Drs. Sellke & Conlon, Ltd. v. Twin Oaks Realty, Inc.

• Decision Date: 10 April 1986
• Docket Number: No. 2-84-1133,2-84-1133
• Citation: 491 N.E.2d 912,96 Ill.Dec. 633,143 Ill.App.3d 168
• Court: United States Appellate Court of Illinois
• Parties: , 96 Ill.Dec. 633 DRS. SELLKE & CONLON, LTD., Plaintiff-Appellant, v. TWIN OAKS REALTY, INC., an Illinois corporation, James McIntee and Mary McIntee, Defendants-Appellees.

Page 912

491 N.E.2d 912

143 Ill.App.3d 168, 96 Ill.Dec. 633

DRS. SELLKE & CONLON, LTD., Plaintiff-Appellant, v. TWIN OAKS REALTY, INC., an Illinois corporation, James McIntee and Mary McIntee, Defendants-Appellees.

No. 2-84-1133.

Appellate Court of Illinois Second District.

April 10, 1986.

Engerman, Erlich, Jacobs & Berman, Ltd., Edward A. Cohen, Barry A. Erlich, Jeffrey A. Brown and John E. Black, Chicago, for plaintiff-appellant.

Madsen, Clark, Baudin & Briscoe, Ralph E. Madsen and Cynthia J. Briscoe, Chicago, for defendants-appellees.

Presiding Justice NASH delivered the opinion of the court:

Plaintiff, Drs. Sellke and Conlon, Ltd. (Dr. Sellke), a professional corporation, appeals from an order of the Circuit Court of McHenry County awarding $1,668.90 in damages to plaintiff in a breach of lease action. On appeal, plaintiff seeks reversal and a new trial contending punitive damages should have been awarded together with damages for lost profits and for the reduced rental value of the leased premises.

On June 15, 1978, plaintiff entered into a five-year written lease for approximately 900 feet of vacant business space in a building owned by defendants, James and Mary McIntee, through its agent, Twin Oaks Realty, Inc. The parties agreed Dr. Sellke could make alterations and improvements necessary to convert the premises into an orthodontic office.

Construction on the office began June 15, 1978, but was not completed until October 31, 1978, due to restrictions set by McIntee, who also had his law office in the building. McIntee, who was concerned about noise and dirt resulting from the construction, insisted the workers use a 28"' by 50"' window in Sellke's office to bring in materials after 8 a.m., rather than the front door; that the carpenters always enter and exit through the window, and work only after 5 p.m.; and that noise be kept to a minimum between 10 a.m. and 4 p.m., even though defendant knew it was necessary to break up the concrete floor to install drains for the dental equipment. He also refused to allow plumbers to shut off the water to make necessary plumbing hook-ups. Charles Lary, the contractor, testified the construction took two months longer than anticipated due to McIntee's interference.

Dr. Sellke testified that McIntee refused to allow a telephone serviceman to use space above the rear ceiling to install a telephone line to Sellke's office because Sellke had not rented that portion of the building. As a result, the telephone was not installed until late September. As the deadline for publication of a telephone number was early September, plaintiff's phone number was not included in the 1978-79 McHenry telephone directory. However, McIntee testified he allowed the serviceman to install the telephone "sometime after July 5."

Prior to execution of the lease, McIntee promised to repair the broken front stoop of the premises and its leaking roof. The stoop was never repaired, and the roof was not repaired until fall of 1982. Plaintiff's dental assistants testified that the roof leaked every time it rained for more than 10 minutes, that water stained the walls and carpeting, that buckets had to be set out to collect rain water, and that water dripped into the patients' waiting area where patients were sometimes forced to use umbrellas. Defendant admitted he frequently placed buckets on top of Sellke's suspended ceiling to catch water, observed wet walls and carpets, and noticed water on the chairs in the waiting room.

McIntee also refused to allow Sellke to post his name on the building's business directory, stating Sellke had rented only the office and not the sign. On January 5, 1981, the trial court enjoined McIntee from interfering with plaintiff's right to post his business name on the directory.

Other disputes between the parties centered on McIntee's failure to post exit lights in the hallway; his removal of a posted building permit; his refusal throughout the lease term to repair the air conditioning system and his assertion that it was Sellke's responsibility; his practice of locking the main entry door to the building during plaintiff's business hours, which meant plaintiff's patients could not exit; and McIntee's entry into Sellke's office after hours, thereby setting off plaintiff's burglar alarm. On the last point, the record shows that Sellke was often required to come to the office to turn off the alarm.

At trial, Dr. Sellke made an offer of proof that he had lost approximately 20 patients each month the McHenry office was not open in 1978. He also offered proof that, based on his experience, September and August were the most productive months for acquiring new patients, and offered a five-year breakdown of examinations at the McHenry office to support these assertions. This evidence was excluded by the trial court. Sellke also offered proof that almost all of his examinations lead to the insertion of braces and that his average fee was $1,800. Stating the profit for orthodontal services varies from 45 percent to 65 percent, he offered proof that the two-month delay in opening his McHenry office reduced his net income by $16,200 and $23,400. This testimony was also excluded.

