Clyde Taylor and Sally Jo Taylor v. Illinois Department of Natural Resources, Respondent. February 4, 2011

ORDER

[*234] Birnbaum, J.

This case is before the Court on Respondent's motion for summary judgment under 2-1005 of the Code of Civil Procedure.

The claim arises from Claimants' charge of an alleged breach of option contract against the Illinois Department of Natural Resources, then known as the Illinois Department of Conservation, authorized under MC 2556-L.

MC 2556-L details the Department's policy governing the use of fencing in the State's negotiation for purchasing land.

Claimants seek $55,000 in damages and their costs under the alleged enforceable fence terms of the option contract.

This Court has jurisdiction under section 8(b) of the Court of Claims Act to rule on authorized claims against the State founded upon any contract entered into with the State of Illinois.

705 ILCS 505/8 (b).

Nature of the Claim

In 1991 the Norfolk Southern Railroad gave southeastern Illinois property to the Department of Conservation, which developed the property into the Tunnel Hill State Trail route.

The Department of Conservation MC 2556-L policy was in effect at this time expressing the standard procedure for the Department in providing materials for fencing in negotiations for the purchase of land.

Initially, the Claimants signed a document titled "Option Contract" in June of 1991 regarding conditions offence installation On October 8, 1991, the Claimants granted a quitclaim deed to Respondents for parcel No. 89-11 adjacent to the abandoned railroad.

The Option Contract stated that the option "may be so exercised by the giving of said notice at any time hereafter, and on, or before the 12th day of October 1991".

(Ex. G.)

The contract also stated:

"If notice of exercise of this option is not given on [*235] or before the time above provided, this option and all rights hereunder shall terminate".

The Claimants allege the Department of Conservation gave oral and written notice of exercise of the option but the Respondents argue there is no written evidence showing such notice of exercise.

On December 30, 2002, the Claimants wrote the Department of Conservation requesting the fence and watergaps, believing the option contract placed no time restrictions upon installation.

Claimant argues that the letter of Respondent dated October 9, 1991 and the letter they wrote themselves on December 30, 2002, evidenced and confirmed the existence of Respondent's exercise of its option contract.

Option Contract

It is a proposition of the law that an option contract does not become a contract for the sale of property until the holder of the option has exercised the same in strict conformity with the conditions therein prescribed.

Moehling v. Pierce, 3 Ill. 2d 418, 121 N.E. 2d 735, 737 (1984).

Further where the parties stipulate the agreement to be in writing as a condition precedent to its completion it will not be a contract until this is done.

Calo, Inc. v. A.M.F. Pinspotters, Inc., 31 Ill. App. 2d 2, 176 N.E. 2d 1, 5 (1961).

Claimants' option contract exercises strict conformity in specifically prescribing that the exercise of the option by Respondent is through "giving written notice to either of the above named grantor(s) of this option that the State has elected to exercise its right to purchase."

(Ex. G.)

However, Claimants are not able to produce such specific documents and thus attest that "no such reports/documents exist."

(Resps. To Req. to Produce. No. 7.)

Thus, the Claimants [*236] fail to demonstrate the necessary written elements of strict conformity specifically provided in the option contract.

This Court recognizes the legislative and judicial intent in upholding strict conformity in contracts. However, this is also considerable authority weighing the contractual intent between the parties."

In construing a contract, and determining the intention of the parties, the instrument should be read and considered as a whole, and the meaning of particular language may be enlarged or limited according to the true intent of the parties as made manifest by the various provisions of the contract as a whole."

(Illinois Law and Practice, sec. 215 Contracts pp. 372-73, and cases cited therein).

In applying this fundamental contract principle, this Court believes when the Claimants granted the quit-claim deed to Respondents the fence option provisions merged within the deed.

The Claimants further contend that Respondent's gave oral notice of exercise of the option.

However, this Court has held that oral or implied contracts allegedly entered into by State entities are only enforceable when services provided to the State were of an emergency nature.

Nile Marriot, Inc. v. State, 28 Ill. Ct. Cl. 351 (1973); Patenberg & Patenberg v. Department of Public Works, 27 Ill. Ct. Cl. 1 (1969); Agles v. State, 37 Ill. Ct. Cl. 134 (1983).

In this specific case, the Claimants admit no emergency circumstances existed.

(Exs. H-K, Cls.' Ans. To Interrog. No. 9.)

