In Wheeler Fin., Inc. v. Law Bulletin Publishing Co., 2018 IL App (1st) 171495 (Sep. 14, 2018) a tax purchaser sued the publisher of its tax deed notices for an error in the notice which resulted in the tax buyer losing its tax deed proceeding. The tax buyer alleged that it had “an enforceable oral contract” with the publisher, whereby it agreed to send the publisher the notice for the subject property, and the publisher agreed to publish it as written by the tax buyer in exchange for a fee. The publisher breached the oral contract by publishing the notice with an incorrect hearing date that caused the circuit court to deny the application for a tax deed. The tax buyer sought damages in excess of $1 million, the estimated value of the subject property.
The publisher’s defense was that there was a 15-year course of dealing between the parties that qualified the terms of the contract, pursuant to which the first publication of all the was provided to the tax buyer’s lawyers to review on the buyer’s behalf and they were required to notify the publisher of any errors so that they could be corrected in a republication within the notice-serving deadline. The publisher contended that the tax buyer failed to abide by the terms of the contract when it failed to have the lawyer review the first publication of the notice for the subject property and did not notify it of the error in the hearing date in time for it to republish a corrected version.
The case went to trial and a verdict was entered on behalf of the publisher. The verdict was upheld on appeal.
Among other things, the tax buyer argued that the trial court erred in denying its motion at trial for a directed verdict and it erred in admitting evidence of the parties’ prior course of dealing and instructing the jury thereon. The tax buyer argued that the evidence established a written contract to publish the notices and that the trial evidence showed that the publisher breached the contract by publishing the notice with the wrong hearing date. The court rejected that argument finding that the tax buyer did not plead breach of a written contract, but an oral or implied contract, that was supplemented by the parties’ course of dealings. The 15 year course of dealings created additional contractual obligations for each party. Specifically, pursuant to the course of dealing, the tax buyer was contractually obligated to have its lawyer check the first publication of each batch of notices and report any errors to the publisher, who would republish the corrected notices at no charge within the notice-serving deadline. The tax buyer failed to meet its contractual obligation as it did not have its lawyer review the publication which contained the first publication of the notice and inform the publisher of the error in the hearing date. The tax buyer’s failure to meet its own contractual obligation defeats its claim for breach of contract.
The court rejected the argument the course of dealing defense serves to exculpate it from any liability for publishing an inaccurate notice, in effect creating an implied exculpatory clause, which is ineffective if not in writing. The parties’ course of dealing did not create an implied exculpatory clause, relieving the publisher from any liability for its negligence. Rather, the parties’ course of dealing created mutual obligations on the parties.
Author
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Jim is a founding partner of Noonan & Lieberman. Jim has more than 25 years of experience in civil litigation on behalf of creditors, servicers, business and real estate owners.
