*1 principle participated wrongdoing may who has Street, recover damages resulting from the wrongdoing).” Vine 2d at percentage-based 297. this court has Where found that fee between and defendants violated the broad prohibition against sharing 22(A)(14), fee set forth section “ proper parties they course for the to be have placed left ‘where ” Street, themselves.’ Vine quoting Practice Manage ment, 3d at 955.
III. CONCLUSION For reasons, the above affirm the circuit order granting court’s defendants’ summary motion for judgment both counts of complaint.
Affirmed. CUNNINGHAM, JJ.,
THEIS and concur. GENESCO, INC., Plaintiff-Appellant, PARTNERS, v. 33 NORTH LASALLE
L.P., Defendant-Appellee. (3rd Division) 1—07—2782, First District Nos. — 3076 cons. 1—07
Opinion May filed *2 THEIS, J., concurring. specially Harris, Novack, Miller, Stephanie J. all of
Stephen Timothy J. and Novack LLP, Chicago, appellant. Macey of for & Duban, Piper L. of US of B. Lurie and Janice both Gerald DLA LLP
Chicago, appellee. court: opinion GREIMAN delivered the JUSTICE Genesco, Inc., order the circuit court appeals from the Plaintiff defendant 33 North LaSalle granting summary judgment favor of Partners, determined that doing, L.P In the circuit court so op- termination comply the terms of the lease failed to with not was entitled and further concluded tion that, strictly despite its failure appeal, plaintiff relief. On contends circuit court requirements, lease termination comply with plaintiff gave timely, failing grant equitable erred intentional; not notice; noncompliance was trivial and plaintiff’s oral order; result of the court’s suffer undue as a plaintiff will plaintiff’s as a result has not suffered harm and defendant noncompliance. 2004, plaintiff In dispute. not June underlying
The facts are sublease, February expired which into a entered (Credit USA, Suisse), space Boston, for retail Suisse First Credit time, the Street, Chicago, Illinois. At that 33 North LaSalle located at owned space at issue was building housing the and office retail (Associates). Accordingly, the sublease Associates, LLC Thirty-Three Associates plaintiff’s “Landlord” Suisse as defined Credit “Overlandlord.” plaintiff’s therewith, plaintiff prospective six-year
Simultaneous entered commencing expiration lease with Associates sublease. upon According terms, required operate a Johnston & Murphy shoe or sublet- prohibited assigning men’s store from ting prior The space without written consent from landlord. withhold, “Landlord,” however, unreasonably not or condi- could sublet, tion its so use of the assign long consent as the intended space establishment, “high-end, remained a full retail exclud- price” ing food clothing agencies. stores and travel The base rent $800,000. life of the approximately lease totaled terminate, The further provided plaintiff with an subject of which forms the appeal. basis this order to exercise required provide termination plaintiff was written notice 28, 2007, to the February “Landlord” no later than and simultaneously pay $7,500 of $30,000 fee, “time of the es- being separate sence.” provision, In a require- the lease detailed the notice ments, given delivered, such notice would be “deemed received, whether or on the date when personally delivered *** overnight courier service days following or two the date when *** deposited in the United States and properly Mail addressed” as instructed, “To Landord: & Suite Company, Golub North c/o Michigan Avenue, Chicago, Illinois Attention: Vice President/ *3 Properties, Commercial or such other address as Landlord shall designate by written notice.”
Plaintiff additionally agreement entered an with Credit and Suisse regarding Associates This agreement expressly sublease. related provided Associates’ consent for plaintiff the sublease and referenced prospective Associates’ addition, lease. In the related noted plaintiff that could exercise a option provided termination it gave “Landlord,” written notice to where “Landlord” was not defined.
