Fitzwilliam v. 1220 Iroquois Venture

Decision Date25 August 1992
Docket NumberNo. 2-91-1083,2-91-1083
Citation174 Ill.Dec. 371,598 N.E.2d 1003,233 Ill.App.3d 221
Parties, 174 Ill.Dec. 371 F. John FITZWILLIAM et al., Plaintiffs-Appellants, v. 1220 IROQUOIS VENTURE, By and Through Walter J. O'Brien II, Defendant-Appellee.
CourtUnited States Appellate Court of Illinois

Michael A. Cotteleer (argued), Michael A. Cotteleer & Associates, Wheaton, for F. John and Alice L. Fitzwilliam.

Walter J. O'Brien, II, Angela Imbierowicz and Molly B. Murphy (argued), O'Brien & Associates, P.C., Oak Brook Terrace, for Walter J. O'Brien.

Justice UNVERZAGT delivered the opinion of the court:

Plaintiffs, F. John Fitzwilliam and Alice Fitzwilliam, brought an action for injunctive and declaratory relief in the circuit court of Du Page County against defendant, 1220 Iroquois Venture, a limited partnership, seeking compensatory damages for constructive eviction and the wrongful assessment and seizure of property tax prorations.

Defendant filed a counterclaim for attorney fees and costs incurred in the instant lawsuit. Both parties filed motions for summary judgment. The trial court determined that defendant was entitled to summary judgment as to each count in plaintiffs' complaint and as to defendant's counterclaim for attorney fees and costs.

On appeal plaintiffs contend: (1) that paragraph 9 of the lease agreement between the parties, allowing defendant access to the leased premises to make repairs, decorations, and alterations, is ambiguous; (2) that defendant's entry onto the premises constituted a constructive eviction under the lease; (3) that the trial court erred in finding defendant was entitled to retain real estate tax prorations; and (4) that the trial court erred in awarding attorney fees to defendant.

Plaintiffs are engaged in the business of acquiring wholesale commercial office space under long-term leases. Plaintiffs then sublease the space to one of the corporations wholly owned by plaintiffs (in the instant case, Business Link, Inc.) which, in turn, subleases the space as executive office suites and provides related clerical and office services under what is known as the "shared office concept." Plaintiffs leased certain commercial property at 1220 Iroquois Drive, Naperville, pursuant to a lease with defendant dated March 22, 1985, until December 31, 1989. A rider to the lease provided the plaintiffs with the option of extending the term of the lease for four, consecutive one-year terms and according to the terms and conditions of the original lease. Plaintiffs did not exercise the option but, instead, on or about May 26, 1988, sent a letter through their broker, the Palmer Group, to defendant's designated management agent, McWilliams & Associates, Inc. (McWilliams), requesting a renegotiation of their lease. That letter detailed plaintiffs' lease requirements, including that the lease be executed by Business Link Naperville, Inc., another Illinois corporation owned and operated by plaintiffs. In a letter dated June 7, 1988, McWilliams, on behalf of defendant, rejected the terms and conditions proposed by plaintiffs in renegotiating their lease.

On February 1, 1989, Business Link Naperville, Inc., entered into a lease with Upland Industries Corporation for new commercial space for the operation of its subleased office concept. Section 3.01 of that lease provided for payment to the future tenants of $35,700 "for Tenant's benefit to offset its rental obligations under the lease whereby Tenant currently occupies office space." The lease provided a November 1, 1989, occupancy date.

On March 27, 1989, Kay Porsche, defendant's property manager, wrote plaintiffs expressing her disappointment in learning via newspaper articles of plaintiffs' plans to move out of the premises in question at the termination of their lease rather than being personally informed of plaintiffs' decision. On July 12, 1989, Walter O'Brien, defendant's general partner, wrote plaintiffs requesting that, in view of their "well-publicized intention to vacate" the space presently leased by them, plaintiffs acknowledge their waiver of their right to extend their lease beyond the termination date of December 31, 1989, so that defendant could then advertise the availability of the premises.

On October 9, 1989, plaintiffs' attorney wrote defendant advising defendant of plaintiffs' intention "to exercise their right to continued possession of the leased premises until their lease expires on December 31, 1989, and no sooner." Counsel also informed defendant:

"that failure to occupy the lease premises with persons and/or office furniture prior to December 31, 1989 is under no circumstances to be construed as an abandonment or surrender of said premises nor is the cessation of tenants' conducting business at the lease premises to be construed in a similar manner."

