Opinion
1-22-1533
09-29-2023
CHICAGO TITLE LAND TRUST COMPANY AS SUCCESSOR TRUSTEE UNDER TRUST NUMBER 94367, Plaintiff-Appellee, v. THE BUREAU RIVER NORTH, LLC, Defendant-Appellant.
This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Cook County. No. 2021 L 3841 The Honorable Michael F. Otto, Presiding Judge.
JUSTICE LAVIN delivered the judgment of the court. Presiding Justice Fitzgerald Smith and Justice Coghlan concurred in the judgment.
ORDER
LAVIN JUSTICE
¶ 1 Held: The circuit court properly granted summary judgment to Landlord where it was undisputed that Tenant breached the parties' commercial lease agreement when Tenant defaulted on its obligations under the parties' contract and where the lease provided appropriate calculations for damages due to Landlord as a result of Tenant's breach. We affirm.
¶ 2 Chicago Title Land Trust Company as Successor Trustee under Trust Number 94367 (Landlord), filed the instant breach of contract action against its former tenant, the Bureau of River North, LLC (Tenant), after Tenant stopped making rental payments pursuant to the parties' commercial lease agreement. While Tenant admitted that it failed to make payments to Landlord in violation of its obligations under the lease, Tenant disagreed with Landlord about the appropriate amount of damages owed to Landlord under the terms of the lease. The circuit court ultimately entered summary judgment in favor of Landlord, awarding it $611,860.40, plus interest and attorney's fees and costs, in damages.
¶ 3 On appeal, Tenant argues that the lower court erroneously granted summary judgment to Landlord because a question of fact existed concerning the final amount of damages owed to Landlord under the terms of the lease. Additionally, Tenant asserts that the court awarded Landlord damages that were not contemplated by the lease. We disagree, and for the reasons that follow, we affirm the circuit court's judgment.
¶ 4 I. BACKGROUND
¶ 5 The following relevant facts were gleaned from the parties' pleadings, depositions, affidavits, and other supporting documents and were all presented to the court below.
¶ 6 On December 11, 2013, Landlord and Tenant entered into an "Office Building Lease" (hereafter, lease) for property located at 320 West Ohio Street in Chicago's River North neighborhood. The lease period was from April 12, 2021, to February 28, 2022. The parties subsequently amended the lease on five occasions. The first two amendments provided more rental space to Tenant, while the latter three dealt with "deferred rent," or rent that was unpaid, to Landlord due to hardships arising from the COVID-19 pandemic. The lease contained several provisions dealing with rent payments and damages in the event that Tenant stopped making payments to Landlord or defaulted on its contractual obligations.
Tenant leased Suite numbers 300N, 300W, 601E, 700W and 700NW at the subject property.
¶ 7 As will be discussed in more detail below, and as relevant here, section 2(c)(ii) of the lease provided that "all Rent shall be paid to Landlord without offset or deduction, and the covenant to pay Rent shall be independent of every other covenant in the Lease." Section 2(c)(iv) of the lease further provided that "any sum due from Tenant to Landlord which is not paid when due shall bear interest from the date due until the date paid at the annual rate of eighteen percent (18%) per annum." Section 2(d) of the fourth amended lease and section 3(e) of the fifth amended lease both stated that "[i]n the event of any uncured Default by Tenant under the Lease, in addition to any and all remedies that may be available to Landlord under the Lease, whether at law or in equity, the entire amount of unpaid Deferred Base Rent shall immediately become due and payable by Tenant to Landlord." Likewise, section 7 of the fifth amended lease stated that, upon termination, "Tenant shall pay to Landlord all amounts of unpaid Deferred Base Rent."
¶ 8 Moreover, Tenant's failure to pay rent constituted an event of default under section 16 of the lease. If Tenant defaulted on the lease, section 16(d) provided a formula for calculating remaining damages for the time period from default through the end of the lease:
"If Landlord terminates this Lease due to Tenant's Default, Landlord may recover from Tenant and Tenant shall pay to Landlord, on demand, as and for liquidated and final damages, an accelerated lump sum amount equal to the amount by which Landlord's estimate of the aggregate amount of Rent owning from the date of such termination through the Expiration Date plus Landlord's estimate of the aggregate expenses of reletting the Premises, exceeds Landlord's estimate of the fair rental value of the Premises for the same period (after deducting from such fair rental value the time needed to relet the Premises and the amount of concessions which would normally be given to a new tenant), both discounted to present value at the rate of five percent (5%) per annum."