Prior to trial, the trial court dismissed counts IV and V of plaintiff's fifth amended complaint, in which plaintiff sought punitive damages for wilful and wanton misconduct by defendant, for failure to state a claim. At the close of plaintiff's case, the court granted defendant's request for a directed finding that plaintiff had failed to prove a diminution in the market value of the leased premises and refused to permit plaintiff to reopen the proofs to introduce expert testimony on this issue.

After trial, the court found that defendant had breached the lease agreement and awarded $1,668.90 in damages for plaintiff's out-of-pocket expenses, including repair of the desk, carpet and air conditioner, and plaintiff's loss of the use and occupancy of the leased premises for two months. No damages were allowed for plaintiff's lost profits. This appeal followed.

Plaintiff first argues the trial court erred in dismissing counts IV and V of his complaint which sought punitive damages. It is well-established that punitive damages are not recoverable in Illinois in breach of contract actions, except where the breach constitutes an independent tort and there are sufficient allegations of malice, wantonness or oppression. Morrow v. L.A. Goldschmidt Associates, Inc. (1984), 126 Ill.App.3d 1089, 1093, 82 Ill.Dec. 152, 468 N.E.2d 414, appeal allowed; Bank of Lincolnwood v. Comdisco, Inc. (1982), 111 Ill.App.3d 822, 829, 67 Ill.Dec. 421, 444 N.E.2d 657.

Plaintiff must allege facts which would bring its claim for punitive damages under a recognized tort theory such as wilful and wanton misconduct, which is essentially aggravated negligence. (Morrow v. L.A. Goldschmidt Associates, Inc. (1984), 126 Ill.App.3d 1089, 1094, 82 Ill.Dec. 152, 468 N.E.2d 414, appeal allowed; Alley v. Champion (1979), 75 Ill.App.3d 878, 882, 31 Ill.Dec. 533, 394 N.E.2d 735.) A complaint for wilful and wanton misconduct is sufficient if its allegations establish reckless disregard for a plaintiff's safety (Ingram v. Little Co. of Mary Hospital (1982), 108 Ill.App.3d 456, 459, 63 Ill.Dec. 831, 438 N.E.2d 1194, appeal denied; O'Brien v. Township High School District 214 (1980), 83 Ill.2d 462, 469, 47 Ill.Dec. 702, 415 N.E.2d 1015), but an allegation of personal injury is not necessary (Wolinsky v. Kadison (1983), 114 Ill.App.3d 527, 536, 70 Ill.Dec. 277, 449 N.E.2d 151).

Plaintiff raises three bases for its claim of wilful and wanton misconduct: (1) McIntee intentionally disregarded his known duty to protect the safety of plaintiff's property; (2) McIntee intentionally interfered with and caused the termination of plaintiff's business relationships; and (3) McIntee intentionally interfered with plaintiff's prospective business relationship. We find none of these claims to be a sufficient basis for an award of punitive damages.

A motion to dismiss accepts all well-pleaded facts as true, as well as all reasonable inferences favorable to the nonmoving party which can be drawn from those facts. (Panorama of Homes, Inc. v. Catholic Foreign Mission Society, Inc. (1980), 84 Ill.App.3d 142, 145, 39 Ill.Dec. 513, 404 N.E.2d 1104; Browder v. Hanley Dawson Cadillac Co. (1978), 62 Ill.App.3d 623, 629, 20 Ill.Dec. 138, 379 N.E.2d 1206.) Although the pleader need not set forth evidence which would properly be produced during trial, the ultimate facts necessary to support the action must be alleged. Ingram v. Little Co. of Mary Hospital (1982), 108 Ill.App.3d 456, 459, 63 Ill.Dec. 831, 438 N.E.2d 1194, appeal denied.

In support of his initial claim that McIntee's acts sufficiently endangered the safety of himself, his patients, and his property, Sellke cites Morrow v. L.A. Goldschmidt Associates, Inc. (1984), 126 Ill.App.3d 1089, 82 Ill.Dec. 152, 468 N.E.2d 414, appeal allowed. In that case the reviewing court held that a complaint which alleged breach of contract and the implied warranty of habitability sufficiently alleged the independent tort of wilful and wanton misconduct so as to justify an award of punitive damages. The court relied on the fact that the complaint had contained "detailed factual allegations of the potentially life-threatening structural defects in plaintiffs' homes" (126 Ill.App.3d 1089, 1091-92, 82 Ill.Dec. 152, 468 N.E.2d 414), such as improperly supported floors, unacceptable foundation supports, uneven floors, part of a fire wall missing, extraordinary flooding, and water and gas leaks. Here, plaintiff alleges only that McIntee failed to fix the roof leak, repair the damaged front stoop, or install exit lights in the hallway. We conclude plaintiff failed to allege facts sufficient to support an action based on wilful and wanton misconduct and do not consider the unhazardous conduct alleged to be...