Goldblatt Bros., Inc. v. Addison Green Meadows, Inc.

• Decision Date: 31 October 1972
• Docket Number: No. 55772,55772
• Citation: 8 Ill.App.3d 490,290 N.E.2d 715
• Parties: GOLDBLATT BROS., INC., a corporation, Plaintiff-Appellant, v. ADDISON GREEN MEADOWS, INC. et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 715

290 N.E.2d 715

8 Ill.App.3d 490

GOLDBLATT BROS., INC., a corporation, Plaintiff-Appellant, v. ADDISON GREEN MEADOWS, INC. et al., Defendants-Appellees.

No. 55772.

Appellate Court of Illinois, First District, Second Division.

Oct. 31, 1972.

Supplemental Opinion on Denial of Rehearing Dec. 19, 1972.

Sonnenschein, Levinson, Carlin, Nath & Rosenthal, Chicago, for plaintiff-appellant; Edwin A. Rothschild, Jonathan H. Sherr, Chicago, of counsel.

Russell J. Topper and Epton, McCarthy, Bohling & Druth, Chicago, for defendants-appellees.

STAMOS, Presiding Justice.

This appeal arises from plaintiff's three count complaint which sought to enforce the terms of a lease. Plaintiff is the lessee of a department store in a shopping center which was developed by defendant, Addison Green Meadows, Inc. Count I of the complaint sought an accounting of profits and damages for breach of a restrictive covenant. Count II sought to enjoin defendants from interfering with plaintiff's purported exclusive easement rights in the common areas of the shopping center. Count III sought specific enforcement of the lessor's express covenants to construct parking areas and driveways. Upon defendants' motion for judgment on the pleadings, Counts I and II were dismissed with prejudice. After a bench trial Count III was dismissed for want of equity. Plaintiff appeals from each of the respective orders dismissing the counts of the complaint.

OPINION

Count I of plaintiff's complaint alleged as follows: By a lease dated June 30, 1961 (hereinafter referred to as the Goldblatt lease) plaintiff leased shopping center space on which lessor Addison Green Meadows, Inc., was to construct a Goldblatt's department store. The site of the original shopping center (hereinafter referred to as Tract 1) was delineated by metes and bounds in the lease. Attached to the lease and incorporated therein, was a plat of survey of Tract 1. Article Seventh, paragraph M of the lease provided as follows:

'Lessor agrees that in connection with all leases for variety or general merchandise stores to be negotiated for said shopping center involving an area in excess of fifteen thousand (15,000) square feet, the approval in writing by Lessee of any such proposed tenant shall be first had and obtained.'

Pursuant to the lease, lessor constructed a one-story department store which plaintiff occupied in March, 1962. Anthony Lullo, sole stockholder and president of Addison Green Meadows, Inc., subsequently acquired another parcel of real estate (hereinafter referred to as Tract 2) directly west of, but adjacent to, Tract 1. Tract 2 was held in a land trust, dated April 27, 1964, of which Lullo was the sole beneficiary and for which defendant, Western National Bank of Cicero, was the trustee. On March 21, 1966 plaintiff received notice that Tract 2 was to be leased to a department store tenant. Plaintiff formally objected, asserting that, without its consent, such action would breach the terms of the restrictive covenant in the Goldblatt lease. Nonetheless, by a lease dated February 16, 1967 defendant Western National Bank of Cicero leased Tract 2 to Kimzay Illinois, Inc., which, in turn, entered into a sublease with Zayre of Illinois, Inc. A retail shopping center, containing a Zayre department store in excess of 15,000 square feet, was constructed and opened to the public in March, 1968. No barriers divided Tract 1 from Tract 2, and the stores on each tract were easily accessible from the other tract. Plaintiff alleged in its complaint that, as a direct result of the competing operations of the Zayre store, plaintiff's sales and profits were diminished.

Plaintiff contends that the restrictive covenant in the Goldblatt lease limited defendants' right to lease space in the Addison Green Meadows Shopping Center, both as it existed in 1961 and as it might exist in future years, to competing tenants. Plaintiff thus construes the term, 'said shopping center,' as used in the restrictive covenant, to encompass that land which constituted the shopping center in 1961 (Tract 1) as well as that after-acquired land which enlarged the original shopping center (Tract 2). Despite the absence in the lease of any reference to after-acquired property, we would tend to accept plaintiff's construction if the lease failed to delineate or was in any manner vague or conflicting with regard to the location of 'said shopping center.' At a minimum, we would then recognize the existence of an ambiguity warranting the submission of parol evidence. Slice v. Carozza Properties, Inc., 215 Md. 357, 137 A.2d 687; Parker v. Lewis Grocer Co., 246 Miss. 873, 153 So.2d 261. However, such is not the case. Article First, Section B of the lease contains the following provision:

'B. Legal Description of 'Addison Green Meadows Shopping Center.'