Section 16(e) of the lease then provided, in relevant part, that "[a]ny and all remedies set forth in this Lease: (i) shall be in addition to any and all other remedies Landlord may have at law or in equity, (ii) shall be cumulative, and (iii) may be pursued successively or concurrently as Landlord may elect."
¶ 9 Tenant eventually stopped making rent payments, leading Landlord to send Tenant a "Notice of Default" on March 5, 2021. The following month, Landlord sent Tenant a "Termination Notice" based on Tenant's default, terminating the lease. That same day, Landlord filed the instant breach of contract complaint against Tenant, seeking damages in the amount of $611,860.39, which consisted of lost rent to date, plus future lost rent (less the estimated market rent) discounted to present value, less Tenant's $25,000 security deposit, in addition to attorney's fees and costs, applicable pre- and/or post-judgment interest and any "other relief *** the Court deems just." Meanwhile, Landlord released the premises in an effort to mitigate Tenant's damages.
¶ 10 In February 2022, Landlord moved for summary judgment, arguing it was entitled to judgment as a matter of law because Tenant admitted that it breached the lease and that the lease contained the appropriate methods for calculating damages owed to Landlord as a result of the breach. Additionally, Landlord asserted that it was entitled to damages, including the entire amount of unpaid rent and liquidated damages, among other damages, under various lease provisions. Landlord provided a couple amounts of damages based on differing calculations, but it noted that the court could calculate its own damages under the relevant lease provisions.
¶ 11 In response, Tenant admitted that, while it breached the lease, Landlord was only entitled to liquidated and final damages under section 16(d) of the lease (see supra ¶ 8), and not the entire amount of unpaid rent in addition to those damages. Simply put, Tenant argued that Landlord could only recover damages under section 16(d) of the lease, and not under any other provisions.
¶ 12 The circuit court ultimately agreed with Landlord that it was entitled to judgment as a matter of law and granted its summary judgment motion on April 15, 2022. The court awarded Landlord damages in the amount of $611,860.40, "plus interest from the date due until the date paid at the annual rate of eighteen percent (18%) per annum," plus $23,101.86, in attorney's fees and costs. A few months later, the court modified its summary judgment order to clarify that the interest owed through April 15, 2022, was $61,227.46, and that the statutory post-judgment interest of 9% applied. This appeal followed.
As noted by Landlord in its appellate brief, the $23,101.86, amount of attorney's fees and costs awarded by the circuit court did not include $7,930.10, in attorney's fees and costs that Tenant had previously paid to Landlord after Tenant and its attorney were sanctioned by the circuit court pursuant to Illinois Supreme Court Rules 137 (eff. Jan. 1, 2018) and 219 (eff. July 1, 2002).
¶ 13 II. ANALYSIS
¶ 14 A. Circuit Court's Summary Judgment Ruling
¶ 15 As stated, Tenant asserts that the circuit court erred in granting summary judgment to Landlord because there was a question of fact concerning the amount of damages owed to Landlord under the lease. Tenant further asserts that the court erroneously awarded Landlord damages that were not contemplated by the lease, namely, damages other than those awarded under section 16(d) of the lease. Before proceeding to the merits, however, we must address Landlord's claim that Tenant's statement of facts should be stricken for failing to comply with Illinois Supreme Court Rule 341(h)(6) (eff. Oct. 1, 2020), which is mandatory, not optional. Miller v. Lawrence, 2016 IL App (1st) 142051, ¶ 18. That rule provides that the appellant's statement of facts must be "stated accurately and fairly without argument or comment, and with appropriate reference to the pages of the record on appeal in the format as set forth in the Standards and Requirements for Electronic Filing the Record on Appeal." Ill. S.Ct. R. 341(h)(6).
¶ 16 Here, Tenant's statement of facts is set forth in a bullet-point fashion and contains argumentative, conclusory allegations like: "The Court construed the Lease such that Plaintiff was entitled to judgment for both unpaid pre-termination Rent and, in addition, to posttermination damages. This is contrary to the clear unambiguous language in paragraph 16(d) which provides for 'liquidated and final damages' as the total amount in damages owed to Landlord after Landlord exercised its option under that provision of [the] Lease." Tenant then alleged, as another example, that: "The Court determined that Plaintiff was entitled to unpaid pre-termination rent and erroneously found Section 16(d) of the Lease to be ambiguous. The Court incorrectly ruled that Section 16(d) only calculated post-termination damages, and not Plaintiff's liquidated and final damages." These allegations, some of which do not contain any reference to the record relied upon, clearly do not belong in Tenant's statement of facts. Accordingly, we will not consider any improper statements made by Tenant that are argumentative or without appropriate citation to the record on appeal. Beitner v. Marzahl, 354 Ill.App.3d 142, 146 (2004).