According defendant, 30, to 2004, purchased on July it 33 North building LaSalle and succeeded Associates as landlord under lease. Defendant, however, did not notify plaintiff of its succession inter- 27, 2008, est February plaintiffs before of closing date termina- result, tion As a agreed, by way defendant that stipulation, argue would not that notice sent was to Associates defective. 2007, January plaintiffs agent late agent and defendant’s at- tempted renegotiate time, to the base rent rate. At that agent orally agent informed plaintiff defendant’s would exercise its negotiations proved Then, termination if the unsuccessful. 27, on February 2007, plaintiff’s agent orally notified defendant’s agent wished to termination fee was indicating along such
written notice 27, 2007, erroneously sent notice February forthcoming. On $7,500 the notice to As- copied to Suisse and a check Credit Avenue, sociates, Company, Michigan Golub at N. Suite care of & 7, 200, 2007, Suite On March Credit Suisse returned instead of 2000. and, response, Company contacted Golub & the check termination fee and to obtain W-9 tax determine where direct the form via subsequently received W-9 tax facsimile form. Plaintiff payable issued second check Properties from Mainland and therefore Properties corresponding ad- Associates and Mainland both result, check. As a the facsimile. later returned the dress on Associates declaratory judgment parties and both filed plaintiff filed a claim for This summary judgment. appeal follows cross-motions summary judgment in favor of granting order defendant. circuit court’s only if the judgment granted pleadings, should be Summary affidavits, liberally and in construed favor depositions, admissions and nonmoving genuine that no issue material party, demonstrate judgment as a mat moving party and that the entitled exists (West 1005(c) 2006); Thomson Learning, ter of 735 ILCS law. 5/2 — (2006). 621, LLC, Properties, 3d We Olympia v. de legal trial court’s decisions novo. review the However, trial extent that the court 3d determining its discretion in exercised is entitled to proper, that the trial court’s decision defer we believe Seymour See ence will consider it for an abuse discretion. Chicago, Savings Trust & Bank Harris (1994) (although the reviewed de novo the trial court’s order court trial summary the issue of whether the granting judgment, deciding grant whether equitable powers exercised discretion); for an abuse of see also injunctive relief was reviewed Casualty & Insur Property Construction Co. v. Northbrook Krusinksi (2001) (whether apportion Co., grant ance discretion). reviewed abuse of ment matter to be for an decision, general supreme court announced In a seminal comply with the terms of an strictly rule that a lessee must Creek Coal 550-51 Sunday extend a lease. Dikeman v. years the Dikeman court stated: ago, Over *4 act performance the of an is as es- of law the time for “In a court and, passed, The time not any other of the contract. part sential as lost, waived, so that there could be no having been a Equity law. maintains somewhat made in action at defense necessarily a rule, not of the essence of time is different —that and a agreement, of an contract; and if it is not of essence cause, equity may acted in faith in a good meritorious however, grant right, relief. Parties have a to make their own contracts, and, they if intend that time shall be of essence contract, express either form their subject so, equity because the matter it treat makes a will parties as of agreement. the essence and hold the to their A court it, parties is bound made contract authority agree has no to substitute for it another and different ment, particular necessary language to make the time of essential, performance justice if right the individual case An agreement demand it. must be with as unless complied made just some stipulation is waived or there is a non excuse for Dikeman, compliance.” 550-51. additionally applied general
Courts have since require rule to with to terminate lease. See Thomson Learning, Inc., 365 627; 3d at see also Gold Standard Enterprises, Inc. v. United Investors Management (1989). 840, 844 The rationale behind the rule is lessee should strictly agreed-upon held to the terms of the contract where the parties to generally commercial leases sophisticated are and the lessor typically receives no consideration for agreeing option. Thomson Learning, 629-30; Corp. Linn Bank, LaSalle National
In the
bar,
case at
question
there is
failed
strictly comply
option.
with the termination
In order to
option, plaintiff
required
to mail its written notice
designated landlord along with a
of the
portion
termination fee at
days
least
prior
February 28,
two
2007. Plaintiff concedes that writ
ten
27, 2007,
notice was not
February
mailed until
and the termina
tion fee was improperly
The parties’
executed.
termination
expressly provided that time
was of
essence and courts are bound
interpret
Dikeman,
the contract
See
as written.
