.Dec. 567, 932 N.E.2d 1028 (2010). Our review is de novo. Czarobski, 227 Ill.2d at 369, 317 Ill.Dec. 656, 882 N.E.2d 536.

As to the first issue on appeal, the plaintiffs argue that exculpation clauses that severely limit inspector liability are unconscionable and that Theisman should not be permitted to avoid liability when he failed to provide contractually promised services. In response, Theisman argues that the contract specifies recoverable damages and that absent a violation of settled public policy of the state or a fiduciary relationship between the parties, the contractual provision is valid and enforceable. We agree with Theisman.

While generally disfavored under Illinois law (Platt v. Gateway International Motorsports Corp., 351 Ill.App.3d 326, 330, 286 Ill.Dec. 222, 813 N.E.2d 279 (2004)), exculpatory clauses are enforceable unless (1) enforcement would be against a settled public policy of the state and (2) something in the social relationship of the parties militates against enforcement. Harris v. Walker, 119 Ill.2d 542, 548, 116 Ill.Dec. 702, 519 N.E.2d 917 (1988). As to the first prong, there is no precise definition of “public policy.” The term is generally used to describe the customs, morals, and notions of justice that prevail in a state. Marchlik v. Coronet Insurance Co., 40 Ill.2d 327, 332, 239 N.E.2d 799 (1968). Public policy is not static and, when not fixed by the constitution, can be set by the legislature or courts. Roedelsheim v. Twelfth Street Store Corp., 325 Ill.App. 692, 60 N.E.2d 650 (1945) (abstract of op.). Illinois courts have applied a strict test in determining when public policy interests will invalidate a contract. Rutter v. Arlington Park Jockey Club, 510 F.2d 1065, 1069 (7th Cir.1975). A contract provision will be found to be against public policy “ ‘if it is injurious to the interests of the public, contravenes some established interest of society, violates some public statute, is against good morals, tends to interfere with the public welfare or safety, or is at war with the interests of society or is in conflict with the morals of the time.’ ” In re Estate of Feinberg, 235 Ill.2d 256, 265, 335 Ill.Dec. 863, 919 N.E.2d 888 (2009) (quoting Vine Street Clinic v. HealthLink, Inc., 222 Ill.2d 276, 296, 305 Ill.Dec. 617, 856 N.E.2d 422 (2006)).

The plaintiffs argue that the contract provision limiting Theisman's liability to the cost of the inspection is against...