¶ 17 Turing to the merits, as Tenant's default is not in dispute, the only issue is whether, under the lease, Landlord was entitled to judgment as a matter of law, as well as damages from Tenant for unpaid rent, pre-lease termination, liquidated damages and post-termination damages stemming from Tenant's default. Summary judgment should be granted where, as here, the pleadings, admissions on file, depositions and any affidavits, construed strictly against the moving party, reveal no genuine issue of material fact so that the movant is entitled to judgment as a matter of law. Sandoval v. City of Chicago, 357 Ill.App.3d 1023, 1027 (2005). Additionally, construction of a clear and unambiguous contract, as is the case here, is a matter of law appropriate for summary judgment. USG Interiors, Inc. v. Com. &Architectural Products, Inc., 241 Ill.App.3d 944, 947 (1993). Our review of a circuit court's grant of summary judgment is de novo, and we will not reverse such a ruling unless we find that a genuine issue of material fact existed. Sandoval, 357 Ill.App.3d at 1027.
The parties here agree that the language employed in the lease is unambiguous.
¶ 18 The fundamental rules of contract interpretation are well settled. Thompson v. Gordon, 241 Ill.2d 428, 441 (2011). Likewise, the meaning of a written contract is generally a question of law, not a question of fact. Leahy Realty Corp. v. American Snack Foods Corp., 253 Ill.App.3d 233, 247 (1993). A court's primary objective in construing a contract is to ascertain and give effect to the parties' intentions. Thompson, 241 Ill.2d at 441. Where, as here, the contract is unambiguous, the intent of the parties must be determined solely from the language employed in the contract. Leahy Realty Corp., 253 Ill.App.3d at 247. "A court should look to the language of an unambiguous contract itself in ascertaining the intention of the parties and not to the construction placed upon it by the parties." Id. Furthermore, contracts should be construed as a whole so as to avoid rendering any provisions null and void. See id. at 246-47 (noting that "[c]ourts should avoid giving an interpretation to a provision that will nullify the clear and unambiguous language of another provision").
¶ 19 In addition, Illinois courts have typically found liquidated damages provisions to be valid and enforceable in a commercial lease contract if: (1) the parties intended to agree in advance as to the settlement of damages that might arise from a breach; (2) the amount of liquidated damages was reasonable at the time of contracting, bearing some relation to the damages which might be sustained; and (3) actual damages would be uncertain in amount and difficult to prove. Id. at 244.
¶ 20 Here, the parties' lease contained various provisions that Landlord could recover damages under for Tenant's breach of the contract. As set forth above, section 2(c)(ii) of the lease provided that "all Rent shall be paid to Landlord without offset or deduction, and the covenant to pay Rent shall be independent of every other covenant in the Lease." Section 2(d) of the fourth amended lease and section 3(e) of the fifth amended lease provided that, in addition to "any and all remedies that may be available to Landlord under the Lease.. .the entire amount of unpaid Deferred Base Rent shall immediately become due and payable by Tenant to Landlord." Section 7 of the fifth amended lease further provided that, upon termination, "Tenant shall pay to Landlord all amounts of unpaid Deferred Base Rent."
¶ 21 Finally, section 16(d) of the lease provided that, upon termination due to Tenant's default, Tenant shall pay to Landlord "liquidated and final damages," consisting of a lump sum amount of Landlord's estimate of the aggregate amount of rent owed at the date of termination through the end of the lease, plus Landlord's estimate of the fair rental value of the premises for that time period (less certain deductions provided in that provision). Notably, section 16(e) of the lease provided, as relevant here, that "[a]ny and all remedies set forth in this Lease: (i) shall be in addition to any and all other remedies Landlord may have at law or in equity, (ii) shall be cumulative, and (iii) may be pursued successively or concurrently as Landlord may elect."