Plaintiff, however, contends that its failure should be excused provided where it timely, oral notice of intent to exercise According plaintiff, agent verbally because its notified agent day defendant’s of its prior intent one to the date writ- due, ten notice was it substantively complied require- with the notice ment. adopt We decline invitation to a per se actual notice rule and find options no reason to treat cancellation different than options; instead, extension we agree with the trial court the Thom- son actual, just Inc. court that verbal notice “is another way highlighting Tenant’s to strictly comply failure Cancel-
120 Inc., 633; App. 365 Option.” lation cf. (1989) (where Vole, 181 3d 1019 Georgacopoulos, Inc. v. violation, that, written the context of a lease court held error it was sent via despite notice sufficient a technical that not mail). registered its
Nevertheless, plaintiff this should exercise contends that court noncompliance equitable to excuse based on the powers actual, notice; trivial; oral its mistake was its plaintiff provided noncompliance negligent; rather will suffer was not intentional but lease; if not excused from the defendant was serious harm and noncompliance. by plaintiffs harmed previously stated, supreme explained court in Dikeman
As
must be
with made unless some
agreement
complied
“[a]n
as
stipulation
just
non-compliance.”
there is
excuse
Dike
is waived or
number
man,
interpreted
Dike-
Notwithstanding, recogniz case cited which only provides support able the ability grant equitable relief and a test for when equitable proper relief is is Thomson Thomson Learning, Second Learning, District provided: equitable relief, “To be strictly entitled a lessee fails to comply to cancel or extend a commercial lease must (1) strictly at a minimum establish: complying in was (2) slight; the lessee would suffer undue if compli strict (3) excused; ance were not and the lessor prejudice would not suffer if Learning, Inc., were excused.” Thomson Perillo, Ill. App. citing §2.15, 3d at 1 J. Corbin on Contracts (rev. 1993). Consequently, despite concerns, our analyze we the trial whether provided “equitable plaintiffs strictly relief” failure to comply pursuant with the terms the termination provision to the Inc. test.
Primarily, conclude that plaintiffs errors do rise to the “just level of as initially applied excuse” stated in Dikeman in progeny. various forms in its Unlike the lessees in Providence Insur Standard, Co. ance and Gold the instant cannot demonstrate its noncompliance resulted from its minor carelessness or negligence in combination with that another. In Providence Insur Co., days prior ance the lessee mailed the written two requisite notice date, to the final option Saturday, yet which fell on a the lessor did not actually pick post notice up following from the office until Monday.1 Co., There, Providence Insurance 3d at 722. trial court noncompliance excused lessee’s strict on the basis that provided
1The complete days that service five was considered after mailing upon receipt, Co., earlier. whicheverwas ProvidenceInsurance 3d at 722. notice day on which the way precise to know the there was one-day delay did not post office box and the deposited in the lessor’s in Providence Insurance harm the lessor manner.
