For your animate() function, you can pass in a function to execute when the animation is completed. You can't "fade" your checkbox, but you can un-check it.
$(function(){
$(document).ready(function () {
$("#check1").click(function () {
$("#check1").toggleClass('checked');
$("#check2").removeClass('checked');
$("#groundDiv").animate({
"top": "0px"
}, 1000, function () {
//put code here to un-check the box
});
});
});
