American Apartment Management Co., Inc. v. Phillips

• Decision Date: 11 July 1995
• Docket Number: No. 1-94-2259,1-94-2259
• Citation: 274 Ill.App.3d 556,653 N.E.2d 834
• Parties: , 210 Ill.Dec. 639 AMERICAN APARTMENT MANAGEMENT COMPANY, INC., as Agent, Plaintiff-Appellant, v. Vickey PHILLIPS, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 834

653 N.E.2d 834

274 Ill.App.3d 556, 210 Ill.Dec. 639

AMERICAN APARTMENT MANAGEMENT COMPANY, INC., as Agent, Plaintiff-Appellant, v. Vickey PHILLIPS, Defendant-Appellee.

No. 1-94-2259.

Appellate Court of Illinois,

First District, Second Division.

July 11, 1995.

Rehearing Denied July 27, 1995.

Richard W. Christoff, Stanford Kahn, Ltd., Chicago, for appellant.

Rebecca Zietlow and Richard M. Wheelock, Legal Assistance Foundation of Chicago, Chicago, for appellee.

Justice DiVITO delivered the opinion of the court:

Plaintiff American Apartment Management Co., Inc. (American), filed this action for possession of an apartment pursuant to the forcible entry and detainer statute. The suit was predicated upon defendant Vickey Phillips' (Phillips) alleged breach of certain provisions of her lease. The circuit court granted Phillips' motion for summary judgment, and American appealed. For reasons that follow, we affirm.

On May 14, 1992, American as lessor and Phillips as lessee entered into a written lease agreement for the premises commonly described as 6358 South King Drive, Unit 2D, Chicago, Illinois. Phillips received federal rental assistance through the section 8 housing assistance program, administered by the United States Department of Housing and Urban Development (HUD). Under this program, she was required to pay approximately 30% of her income, approximately $48 per month, towards her rent, with HUD paying the remainder. Phillips lived in the apartment with her three children.

On March 25, 1993, Chicago police officers Stephen Nowells and Elgin Holt set up a surveillance on Phillips' apartment after receiving a complaint from a confidential informant of drug activity there. Their affidavits erroneously state that they did so on May 25, 1993. After watching the apartment for a period of time, and observing several people enter, the two officers asked for and were granted permission to enter. Inside they observed several persons in different rooms of the apartment and spoke with Phillips, who identified herself as the leaseholder. She told them that all the people in the apartment were her friends. While in the apartment, the officers observed a man lying on a bed and told him to stand up. When he did so, they observed a clear plastic bag containing several ziplock plastic bags containing white powder, which they suspected was cocaine. The officers placed this man, who identified himself as Eddie Haster, under arrest. Further investigation revealed that the white powder was crack cocaine, with an estimated weight of 10.5 grams and a street value of approximately $1,500.

In her affidavit, Phillips stated that she knew Haster as the cousin of her ex-boyfriend. Prior to March 25, 1993, she had associated with him only briefly. The visit he paid her on that day was the first and only time he paid a social visit to her apartment. Prior to that day, she had no knowledge that Haster was involved with drugs in any way.

On June 7, 1993, American issued and served upon Phillips a 10-day notice of termination of tenancy, which stated that her lease had been breached in that, "On or about March 23, 1993 Chicago police raided your unit and confiscated crack cocaine from your unit, in violation of p 13(B), p 13(C) and p 23(B) of your Lease." When Phillips failed to vacate the apartment pursuant to this notice, American filed this action for possession of the premises on June 23, 1993.

On October 14, 1993, Phillips filed a motion to dismiss, contending that American's suit must be dismissed as a matter of law because she did not know, or have reason to know, that the alleged violation of her lease would occur. On December 1, 1993, the circuit court denied her motion to dismiss.

On January 19, 1994, Phillips filed a motion for summary judgment, again asserting that she had no knowledge, nor any reason to know, that Haster possessed illegal drugs in her apartment. American filed its response to her motion on March 4, 1994, attaching the affidavits of police officers Nowells and Holt.

On April 13, 1994, the circuit court granted the motion for summary judgment. It found:

"The uncontested facts and record as a whole establish that Defendant was not in violation of paragraphs 13(b), 13(c), or 23(b) of her lease, by virtue of paragraph 29 of her lease, which sets forth the specifics which define drug related activity, which paragraph is controlling."

The court stated "that plaintiff has not and did not comply with the requirements of the lease; and that the purported reason for terminating the tenancy of Vickey Phillips was not in compliance with the lease; and she was not in violation of p 29 that I read, with pp 13(B), 13(C) and 23(B) of the lease." The court further stated that there was no lease violation because "there was no criminal activity on the part of the tenant in reference to drug-related criminal activity under 29(D)" and that the possession of cocaine by Phillips' guest did not amount to "an event whereby that plaintiff would have the right, under the lease, to terminate the tenancy."