3d at 723-24. Standard,
Moreover, requisite the lessee mailed the notice Gold day; next date and it was delivered the days prior to the due several insufficient and thus however, affixed the lessee was postage Standard, the notice. Gold formally the lessor never received The court excused the lessee’s App. 3d at 845-46. Gold Standard that the lessee had sent as an accident on the basis noncompliance they were received without previous postage letters with the same (in Standard, making its incident. Gold determination, that the les additionally the court considered delay). sor was not harmed bar, solely made a series of er-
Contrarily, in the case at in its delay, which were then exacerbated resulting rors the initial failed to contact its plaintiff’s agent attempted specifically, cure. More compounded executing the termination legal advisors Instead, resting lease. by failing parties’ error to read the day prior the notice one plaintiffs agent mailed experience, unrelated agreed date, days prior required by as its due instead of two Moreover, agent mailed the notice of the lease. terms under the sublease fee to the landlord executed the lease termination Plaintiff at- named in the lease. opposed to the landlord copy of the notice was justify by averring this error tempts interest, Associates, and that predecessor sent to defendant’s landlord because of the agent regarding appropriate confused *7 termina- agreement referencing the language in the related The remains that persuaded. are not option tion the lease. We lease; therefore, any under the confu- exercising option was plaintiff necessary to exercise that regarding appropriate steps sion lease, consulting the actual which resolved should been directly despite not do the fact that she agent admittedly did plaintiffs prepared in the lease’s termination language of the quoted notice. errors, returned its when Credit Suisse compounding
Further fee, agent contacted plaintiff’s check for the termination to different location ascertain manager at a property defendant’s manager property The of the landlord. name and address appropriate document via facsimile requested a tax subsequently plaintiff sent appropriate was the corresponding address assumed that plaintiff to consult the plaintiff’s failure cannot excuse Again landlord. defendant Accordingly, although confusion. resolve actual lease to time given period, plaintiff oral notice within the prescribed subsequent negligence that its carelessness or at- demonstrated justly to tempting comply with the terms the lease should be excused. argues
Plaintiff court excuse equitably further that this should its hardship will if the lease noncompliance because it suffer undue Primarily, plaintiff remains in effect. to this court attempts convince that it will suffer losses of over million if lease is not forfeited. $1 because, Simply stated, loss, plaintiff is incorrect to endure such a required premises would be life lease at issue for the lease and presumes operate would continue to store expected Plaintiff, however, with the loss. fails earnings’ acknowledge the fact that it breach could the lease and abandon the store, thereby forcing mitigate damages. defendant its See 735 (West 2006). situation, ILCS In that plaintiffs potential 5/9 —213.1 loss agreed lease, could not exceed the of the balance rent for the $800,000. namely, approximately
Still appealing, plaintiff attempt more could assign sublease or complied another so as it long with the relevant lease, nonfood, terms namely, finding high-end, nonclothing or agent nontravel retail attempt tenant. Plaintiffs to argue that a or assignee subtenant required operate would be a Johnston & Murphy plainly shoe store is inaccurate where the terms the lease require plaintiff operate business, yet provides parameters potential assignees. or subtenants by plaintiffs
We are further not argument convinced ac- tion would eliminate its undue hardship because the rent for the leased space well sophisticated above market. is Plaintiff commercial retail negotiated lessee that agreed terms of the lease. The fact that it on gambled the market and entered lease four years prior to its upon commencement is not a basis which we will grant equitable simply gamble. relief because lost its purported
Plaintiffs distinguishable “special from the resulting granting circumstances” relief in Linn. In despite strictly comply the lessee’s failure to terms of a heavily renewal the Linn court relied the fact that the lease required the lessee to make improvements subject substantial to the property exchange Linn, for the at 483-84. The Linn distinguished those facts from in Dikeman on the basis they did “not present the kind of case in which the merely renew privilege right [was] with no corresponding privilege Linn, Rather, the lessor.” 3d at 484. the lessors *8 “allegedly Linn an extremely received valuable for consideration made and right improvements to have
granting options —the the lease improvements at the conclusion of right keep all such Linn, 3d at 484. App. thereof.” any term or extension bar, that it will suffer In the cannot demonstrate case at given to as a of “valuable consideration” undue result are exchange the termination We providing defendant $30,000 compare termina plaintiffs persuaded by attempt not $200,000 property under the required tion fee to the fact that by made the lessee in Linn. addition improvements in our equate fee not to “valuable consideration” the termination does vastly in that the instant the situations are different opinion, opting of out of a charged presumably fee for the convenience necessary steps requiring to take all the six-year lease and defendant lessee in Linn was vacancy, find a to fulfill that whereas the tenant improvements space to the leased while required to make substantial two improvements approximately only benefitting from those Instead, more Linn, the instant case years. 3d at 484. Terminals, Inc., the court of closely resembles facts Ceres “nothing represented any suffered the lessee concluded that losses alleged losses costs which could be more than normal business option.” Ceres a lease lessee has failed to exercise any who Terminals, Inc., Accordingly, we conclude 3d at 405. from excused equitably that it should plaintiff failed establish terms of failing strictly comply hardship. endure undue because will argument persuaded by plaintiff’s are not
Finally, we as a not suffer harm proper is where defendant did equitable relief delayed notice. Based on result hardship, need not consider or undue just established excuse provided suffer if we prejudice defendant would whether (a must lessee relief. Thomson requirements to be entitled to minimally establish all three relief). degree special Rather, to establish the “it burden the court equitable powers necessary to invoke circumstances Terminals, Inc., balancing Ceres equities occurs.” before 3d at 406. of the circuit court Cook judgment we affirm the Accordingly, County.
