Courts recognize the sanctity of contracts. Whatever parties agree to generally will be enforced, in the absence of fraud, illegality or violation of public policy. Courts will not evaluate the merits of an agreement and generally will not rewrite an agreement. But what happens if the writing reflecting an agreement is inaccurate? In such situations, a court may reform the writing to conform to the parties’ intentions. Consider the recent Illinois case of Schaffner v. 514 West Grant Place Condominium Association, Inc.
Schaffner involved a dispute over parking spaces. Anyone who visits Chicago in the winter knows how Chicagoans cherish their parking spaces, as evidenced by garbage cans, pieces of furniture and every other imaginable item which “reserve” spaces cleared by snow shovelers.
Schaffner owned unit 103 in a three-unit condo building. The building had three enclosed and two outside parking spaces. Each unit had an enclosed space assigned to it. The plat attached to the recorded condominium declaration did not depict any outdoor parking spaces. The text of the declaration made no reference to outside parking spaces. Owners of units 101 and 102 claimed the two outdoor spaces were limited common elements reserved for their units. However, as Justice Wolfson noted, “[t]hree into two don’t go – not when the three are the only unit owners. . . and the two are outside parking spaces. . .”
Justice Wolfson noted that an action for reformation is an action to change a written instrument so that it conforms to the original agreement between the parties. “What is sought to be reformed is not the understanding between the parties, but rather the written instrument which inaccurately reflects it.” To obtain reformation, the complaining party must allege: (1) the existence and substance of an agreement between the parties and the identity of the parties to that agreement; (2) that the parties agreed to reduce their agreement to writing; (3) the substance of the written agreement; (4) that a variance exists between the parties' original agreement and the writing; and (5) the basis for reformation (e.g., mutual mistake). Parol, or oral, evidence is admissible to show the true intent of the parties.
Owners of units 101 and 102 alleged that: (1) the developer and original owners of units 101, 102, and 103 agreed that units 101 and 102 would have the exclusive right to use the two outdoor parking spaces and that unit 103 would not enjoy any use of the outdoor parking spaces; (2) the developer and the unit owners agreed to reduce their agreement to writing; (3) unit 101 and 102 owners set forth the terms of the declaration parties’ agreement and that the writing did not reflect the true intention of the parties; (4) a variance existed between the declaration and the original agreement between the developer and the unit owners, as evidenced by the omission of the outdoor parking spaces in the declaration; and (5) the wrong maps/surveys were erroneously attached to the declaration. These allegations were sufficient to plead a case for reformation. As a result, the case was remanded to the trial court, where the allegations could be reviewed, subject to proof by clear and convincing evidence.
Attention to detail – by the parties and their attorneys – would have avoided the issues raised in the litigation described in this article.