KAREN ERLENBUSH, Plaintiff-Appellant, v. GREGORY W. LARGENT, Defendant-Appellee. | ) ) ) ) ) ) ) ) | Appeal from Circuit Court of Sangamon County No. 00LM1932 Honorable |
JUSTICE APPLETON delivered the opinion of the court:
Plaintiff, Karen Erlenbush, bought a house from defendant, Gregory W. Largent, and discovered it was infested withtermites. She sued him for fraud, prevailed, and was awardeddamages. The real-estate purchase contract provided that if oneparty brought "an action against the other with respect to thiscontract," the prevailing party was entitled to attorney fees. Interpreting that provision as encompassing only actions forbreach of contract, the trial court denied plaintiff's requestfor attorney fees. The court found, however, that if plaintiffwere contractually entitled to attorney fees, $4,500 would be areasonable amount. Plaintiff appeals solely from the denial ofher request for attorney fees.
Though not an action on the contract, an action forfraud in the inducement is an action "with respect to" thecontract. Plaintiff, the prevailing party, is contractuallyentitled to attorney fees. Therefore, we reverse the trialcourt's judgment and remand this case with directions to (1)award her an additional $4,500 and (2) determine and award herthe reasonable attorney fees she has incurred since filing heraffidavit of attorney fees on April 4, 2003.
Plaintiff filed her four-count complaint on September25, 2000. Count I alleged fraud through an affirmative misrepresentation. She alleged defendant had induced her to buy thehouse on July 30, 1999, by falsely telling her "the premises werenot currently infested with termites and had not been previouslydamaged by termite infestations." Count II alleged fraud througha failure to disclose the termite problem. Count III alleged aviolation of the Residential Real Property Disclosure Act (Disclosure Act) (765 ILCS 77/1 through 99 (West 1998)). Count IVsought a rescission of the contract.
At the conclusion of a bench trial, the trial courtheld that count III was time barred and that plaintiff had failedto adduce sufficient evidence to warrant the rescission sherequested in count IV. Without specifically entering judgment oncount I or II, the court found plaintiff had "established theelements of fraud": "Defendant was aware of problems with themain support beam and failed to disclose said damage."
Plaintiff had bought the house from defendant for$25,500 but requested compensatory damages in the amount of$42,214. Deeming that request to be excessive, the trial courtawarded her $8,000 and ordered her to submit an affidavit ofattorney fees.
The attorney-fee provision in the contract reads asfollows:
"If either [b]uyer or [s]eller brings anaction against the other with respect to thiscontract, the prevailing party shall be entitled to recover his reasonable attorney fees,costs[,] and expenses."
Ultimately, on the basis of that contractual provision,the trial court denied plaintiff's request for attorney fees. The court explained:
"The [p]laintiff's cause of action remainsfor common[-]law fraud. The elements of thatclaim have been established by the evidencepresented by [p]laintiff. Plaintiff mayno[t,] however[,] recover attorney[] feesunder the original real[-]estate contract forsale. The attorney[-]fees provision of thecontract relates to causes of action forbreach of contract for sale. Plaintiff'sclaim for fraud arises independently from thecontract and does not give rise to attorney[]fees. For purposes of completing the record,the [c]ourt finds that $4,500 is a reasonableaward of fees in the present case."
Plaintiff filed a motion asking the trial court toreconsider its refusal to award attorney fees to her. In denyingthat motion, the court explained:
"The fundamental issue raised by the requestfor fees is whether the action maintained bythe [p]laintiff was one that related to abreach of the contract for sale. The actionwas for fraud and not for breach of the contract for sale. To allow an award of attorney[] fees in the present case would expandthe traditional notion of responsibility forattorney [fees] beyond the applicable caselaw in Illinois. Such action by the [c]ourtwould not be appropriate."
This appeal followed.
Under the common law, the losing party in a lawsuitdoes not have to pay the winning party's attorney fees. Powersv. Rockford Stop-N-Go, Inc., 326 Ill. App. 3d 511, 515, 761N.E.2d 237, 240 (2001). Parties to a contract may agree otherwise, but if they do, the attorney-fee provision is strictlyconstrued. Powers, 326 Ill. App. 3d at 515, 761 N.E.2d at 240;see also 4 W. Jaeger, Williston on Contracts