Affirmed.
QUINN, P.J. concurs. THEIS, concurring: specially JUSTICE *9 case, majority In this should not excuse equity finds that compliance op- from strict of the termination with terms agree majority’s reasoning holding, tion of its I with but lease. separately requests. to explain equitable write will explain why equitable principles I also these do not in aid this case. may
It is a its equitable powers well settled that court exercise to relieve a party compliance requirements exercis ing an in agreement a lease there been an unavoid accident, fraud, surprise, Pomeroy, able 2 Equity or mistake. J. (5th §451, 283; §453b, 1941); Jurisprudence at at 296-97 ed. F.B. Stein, 47, (1922); v. 619, 624, Fountain Co. 97 Conn. see 118 A. 49 also 546, 551, 864, Dikeman Sunday Co., v. Creek Coal 56 865 N.E. example, equitable powers For a court would exercise its relieve strict where a has made an honest effort to comply the requirements a a contract and there was miscar riage of §453, the mail. See 2 J. Pomeroy, Equity Jurisprudence at 292 1941) (5th (discussing ed. in mistake and accident the context of arising pay rent); forfeitures from the see failure to also Gold Standard Enterprises, Inc. v. Co., United Investors Management App. 182 3d (1989) 840, 845-46, 636, 538 N.E.2d (post 639-40 office failed deliver because, letter party mailing unbeknownst to option, letter exercise it lacked postage); sufficient Providence Insurance La Co. v. Salle Bank, 720, 723, 238, National 455 N.E.2d 240-41 (1983) (although may letter post have been in lessor’s office box on Saturday date, due pick up lessor did not from letter post Monday, office box until day which was first business following date). the due
It is also well
equitable
settled that a court will not exercise its
powers to
a party
gross
negligence
relieve
or willful
failing
timely and properly
exercise an
or
renew terminate a lease. 2
(5th
Pomeroy, Equity
§453b,
1941);
J.
Jurisprudence
at 296-97
F.B.
624,
Fountain,
However,jurisdictions
More ago, than 100 in Dikeman v. Coal Sunday Creek 551, 546, 864, (1900), supreme 56 N.E. our held stipula “some an as written unless court must enforce for non-compliance.” excuse just been] or there [has tion waived case, no explain in that there was then on to The court went complainant neglected “fraud, on account of which accident or mistake explanation or excuse assign[ed] to avail itself Dikeman, 184 agent.” own negligence of its except for the “fraud, ac excuse” such as “just at 865. Absent a Ill. at cident, mistake,” N.E. court thus declined exercise its Dikeman, Ill. at forgetfulness.” mere against to “relieve powers Kriebel, 145-46 865; Moore v. 742 So. 2d 56 N.E. see also (Miss. 1999) upon to reach relying Dikeman (interpreting Thus, jurisdictions with those holding). this same Illinois sided “mere maintaining negligence will never relieve forgetfulness” failing 49; Fountain, 118 A. at see agreement. F.B. 97 Conn. See n.4, N.E.2d at
also therein). (and n.4 cases cited
However, equitable jurisdictions other have relied on the numerous 15 to reach a different result. “equity that abhors forfeiture” maxim (4th 2000); Lord, §46.11, 437-38 ed. see at R. Williston on Contracts Andrews, n.4 from n.4, (citing 244 P.3d at 15 cases also 205 Ariz. at negligent interventions for or inadvert jurisdictions allowing equitable terms of The strictly comply option). ent failures much abhors so position equity behind this forfeiture rationale beyond a time time established equity party so that would allow egregious party in order from an perform a contract to save (4th §46.11, 437-38 Lord, on at forfeiture. R. Williston Contracts 2000). However, potential not all forfeitures warrant ed. (4th §46.11, ed. Lord, 15 R. on Contracts at 439-41 relief. 2000). Williston determine would a court degree prompt To what of forfeiture intervene, delay culpability weigh court must equitably 15 R. degree potential delaying against the forfeiture. party (4th 2000). §46.11, Lord, at 440-41 ed. Where Williston on Contracts forfeiture, also act to another equity may prevent has been there §2.15, Perillo, on Contracts unconscionable result. J. Corbin (1993). test country three-part applied
Courts across
compliance in order to
strict
equity
when
should relieve
determine
Lord,
result.
