No. 2--00--1076

JUSTICE GROMETER delivered the opinion of the court:

Defendant, Duane Donahue, appeals from a series of ordersentered by the circuit court of McHenry County. Defendant firstassigns error in the circuit court's grant of summary judgment infavor of plaintiff, Premier Title Company. Defendant next contendsthat the court erred in denying his motion for summary judgment. Finally, defendant argues that the trial court improperly deniedhis motion for sanctions. For the reasons that follow, we affirm.

BACKGROUND

Plaintiff acted as the closing agent for a real estatetransaction in which defendant was the seller. The closingoccurred on August 8, 1997. At the time of the closing, realestate taxes were unpaid on the property for 1995. The firstinstallment due in 1996 was unpaid as well. Plaintiff noted on itstitle commitment that defendant's 1995 real estate taxes had beensold and the first installment of the 1996 taxes were past due. This was unacceptable to the buyer. Hence, plaintiff and defendantentered into an indemnity agreement whereby defendant would place$3,500 in an escrow with plaintiff and plaintiff would issue atitle insurance policy. The unpaid taxes were listed as exceptionsin the agreement. The agreement required plaintiff to remove theseexceptions by August 21, 1997. Upon the removal of the exceptions,any funds remaining were to be disbursed to defendant.

Plaintiff redeemed the 1995 real estate taxes and reimburseditself from the escrow. Plaintiff then returned the balance of thefunds to defendant. The first installment of the 1996 taxes hadnot yet been paid. Plaintiff subsequently paid the firstinstallment of the 1996 taxes pursuant to the title insurancepolicy it had issued. Plaintiff requested that defendant tender$1,189.72 to cover this expense. Defendant refused to comply.

Plaintiff subsequently filed a small claims action to recoupthis sum. Both parties moved for summary judgment. The trialcourt granted plaintiff's motion and denied defendant's. Defendantalso moved for sanctions, pursuant to Supreme Court Rule 137 (155Ill. 2d R. 137), alleging that plaintiff failed to provide noticeof its motion for leave to file its summary judgment motion andfailed to notify defendant that the date originally set for trialhad been stricken. Defendant asserts that, as a result, heprepared for trial on the original date and traveled nearly 500miles to attend court that day. The trial court denied thismotion.

ANALYSIS

Determining whether the trial court's resolution of thesummary judgment motions was proper requires us to construe thecontract that created the escrow. Because of the posture of thiscase, the granting of one of the parties' summary judgment motionentails the denial of the other's. Accordingly, we will notaddress the motions separately.

We review de novo a trial court's grant of summary judgment. Corona v. Malm, 315 Ill. App. 3d 692, 694 (2000). Summary judgmentis appropriate only if no genuine issue of material fact exists andthe moving party is entitled to judgment as a matter of law. Stewart v. Jones, 318 Ill. App. 3d 552, 557-58 (2001). Theinterpretation of a contract is a question of law and therefore mayproperly be decided on a motion for summary judgment. Fitzwilliamv. 1220 Iroquois Venture, 233 Ill. App. 3d 221, 237 (1992).

The primary goal in construing a contract is to give effect tothe intent of the parties. Omnitrus Merging Corp. v. Illinois ToolWorks, Inc., 256 Ill. App. 3d 31, 34 (1993). When the language ofa contract is clear, a court must determine the intent of theparties solely from the plain language of the contract. Owens v.McDermott, Will & Emery, 316 Ill. App. 3d 340, 344 (2000). Thelanguage of a contract must be given its plain and ordinarymeaning. Owens, 316 Ill. App. 3d at 344. When interpreting acontract, a court must consider the document as a whole, ratherthan focusing upon isolated portions. Spectramed, Inc. v. Gould,Inc., 304 Ill. App. 3d 762, 770 (1998).

In the present case, each party relies on a different subpartof the contract. Defendant relies on the following provision:

"If this Title Indemnity-Escrow Agreement is not terminatedwithin thirty (30) calendar days of the date set forth inparagraph (3) on the preceding page, the Agent Escrowee shallthereafter charge a reasonable annual service or handling feeto be paid out of the deposit. The fee shall consist of$75.00 or 10% of the amount deposited, per month, whicheversum is greater."

