Infinity Broadcasting Corp. of Illinois v. Prudential Ins. Co. of America

• Decision Date: 06 April 1989
• Docket Number: No. 87-2341,87-2341
• Citation: 869 F.2d 1073
• Parties: INFINITY BROADCASTING CORPORATION OF ILLINOIS, Plaintiff-Appellant, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1073

869 F.2d 1073

INFINITY BROADCASTING CORPORATION OF ILLINOIS, Plaintiff-Appellant, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellee.

No. 87-2341.

United States Court of Appeals Seventh Circuit.

Argued Feb. 10, 1988.

Decided March 9, 1989.

Rehearing and Rehearing In Banc Denied April 6, 1989.

Donald C. Clark, Jr., McDermott, Will & Emery, Chicago, Ill., for plaintiff-appellant.

Thomas F. Geselbracht, Rudnick & Wolfe, Chicago, Ill., for defendant-appellee.

Before CUDAHY, EASTERBROOK and MANION, Circuit Judges.

MANION, Circuit Judge.

Infinity Broadcasting Corporation of Illinois (Infinity) sued its landlord, the Prudential Insurance Company of America (Prudential) for declaratory relief. Infinity claimed that Prudential's construction of a 64-story building next to the building in which Infinity was a tenant would distort and destroy a significant amount of Infinity's radio transmissions, and that such action constitutes (1) a breach of the implied covenant of quiet enjoyment, and thus a breach of Infinity's lease and license; (2) constructive eviction; and (3) an anticipatory repudiation of the lease and license. The district court dismissed Infinity's complaint and amended complaint under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief could be granted. Infinity appeals these dismissals, and we affirm. ¹

I.

Prudential owns a 41-story office building named Prudential Plaza. In 1971 Plough Broadcasting Company obtained a lease for space on the fortieth floor of the building, and a license to install and use a broadcast antenna on the tower of the building. In 1981 Plough exercised its right for a ten-year extension, and in 1984 assigned that lease and license to Infinity. The lease extended through May 31, 1991, exclusively for the operation of a radio broadcast station.

Prudential announced in March of 1985 that it would build a 55-story office building, named Two Prudential Plaza, next to the original Prudential Plaza. It later increased Two Prudential Plaza's planned height to 64 stories. Infinity informed Prudential that the building would block its radio frequencies, distorting reception for some listeners and preventing reception for some others. ² After some delay, Prudential denied any obligation to protect the broadcast signals, but stated a willingness to meet with Infinity to discuss the problem. Although the parties did meet, they were unable to resolve their differences, and Infinity filed this action. ³

On February 5, 1987, Judge Nordberg, in a well-considered opinion, dismissed Infinity's original complaint pursuant to Fed.R.Civ.P 12(b)(6). On July 16, 1987, Judge Nordberg dismissed Infinity's amended complaint on the same basis. On appeal, Infinity presents the same three claims it raised to the district court: (1) breach of the covenant of quiet enjoyment; (2) constructive eviction; and (3) anticipatory repudiation.

Prudential initially challenges Infinity's standing to sue. Since Prudential's original contract was with Plough, and since Prudential did not consent to Plough's assignment to Infinity, Prudential alleges that Infinity lacks standing. We disagree. Even though the lease provision required such consent, Infinity still has a basis to file suit. As the district court found, the lease does not absolutely prohibit all assignments, and Prudential did not object to the assignment. Indeed, Prudential has accepted rental payments of at least $24,000 per year from Infinity and treated Infinity as a tenant since that assignment. Prudential therefore cannot now claim Infinity lacks standing to sue under the lease. Woods v. North Pier Terminal Company, 131 Ill.App.3d 21, 86 Ill.Dec. 354, 356, 475 N.E.2d 568, 570 (1st Dist.1985) (if landlord does not treat assigned leasehold as void, restrictions on assignment are deemed waived); Kaybill Corporation, Inc. v. Cherne, 24 Ill.App.3d 309, 320 N.E.2d 598, 607 (1st Dist.1974) (landlord waived his right to prohibit assignment, and gave implied consent, by accepting rent from assignee).

After determining that Infinity had standing, the district court concluded that there was no cause of action under any of Infinity's three theories which would constitute a real controversy warranting declaratory relief, and therefore granted Prudential's motion to dismiss. When reviewing a trial court's dismissal of a claim under Fed.R.Civ.P. 12(b)(6), we assume the well-pleaded allegations of the complaint are true. First Interstate Bank of Nevada v. Chapman & Cutler, 837 F.2d 775, 776 (7th Cir.1988). A plaintiff fails to state a claim under Rule 12(b)(6) only if he "can prove no set of facts upon which relief may be granted." Id. (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). All reasonable inferences must be drawn in the light most favorable to the plaintiff. Gomez v. Illinois State Board of Education, 811 F.2d 1030, 1039 (7th Cir.1987).

