The Illinois Supreme Court just released its highly anticipated opinion in Channon v. Westward Management, 2022 IL 128040 (November 28, 2022). The case examined a single question: “Whether section 22.1 of the Condominium Property Act provides an implied cause of action in favor of a condominium unit seller against a property manager, as agent of a condominium association or board of directors, based on allegations that the property manager charged excessive fees for the production of information required to be disclosed to a prospective buyer under that statute.”

The Appellate Court had found a private right of action exists against a management company charging Sellers excessive fees to obtain the required 22.1 disclosures, and Westward Management Company appealed. Both courts applied the four-part test for determining whether a statute creates a private right of action by implication that was set forth in Metzger v. DaRosa, 209 Ill. 2d 30, 36 (2004). The Metzger test examines whether (1) the plaintiffs are members of the class the statute was intended to benefit, (2) the statute was designed to prevent the plaintiffs from suffering the injury they incurred, (3) the statute’s purpose is consistent with the creation of a private right of action, and (4) it is necessary to imply a private right of action to provide an adequate remedy for the statutory violation.

The Supreme Court found the plaintiffs’ claims did not satisfy the first prong of the test because, it said, sellers are not the primary intended beneficiary under section 22.1 – rather, the law is intended primarily to protect buyers of condominium units by providing them full disclosure. While this reasoning certainly applies to subsections (a) and (b) of the Act (covering what must be produced to buyers and a 30-day window in which to product it), the Supreme Court engaged in what can only be described as outcome-based judicial reasoning in dealing with the very inconvenient fact that subsection (c) shows that sellers were primarily intended to benefit from its provisions that associations (and their assigned agents) may only charge “a reasonable fee for covering the direct out-of-pocket cost of providing such information and copying.” Anyone who has sold a condo knows that associations and their management companies use the required 22.1 disclosures to make obscene profits from sellers who have no choice but to pay.

So how did the Supreme Court get around this inconvenient fact to achieve the outcome it clearly wanted? Did they engage in a lengthy, well supported examination of the statute’s language? Hardly. The entire “judicial reasoning” by Illinois’ highest court came down to one line of the weakest legal reasoning seen in recent memory:

Although the [Plaintiffs] maintain that this limit is plainly intended to benefit sellers by making the requisite documents more affordable for them to obtain, that language can just as readily be viewed as aiding potential buyers by ensuring that information critical to their purchasing decisions is readily available.

Come again? A provision limiting the charge an association can assess for documents the seller is required to provide is actually intended to aid potential buyers (who have to pay nothing for the documents) by ensuring the information is “readily available”? Exactly how a provision so clearly intended to ensure associations aren’t financially raping sellers makes documents “readily available” the court – unsurprisingly – does not address because it cannot actually defend such a vapid statement.

This is the kind of judicial “reasoning” that leaves the public (and decent lawyers) questioning the validity of our current judicial system. If courts can simply gloss over inconvenient facts on their way to achieving a predetermined outcome, we do not have justice, we have judicial fiat. That this decision was unanimous is truly disappointing.

This is a wake up call for our legislature to immediately amend the Condominium Act to provide such a private right of action against any party charging excessive fees to provide any documents required under the Act, not just under section 22.1.

North Shore Property Law was not involved in this litigation.