The legal description of the land upon which the development will be built hereinafter referred to as 'Addison Green Meadows Shopping Center' is as follows:'

Tract 1 is then described by metes and bounds. Following this description, the lease continues:

'All covenants, conditions and agreements herein contained shall be construed as covenants running with the aforesaid land.'

Attached to the lease and entitled, 'Addison Green Meadows Shopping Center,' is a plat of survey which depicts Tract 1 only. To these diverse portions of the lease we must apply the established legal doctrine that the intention of parties to a written contract must be gathered from the contract as a whole and not merely from any clause standing alone. Stout v. Whitney, 12 Ill. 218; Martindell v. Lake Shore Nat. Bank, 15 Ill.2d 272, 154 N.E.2d 683. When read in conjunction with the legal description and the plat of survey, the phrase, 'said shopping center,' assumes a clear, unambiguous meaning. That phrase refers to Tract 1 only; not to Tract 2 or to any other after-acquired property. We therefore conclude that the restrictive covenant in the Goldblatt lease did not apply to Tract 2 and was not breached by the sublease of Tract 2 to a competing business operation.

Our construction of the Goldblatt lease finds support in Crest Commercial, Inc. v. Union-Hall, Inc., 104 Ill.App.2d 110, 243 N.E.2d 652. In that case plaintiff-lessor initiated a declaratory judgment action for the interpretation of a shopping center lease, executed in 1960 and containing a covenant prohibiting lessor from leasing 'any of the shopping center area to a business that substantially competes with' lessee's business. The lease further provided that 'Parcel A, Parcel B. and Parcel C in total constitute and are to be considered for the purpose of this lease 'the shopping center'.' One year after the lease was executed, lessor acquired Parcel D, a tract of land adjacent to Parcel B. Parcel D was not mentioned in the original lease, nor in a supplemental lease executed in 1962. In 1967 lessor, having developed Parcel D, desired to lease it to the Walgreen Company for construction of a drugstore. It was undisputed that Walgreens' operations would substantially compete with defendant's. When the parties were unable to agree whether the contemplated action would violate the restrictive covenant in the original lease, the lessor sought declaratory relief and prevailed in the trial court. On appeal the lessee argued that the restrictive covenant expressly covered Parcels A, B, and C and impliedly covered Parcel D as well. The Court rejected this argument in the Following manner, 104 Ill.App.2d at 117--118, 243 N.E.2d at 656:

'Restrictive covenants are valid in Illinois if they are reasonable, House of Vision, Inc. v. Hiyane, 37 Ill.2d 32, 37, 225 N.E.2d 21 (1967). However, as a general rule restrictive covenants are strictly construed and all doubts must be resolved in favor of natural rights and against restriction, Staley v. Mears, 13 Ill.App.2d 451, 456, 142 N.E.2d 835 (1957). In Postal Tel. Cable Co. v. Western Union Tel. Co., 155 Ill. 335, 40 N.E. 587 (1895), the Supreme Court said at pp. 347--348:

'Restrictions on the power of alienation have long been unfavored, and the policy of this State has ever been hostile to them, and this principle is so firmly engrafted on our polity (sic) that such covenants will be construed with the utmost strictness, to the end that the restraint shall not be extended beyond the express stipulation; and all doubts, as a general rule, must be resolved in favor of a free use of property and against restrictions.'

In addition, it appears that the lease in question was prepared by the defendant and the rule is that a written instrument is construed most strongly against the person who prepared it, Western Illinois Oil Co. v. Thompson, 26 Ill.2d 287, 291, 186 N.E.2d 285 (1962).

The defendant argues that the rule of strict construction should not apply to shopping centers because they are of recent origin and have in many cases expanded rapidly beyond their original contemplation. Defendant acknowledges that there is no authority in the Illinois cases for this proposition but they direct our attention to cases from other states which seem to offer support. A few examples are: Carter v. Adler, 138 Cal.App.2d 63, 291 P.2d 111 (1955); Parker v. Lewis Grocer Co., 246 Miss. 873, 153 So.2d 261 (1963) and Daitch Crystal Dairies, Inc. v. Neisloss, 16 Misc.2d 504, 185 N.Y.S.2d 188 (1959). Many of these cases turn on the good faith of the parties. A tenant is deluded into believing himself protected and then the center is expanded to evade the restriction. We cannot presume bad faith and there is nothing in the record before us from which such a conclusion can be drawn.

It is true that shopping centers are, for the most part, a post-World War II development. However, the rules by which we construe documents are ancient and we see no logical basis for having one set of rules for shopping centers and a different set of rules for other contractual relationships. We recognize the problem presented but the...