Granting a declaratory judgment is within the district court's sound discretion. Cunningham Brothers, Inc. v. Bail, 407 F.2d 1165, 1169 n. 3 (7th Cir.), cert. denied, 395 U.S. 959, 89 S.Ct. 2100, 23 L.Ed.2d 745 (1969). We may only substitute our own judgment if the exercise of that discretion in denying the declaratory relief was "erroneous." Id. A plaintiff will have raised a cause of action for a declaratory judgment if "the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Preiser v. Newkirk, 422 U.S. 395, 402, 95 S.Ct. 2330, 2334, 45 L.Ed.2d 272 (1975) (quoting Maryland Casualty Company v. Pacific Coal and Oil Company, 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941)).

II.

A. Covenant of Quiet Enjoyment

The primary issue in this case is whether the interference with Infinity's radio waves from the construction of Two Prudential Plaza constitutes a breach of the covenant of quiet enjoyment. Such a covenant is implied in all leases in Illinois. Blue Cross Association v. 666 North Lake Shore Drive Associates, 100 Ill.App.3d 647, 652, 56 Ill.Dec. 190, 193, 427 N.E.2d 270, 273 (1st Dist.1981). The covenant is breached when the lessor substantially interferes with the lessee's "use and enjoyment of the premises." Id.

Infinity's claim is essentially one for access to the air space surrounding Prudential Plaza. To find that Prudential has interfered with Infinity's right to quiet enjoyment of the premises, we would in effect have to find that Infinity has a right to the use of the air waves extending across the space on which Two Prudential Plaza is being constructed, at least as against use by Prudential. As there is no such easement expressly granted in the lease, we would have to find an implied easement for radio wave transmission with which Prudential could not interfere. The Illinois courts have not directly addressed the issue of easements for radio frequencies, but the Illinois Supreme Court has recognized an analogy between television waves and easements for light and air. People ex rel. Hoogasian v. Sears, Roebuck and Company, 52 Ill.2d 301, 287 N.E.2d 677, 678, cert. denied, 409 U.S. 1001, 93 S.Ct. 323, 34 L.Ed.2d 262 (1972). We believe such an analogy is equally applicable here. Although the Illinois case law in this area is sparse, it does show that Illinois courts will not imply an easement for light or air in a lease.

The district court's decision relies primarily on Keating v. Springer, 146 Ill. 481, 34 N.E. 805 (1893), and Baird v. Hanna, 328 Ill. 436, 159 N.E. 793 (1927), and we agree that these cases provide the most relevant Illinois precedent. In Keating, the plaintiff-tenant needed strong light for his marble manufacturing and polishing business. The lease contained an express covenant for the unobstructed passage of light, and therefore the Illinois Supreme Court allowed evidence regarding the building by the landlord of a structure which would block light from the tenant's windows. However, the court based its holding on the express covenant, and went on to clarify its decision, stating that an implied easement for air and light is

inapplicable in a county like this, where the use, value, and ownership of land are constantly changing. Air and light are the common property of all.... The prevalent rule in the United States is that an easement in the unobstructed passage of light over an adjoining close cannot be acquired by prescription ... [and will not be implied] from the necessity of such easement to the convenient enjoyment of the property.... It follows that a landlord will not be liable for obstructing his tenant's windows by building on the adjoining close, in the absence of any covenant or agreement in the lease forbidding him to do so.

34 N.E. at 807. ⁴

In Baird, the owner of two lots sold them to two different people. One lot contained a building and photography business. The other lot's owner then leased the lot, and the lessee began constructing a building. The Illinois Supreme Court held that the buyer of the lot with the photography business could not get an injunction against the tenant of the other premises based on the need for light for his business, reaffirming that "the law of implied grants and implied reservations shall not be applied to easements for light and air." 159 N.E. at 794. The court reasoned that

[t]he simplest rule, and that best suited to a country like the United States, in which changes are continually taking place in the ownership and in the use of lands, is that no easement of light can be acquired without express grant on an interest in, or covenant relating to, the lands over which the right is claimed.

Id.

Infinity's brief relies heavily upon Bloomington Lodge v. Roland, 217 Ill.App. 435 (3d Dist.1920), for the proposition that an easement for light and air, and thus by analogy...