On May 6, 1994, American filed a motion for reconsideration, which was denied by the circuit court on June 16, 1994. In its ruling on the motion, the court elaborated on its prior holding, stating:

"The police never found any controlled substance upon her person or in her apartment that belonged to her. They found it upon the person of a person that was not a lessee of that premises that was a visitor and that under the law cannot be imputed to her."

The court further stated, "All you can prove is that some person in her apartment who didn't live there had drugs upon his person which were not hers."

On July 6, 1994, American filed a timely notice of appeal from the circuit court's orders granting Phillips' motion for summary judgment and denying its motion to reconsider entry of the judgment.

American asserts that the circuit court misconstrued the lease by excluding as grounds for the termination of tenancy the possession of a controlled substance by Phillips' guest in her apartment. It argues that while paragraph 29(d) defines specific conduct as "drug-related criminal activity," paragraphs 29(a) and 29(b) of the lease prohibit any criminal activity, including drug-related criminal activity, by a guest or other person under the tenant's control. It further argues that it was not required to prove Phillips' actual or constructive knowledge of the criminal conduct of her guest in order to terminate her lease and that, even if it was, there was a genuine issue of material fact raised as to Phillips' knowledge. According to American, therefore, the circuit court erred in granting summary judgment to Phillips.

Phillips responds that American waived its argument that she violated paragraph 29 of the lease and that paragraph 29 imposes vicarious liability upon her because American failed to raise those issues in its notice of termination and complaint and because it argued to the contrary in response to her motion for summary judgment. She further argues that the lease does not make her liable for the acts of her guests, about which she had no knowledge or any reason to know. Phillips also asserts that there is no genuine issue of material fact remaining in the case sufficient to defeat her motion for summary judgment.

Illinois law is clear that a lease is a contract subject to the law of contracts. (Williams v. Nagel (1994), 162 Ill.2d 542, 555, 205 Ill.Dec. 525, 531, 643 N.E.2d 816, 822, cert. denied (1995), --- U.S. ----, 115 S.Ct. 1694, 131 L.Ed.2d 558; Kerr Steamship Co. v. Chicago Title & Trust Co. (1983), 120 Ill.App.3d 998, 1005, 76 Ill.Dec. 355, 360, 458 N.E.2d 1009, 1014.) A contract must be read in its entirety and effect given to each of its provisions. (Continental Casualty Co. v. Polk Brothers, Inc. (1983), 120 Ill.App.3d 395, 401, 75 Ill.Dec. 712, 717, 457 N.E.2d 1271, 1276.) Where there is any doubt or uncertainty as to the meaning of the language used in a lease, however, it should be construed most strongly against the drafter, in this case the lessor. First National Bank v. G.M.P., Inc. (1986), 148 Ill.App.3d 826, 830, 102 Ill.Dec. 259, 262, 499 N.E.2d 1039, 1042; Windsor at Seven Oaks v. Kelly (1983), 113 Ill.App.3d 978, 980, 69 Ill.Dec. 791, 793, 448 N.E.2d 251, 253.

[274 Ill.App.3d 560] Paragraphs 29(a) and 29(b) of the lease state:

"(a) The Tenant, any member of the Tenant's household, or a guest or other person under the Tenant's control shall not engage in or facilitate criminal activity, including, but not limited to, violent criminal activity or drug-related criminal activity.

(b) The Tenant, or any member of the Tenant's household, or a guest or other person under the Tenant's control, shall not permit the dwelling unit to be used for, or to facilitate, criminal activity, including, but not limited to, violent criminal activity or drug-related criminal activity."

Paragraph 29(d) defines "drug-related criminal activity" as:

"the illegal manufacture, sale, distribution, or use, or possession with intent to manufacture, sell, distribute or use, of a controlled substance (as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802))."

Paragraph 23(b)(1) of the lease states the lessor may terminate the tenant's lease for "material noncompliance," and paragraph 29(e) states:

"One or more violations of subsection a or subsection b of this Lease Section constitutes a substantial violation of the Lease and a material noncompliance with the Lease. Any such violation is grounds for termination of tenancy and eviction from the unit."

American interprets these lease sections to mean that Haster's possession of crack cocaine on the premises, while Phillips' guest, amounts to material noncompliance with the lease and is grounds for termination of tenancy and eviction. Phillips, on the other hand, points out that paragraphs 23(a) and (b) refer specifically to "a guest or...