According to defendant, this provision demonstrates that theprimary intent of the parties was to create a relationship thatwould terminate within 30 days. Defendant further asserts that theprovision indicates that the disbursal of the deposited funds wouldterminate the agreement. Defendant concludes that the agreementterminated when plaintiff disbursed the balance of the remainingfunds to him, thus terminating his obligations under the contract. Limiting our consideration to the plain language of this subpart,defendant's interpretation is not unreasonable. The provisionspeaks in terms of the agreement itself terminating, rather thanadditional fees becoming due if any of the deposited funds wereretained past a certain point. Since this provision speaks ofamounts being paid out of funds deposited, it is not unreasonableto conclude that the termination of the agreement is related to thedisbursal of the deposited funds.

Plaintiff relies on a different provision. This provisionstates that defendant agrees:

"To forever defend and save the Agent-Escrowee, and PREMIERTITLE COMPANY, harmless from all the Exceptions, from anyloss, costs, damages, attorneys' fees and expenses of everykind which they may suffer, expend or incur under, or byreason of the title insurance policy, on account of theExceptions, or on account of the assertion or enforcement orattempted assertion of enforcement thereof or of any rightsexisting or later arising, or which may at any time be claimedto exist under or growing out of any of the exceptions."

Pointing to the plain language of this subpart, specifically"forever," plaintiff contends that the agreement creates ondefendant's part an ongoing obligation, unrelated to the disbursalof any escrowed funds, to indemnify it against any losses growingout of the "Exceptions." The "Exceptions" listed in the agreementrefer to the unpaid real estate taxes. Plaintiff presents areasonable reading of the language upon which it relies.

Thus, we are presented with two conflicting provisions. Readin isolation, they create an apparent ambiguity as to the parties'intentions. However, in interpreting this contract, we mustconsider the document as a whole (see Spectramed, Inc., 304 Ill.App. 3d at 770) and determine if these two subparts arereconcilable.

The resolution of this appeal turns upon the resolution ofthis conflict. Plaintiff does not address this conflict. Defendant briefly asserts that any ambiguities in a contract shouldbe resolved against its drafter, which is, apparently, plaintiff inthis case. See Brewer v. Custom Builders Corp, 42 Ill. App. 3d668, 672 (1976). However, we will resort to this doctrine, knownas contra proferentem, only if we fail to ascertain the intent ofthe parties using ordinary principles of contractualinterpretation. See Farwell Construction Co. v. Ticktin, 84 Ill.App. 3d 791, 798-99 (1980). The rule has been described as "atbest a secondary rule of interpretation, a last resort which may beinvoked after all the ordinary interpretive guides have beenexhausted." Bunge Corp. v. Northern Trust Co., 252 Ill. App. 3d485, 493 (1993); see also National Tea Co. v. Commerce & IndustryInsurance Co., 119 Ill. App. 3d 195, 209 (1983). In fact, as weunderstand it, the rule is not an interpretive one at all. Insteadof seeking to divine the intent of the parties, the rule merelyassigns the risk of an unresolvable ambiguity to the partyresponsible for creating it. Thus, before we apply this rule, wewill attempt to resolve the apparent conflict between the twosections of the agreement.

Taking the contract as a whole, we believe that itunambiguously expresses the intent of the parties that defendantwas under a continuing obligation to indemnify plaintiff regardingexpenses plaintiff incurred resulting from the exceptions listed inthe contract. Defendant's interpretation, that the agreementterminated with the disbursal of the escrowed funds, violates atleast three well-established principles of contractualconstruction. Plaintiff's interpretation does not.

First, it has been recognized that "it is a basic principle ofcontract construction that where two clauses conflict, it is theduty of the court to determine which of the two clauses mostclearly expresses the chief object and purpose of the contract." Harris Trust & Savings Bank v. Hirsch, 112 Ill. App. 3d 895, 900(1983). Further, "a clause which requires something to be done toeffect the purpose of the contract is entitled to greaterconsideration than one which does not." Harris Trust & SavingsBank, 112 Ill. App. 3d at 900. Read as a whole, it is clear thatthe chief purpose of this contract is to insure that defendantwould be responsible for the unpaid real estate taxes. The sectionplaintiff relies on effectuates the purpose of the contract byrequiring defendant to "defend and save" plaintiff from all lossesincurred on account of the unpaid taxes. The section defendantrelies on deals with fees that may be imposed should the agreementcontinue for more than 30 days beyond the date set for removing theexceptions. The section on which plaintiff relies is related tothe central purpose of the contract, while the one upon whichdefendant relies deals with a collateral matter. Therefore, thesection upon which plaintiff relies is entitled to more weight inascertaining the parties' intent as to when the agreement wouldterminate.