Further, parol evidence rules under Section 1 and 2 of the Illinois' statute of frauds prescribe that no action may be brought under an unwritten and unsigned agreement that is not to be performed within a year of its execution or an unwritten and unsigned contract charging any person for the sale of real property or any interest in or [*237] concerning real property for a term longer than a year.

740 ILCS 80/1 to 2.

In this case the Claimants have failed the statutory requirement as eleven years have passed since the contract was originally formed and when the Claimants allege Respondent's oral exercise of the option.

In viewing the intent of the parties, this Court holds the quit-claim deed for parcel No. 89-11 in consideration for nine hundred and fifty dollars extinguished the fence option initially discussed.

Merger Doctrine

The "merger by deed" doctrine provides that a complete, valid, written contract merges and supersedes all prior and contemporaneous negotiations and agreements dealing with the same subject matter.

Emmitt v. Carlson, 215 Ill. App.

304 (1919); Czarobski v. Lata, 227 Il. 2d 364, 369 (2008).

Therefore, it is a wellsettled legal principle that if the terms of a contract for a sale of real property are fulfilled by delivery of the deed, there is a merger, and the deed supersedes all contract provisions.

In addition, courts have also noted that whether and to what extent the sales contract merges into the deed upon delivery to the buyer is also a matter of the parties' intent.

Daniels v. Anderson, 162 Ill. 2d 47, 204 Ill. Dec. 666, 642 N.E. 2d 128 (1994).

The language of the instruments and the surrounding circumstances evidences this intent.

Here, there is little evidence the parties anticipated their alleged option contract agreements would survive the closing.

First, the alleged agreement to provide materials and to labor to build a fence would have contradicted Department policy.

(Ex. E. ¶ 8)

In addition, the Claimants waited eleven years from the granting of the quit-claim deed to request the fence.

Further, [*238] the Claimants have taken no steps since their 2002 request to put up a fence on their own.

Initially, we note that the Claimant has cited no persuasive authority for the proposition that the issue of fence installation language is generally considered a collateral matter which is independent from the passage of title, and thus excluded from the "merger by deed" doctrine, nor have we discovered any case which supports that contention.

Additionally, there is no evidence in the record that either party intended that the installation of the fence be a separate and independent agreement which was collateral to the conveyance of the deed-especially as the Department of Conservation's Division of Technical Services sent the Claimants a letter on October 9, 1991 referencing the enclosed option contract that had contained the agreed conditions regarding fence installation immediately after the quit-claim deed to which no action was taken by the Complaints.

(Compl. Ex. A.).

It

is clear that both parties contemplated the extinction of their contractual rights and duties upon the delivery of the deed.

Consequently, because the Claimant failed to prove that the fence language in the option contract was a collateral agreement, this Court precluded its cause of action under the merger doctrine.

Summary Judgment Standard

Under 2-1005 of the Code of Civil Procedure, summary judgment is only proper if the pleadings, admissions, depositions, affidavits and other relative matters on file show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law.

735 ILCS 5/2-1005(c).

In ruling on a summary judgment motion the evidence already established in the record must [*239] be construed in favor of the opponent of the motion.

Canteen Twp. v. State, 48 Ill. Ct.

Cl. 179, 181 (1995).

When a Respondent moves for summary judgment, the claimant must come forward with admissible evidence.

Freeman v. State, 55 Ill. Ct.

Cl. 329, 336 (2003).

The evidence under consideration in ruling on a motion for summary judgment is to be strictly construed against the moving party and liberally construed in favor of its opponent.

Winters v. State, 60 Ill. Ct. Cl. 272, 273 (2008).

The interpretation of a contract-especially a facially unambiguous contract-is a matter of law and not a matter of fact, and therefore should be disposed of at the summary judgment stage.

Baker's Pharm. v. State, 52 Ill. Ct. Cl. 442, 452 (1999).

In the case at bar, the Claimants failed to provide evidence of any written documents establishing the necessary elements of strict conformity prescribed in the option contract.

Further, their assertions of Respondent's oral exercise of the option are barred under the Illinois' Statute of Frauds because of the time period between the option contract and alleged oral exercise.

Lastly, in viewing the intention of the parties in forming a contract the fence option terms merged under the provisions of the quit-claim deed under the legal precedent of the "merger by deed "doctrine.

The Claimants have failed to show that there is a genuine issue of material fact and thus the Respondent is entitled to a judgment as a matter of law.

735 ILCS 5/2-1005(c).

Respondent's motion for summary judgment against the Claimants is GRANTED.

This matter is dismissed with prejudice.