¶ 22 Construing these lease provisions together, as we must, we cannot say that the circuit court erred in either granting summary judgment to Landlord or awarding it $611,860.40, plus interest and attorney's fees and costs, in damages due to Tenant's default. First, it is undisputed that Tenant breached the lease agreement when it defaulted on its contractual obligations. Second, as shown above, the liquidated damages provision did not preclude Landlord from obtaining other damages under different lease provisions, such as damages for unpaid rent owed at the time of termination or default, as well as pre- and/or post-termination damages. Section 2(c) of the lease expressly stated that Tenant must pay rent to Landlord and that that obligation was "independent of every other covenant in the Lease." Both sections 2(d) and 3(e) of the fourth and five amended leases, respectively, further stated that upon default by Tenant, deferred base rent was due to Landlord "in addition to any and all remedies that may be available to Landlord under the Lease." (Emphasis added.). Under section 7 of the fifth amended lease, Tenant, upon default, had to pay Landlord "all amounts of unpaid Deferred Base Rent." This language shows that Landlord could seek damages under multiple lease provisions.
¶ 23 While Tenant claims that Landlord was not entitled to damages under those lease provisions because section 16(d) of the lease provided for "liquidated and final damages," this ignores that the lease, a contract, must be construed as a whole. If we were to adopt Tenant's interpretation of the lease, then the above-stated lease provisions would be nullified. And if that were the case, why would the parties have drafted those provisions if only section 16(d) of the lease applied to calculate Landlord's damages? Regardless, we will not depart from well settled case law that requires us to construe the provisions together, and that is exactly what the lower court did in this case when it awarded damages to Landlord.
To the extent Tenant asserts that a question of fact existed as to the amount of damages Landlord was entitled to under the lease, thereby precluding summary judgment, Tenant already agreed that the lease was unambiguous; thus, summary judgment was appropriate. See USG Interiors, Inc., 241 Ill.App.3d 944, 947 (1993). To that end, Tenant points out that Landlord gave conflicting amounts of damages that it was entitled to in its discovery pleadings. This, however, does not establish a question of fact as Landlord was simply providing different calculations for the lower court to consider in awarding damages, and furthermore, some of the calculations were different because they either included or did not include Tenant's security deposit in the amounts.
¶ 24 Finally, it bears noting that the parties here agree that the language in the lease is clear and unambiguous. Thus, we may not resort to other aids of construction, such as the parties' own interpretations of the lease, in determining whether the lower court correctly awarded damages to Landlord under the relevant lease provisions. See Board of Education of Waukegan Community Unit School District No. 60 v. Orbach, 2013 IL App (2d) 120504, ¶ 13 ("Where the language of a statute or a contract is clear and unambiguous, we may not resort to other aids of construction."). As shown above, the language in the lease permitted Landlord to seek damages under various lease provisions. Accordingly, we conclude that the circuit court properly entered summary judgment in favor of Landlord and awarded it damages that were contemplated by the lease.
¶ 25 B. Landlord's Motion to Strike Portions of Tenant's Reply Brief
¶ 26 Last, we address Landlord's motion to strike portions of Tenant's reply brief, which was taken with the case. In its motion, Landlord asserted that Tenant's reply brief raised an improper argument, for the first time, concerning the total amount of pre-lease termination rent awarded by the circuit court. More specially, Tenant's reply brief asserted that the lower court's award of pre-lease termination rent, or unpaid rent, was $90,986.79, too high.
¶ 27 According to Landlord, Tenant first raised this argument in its reply brief, which is improper under Rule 341(h), (j). That rule provides that "[p]oints not argued are forfeited and shall not be raised in the reply brief, in oral argument, or on petition for rehearing." Ill. S.Ct. R. 341(h)(7). Furthermore, "[t]he reply brief *** shall be confined strictly to replying to arguments presented in the brief of the appellee and need contain only argument." Ill. S.Ct. R. 341(j).
¶ 28 In response, Tenant asserted that it was simply responding to the arguments set forth in Landlord's appellee brief concerning whether the circuit court awarded damages that were not contemplated by the lease.
¶ 29 While the arguments in Tenant's reply brief perhaps stem from the arguments in Landlord's appellee brief regarding what damages may be awarded under the lease and whether a question of fact existed as to the final amount of damages Landlord was entitled to, we do not construe Landlord's general references to those issues as an invitation for Tenant to reply to those arguments in detail with a never before mentioned amount of damages that it believes the circuit court improperly awarded to Landlord (i.e., damages that were $90,986.79, too high). We therefore grant Landlord's motion, and we strike those portions of Tenant's reply brief that are improper and will not consider them.
¶ 30 III. CONCLUSION
¶ 31 Based on the foregoing, the judgment of the trial court is affirmed.
¶ 32 Affirmed.