Second, defendant's construction of the contract violates theprinciple that requires that a contract be construed such that noneof its terms are regarded as mere surplusage. See J.B. Esker &Sons, Inc. v. Cle-Pa's Partnership, 325 Ill. App. 3d 276, 285(2001). Defendant's interpretation makes the term "forever,"contained in the section upon which plaintiff relies, meaningless. "Forever" would last no longer than the distribution of the fundsheld in escrow. On the other hand, plaintiff's interpretationsuffers from no such defect. The term "forever" applies todefendant's obligation to indemnify plaintiff, while the sectionupon which defendant relies allows for the imposition of additionalfees in certain circumstances. Neither provision, nor any portionthereof, is rendered meaningless. This provides further supportfor plaintiff's interpretation of the contract.

Third, defendant's interpretation disregards the rule that, inthe event of a conflict, specific provisions are entitled to moreweight in ascertaining the parties' intent than general provisions. See Water Pipe Extension Bureau of Engineering Laborers' Local 1092v. City of Chicago, 318 Ill. App. 3d 628, 638 (2000). The sectionrelied on by plaintiff specifically addresses defendant'sobligation to indemnify plaintiff. The section defendant relies ondeals with matters unrelated to this obligation, and thus onlyaddresses termination tangentially. Again, plaintiff'sinterpretation prevails.

Accordingly, we accept plaintiff's interpretation of thecontract and reject defendant's. The contract imposed a continuingduty on defendant to indemnify plaintiff for losses arising out ofthe unpaid real estate taxes. Defendant also briefly argues thatwhere a party "has performed his obligations under an agreement, hecannot be liable for breech [sic] of that agreement." As we haveconcluded that the contract imposed a continuing obligation upondefendant to indemnify plaintiff, defendant has not performed hisobligations. Thus, this argument is meritless.

Defendant next contends that the agreement between him andplaintiff merged into the real estate deed at the closing. Although still a part of Illinois law, the merger doctrine isdisfavored by modern courts. Hagenbuch v. Chapin, 149 Ill. App. 3d572, 576 (1986). Exceptions to the doctrine exist, two of whichare relevant to the instant case. First, executory agreements forthe performance of separate and distinct obligations beyond theconveyance itself do not merge with a deed at closing. Petersen v.Hubschman Construction Co., Inc., 76 Ill. 2d 31, 39 (1979). In thepresent case, defendant's obligation to plaintiff was distinct fromdefendant's obligation to convey the real estate to the buyer. Second, obligations that are not to be performed until afterdelivery of a deed do not merge. Mearida v. Murphy, 87 Ill. App.3d 87, 89 (1980). The contract between the parties required thatall exceptions be removed by August 21, 1997. The closing in thiscase occurred on August 8, 1997. Both exceptions are applicable;hence, the contract between plaintiff and defendant did not mergeinto the deed at closing.

Finally, we turn to the trial court's denial of defendant'smotion for sanctions made pursuant to Supreme Court Rule 137 (155Ill. 2d R. 137). Defendant's motion is based on the allegedfailure of plaintiff to provide notice of plaintiff's motion forleave to file a summary judgment motion and the cancellation of thetrial date that was originally set. We will overturn a trialcourt's decision to grant or deny a motion for sanctions only ifthe trial court abused its discretion. Baker v. Daniel S. Berger,Ltd., 323 Ill. App. 3d 956, 963 (2001). The record on appealcontains no transcript of the hearing where the motion was denied,no written order explaining the trial court's decision, and nobystander's report (see 166 Ill. 2d R. 323(c)) of the proceedingwhere this motion was decided. We do not know upon what basis thetrial court exercised its discretion. It is the appellant's burdento present a sufficient record to support any claims of error. Foutch v. O'Bryant, 99 Ill. 2d 389, 391-92 (1984). Any doubtsarising as a result of the record being inadequate must be resolvedagainst the appellant. Foutch, 99 Ill. 2d at 392. Consequently,we are unable to determine if the trial court abused itsdiscretion. See In re Marriage of Blinderman, 283 Ill. App. 3d 26,34 (1996) ("Absent a transcript of the hearing on the distributionof the assets, there is no basis upon which to determine whetherthe circuit court abused its discretion in denying defendant'smotion").

CONCLUSION

In light of the foregoing, the order of the circuit court ofMcHenry County granting plaintiff's motion for summary judgment anddenying defendant's motion for summary judgment is affirmed. Theorder of the circuit court denying defendant's motion for sanctionsis also affirmed.

Affirmed.

HUTCHINSON, P.J., and McLAREN, J., concur.