On November 1, 1989, the sublessees of Business Link, Inc., then located at 1220 Iroquois Drive, Naperville, moved to the new premises obtained by Business Link Naperville, Inc. Plaintiff F. John Fitzwilliam, as president of Business Link, Inc., arranged for the moves. According to Fitzwilliam, Business Link, Inc., did not move out on November 1. Following the moves, a few pieces of furniture were left in the reception area of the premises. With the exception of one telephone, all telephone equipment and telephones were moved on October 31, 1989, to the new location. The post office was notified that Business Link, Inc.'s new address was to go into effect November 1, 1989. From November 2 to November 20, the old premises were occupied by one of two young women who brought her baby to the premises and baby-sat the child there. According to Fitzwilliam, the women were to do nothing but answer the phone and direct people or deliveries to the new location.

According to the terms of plaintiffs' lease with defendant, plaintiffs were to pay the rent on or before the first day of each month. On November 4, 1989, defendant served plaintiffs with a 10-day notice for the payment of $17,695.84, rent due for the month of November. The requested rent was paid on November 10, 1989. No rent was paid for the month of December.

On November 17, 1989, workmen entered the premises in question for purposes of redecorating. Paragraph 9 of plaintiffs' lease with defendant provided in relevant part:

"The Tenant shall permit the Landlord to erect, use and maintain pipes, ducts, wiring and conduits in and through the demised premises. The Landlord or Landlord's agents shall have the right to enter upon the premises, to inspect the same, to perform janitorial and cleaning services and to make such decorations, repairs, alterations, improvements or additions to the premises or the Building as the Landlord may deem necessary or desirable, and the Landlord shall be allowed to take all material into and upon said demised premises that may be required therefor without the same constituting an eviction of the Tenant in whole or in part and the rent reserved shall in no wise abate (except as provided in Section 10) while said decorations, repairs, alterations, improvements, or additions are being made, by reason of loss or interruption of business of the Tenant, or otherwise. If the Tenant shall not be personally present to open and permit an entry into said demised premises, at any time, when for any reason an entry therein shall be necessary or permissible, the Landlord or Landlord's agents may enter the same by a master key, or may forcibly enter the same, without rendering the Landlord or such agents liable therefor (if during such entry Landlord or Landlord's agents shall accord reasonable care to Tenant's property), and without in any manner affecting the obligations and covenants of this Lease."

Kay Porsche acknowledged at her deposition that she scheduled improvements to be made on the premises in question in November and December 1989. According to Porsche, she knew that plaintiffs' lease expired December 31, 1989, and that a new tenant, Iroquois Executive Suites, wanted to occupy the premises on January 1, 1990. Her goal was to have the refurbishments completed by that date.

On December 4, 1989, plaintiff F. John Fitzwilliam wrote to Walter O'Brien, general partner of defendant, advising him that plaintiffs considered the "unauthorized occupation" by defendants' workmen of the premises leased by plaintiffs to constitute a constructive eviction of the premises and that defendants' eviction forced plaintiffs' abandonment of the premises effective as of November 17. Fitzwilliam demanded a rebate of the November rent prorated from November 17, a confirmation that no liability existed for the December rent, and a release of the $35,000 security deposit letter of credit pledged to defendant in connection with plaintiffs' lease. Also, on December 4, plaintiffs filed their complaint for injunctive and declaratory relief, seeking among other claims, a temporary restraining order prohibiting defendant from drawing upon the letter of credit posted as security for plaintiffs' obligations pursuant to the lease.

On December 7, 1989, plaintiffs presented an emergency motion for a temporary restraining order to prevent defendant from making a draw on the letter of credit. Following a hearing, the court denied the motion. On December 15, 1989, plaintiffs presented a motion for rehearing on the motion for a temporary restraining order, which the trial court also denied. Plaintiffs then filed a notice of interlocutory appeal to this court on the denial of their motion for emergency injunctive relief. The appeal was dismissed on December 28, 1989.

On December 18, 1989, as permitted under the terms of the letter of credit, defendant made a draw against the letter of credit in the amount of $27,539.01. The amounts drawn on the letter of credit represented unpaid rent, interest on unpaid rent, and real estate tax prorations and interests.

On February 20, 1990, defendant filed...

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