R.
Willis-
unconscionable
a forfeiture or other
prevent
(4th
Perillo,
2000); 1
§46.12,
461-62
ed.
J.
Corbin
ton on Contracts
(1993).
Contracts,
According to Corbin on
§2.15, at 203
on Contracts
where:
excused
the terms of the
compliance
strict
(2)
(1)
delay
prejudice
did not
slight;
in
notice was
(3)
party by change
position;
grant
other
the failure to
to make literal enforcement of the
would result
such
Perillo,
renewal
1 J.
provision unconscionable.
Corbin
Contracts
§2.15,
first articulated
at 203
The Corbin test was
F.B.
Fountain,
627,
50.
624, 49; Pomeroy, Jurisprudence Equity A. also 2 J. at see (5th 1941). at 296 ed. Linn, to use the Appellate the Illinois Court continued
Since compliance determining whether to excuse strict three-part test See, App. option. e.g., terms of an with the Terminals, 324; Chicago City at Ceres 3d at 850 N.E.2d 399, 404-05, 735, 738 453 N.E.2d Bank & Trust Ill. 3d Insurance, (1983); see Providence also (not test, Linn for the applying three-part citing but N.E.2d at 240 “proper compliance that strict be excused under proposition stipulated failure to notice provide circumstances” even where the There has been Illinois solely negligence). is due to the lessee’s Thus, point Dikeman. the hold Supreme Court decision on this since Dikeman, ing Illinois courts will never exercise their timely properly negligent or careless failures to powers relieve terms of is still the law. comply with the Here, plaintiff properly it failed to negligently concedes that Further, plaintiff question. exercise its to terminate the lease in relief, grounds such has not asserted a traditional duress, Therefore, is fraud, mistake, Dikeman or accident. because law, plaintiff’s negligent still the court should not excuse noncompliance.
However, three-part adopted, if the test I would reach even were either the or Corbin version the same conclusion. Under Williston test, or three-part must be a risk of forfeiture clear there party result before the court will relieve other unconscionable §46.12, Lord, at 461-62 compliance. R. on Contracts Williston (4th §2.15, 2000); Perillo, 1 J. Corbin on Contracts at Terminals, 117 requirement, this this court Ceres Consistent with party’s at did not excuse a failure 453 N.E.2d have suffered exercise an where that would failure. more than normal costs as a result nothing business or Here, a forfeiture plaintiff has not claimed it will suffer not excused. compliance result if strict were other unconscionable Terminals, Rather, only suffer the normal as in Ceres will by any lessee that has failed business that would be suffered costs Terminals, a lease See Ceres Therefore, 405, 453 under either Williston N.E.2d at test, relieved plaintiff should not be three-part of the Corbin version Ac requirements of the contract. of strict affirming judg majority’s I conclusion cordingly, agree court. ment of circuit