John Munic Meat Co., Inc. v. H. Gartenberg & Co.

• Decision Date: 29 July 1977
• Docket Number: No. 76-263,76-263
• Citation: 51 Ill.App.3d 413,9 Ill.Dec. 360,366 N.E.2d 617
• Parties: , 9 Ill.Dec. 360 JOHN MUNIC MEAT CO., INC., Plaintiff-Appellee, v. H. GARTENBERG & CO., an Illinois Corporation, Defendant, and Melvin Gartenberg and Robert Gartenberg, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 617

366 N.E.2d 617

51 Ill.App.3d 413, 9 Ill.Dec. 360

JOHN MUNIC MEAT CO., INC., Plaintiff-Appellee, v. H. GARTENBERG & CO., an Illinois Corporation, Defendant and Melvin Gartenberg and Robert Gartenberg, Defendants-Appellants.

No. 76-263.

Appellate Court of Illinois, First District, Fifth Division.

July 29, 1977.

Joel J. Bellows, Charles B. Bernstein, Bellows & Associates, Chicago, for defendants-appellants.

Robert J. Krull, Spitzer, Addis, Susman & Roskin, Chicago, for plaintiff-appellee.

SULLIVAN, Presiding Justice.

This is an appeal from a judgment granting plaintiff damages in the amount of $46,320 against defendants Melvin Gartenberg and Robert Gartenberg for failure to comply with lease covenants and denying defendants' counterclaim for damages because of alleged lease violations. H. Gartenberg & Co., also named as a defendant, was dismissed by stipulation.

The briefs and arguments center on the following principal issues: (1) whether plaintiff established it was constructively evicted; (2) if so, whether the damages awarded were excessive; and (3) whether defendants' counterclaim for damages was improperly denied.

Plaintiff was a meat packing company and, as such, was subject to the rules and regulations of the United States Department of Agriculture Meat Inspection Division (MID), which require the building in which the meat packer is doing business to obtain a MID number. When MID issues such a number, it provides meat inspection services not only for the meat plant but for the entire building. If a MID number is withdrawn, whether because of deficiencies in the operation of the meat plant or the condition of some other portion of the building, the packing company is not allowed to continue doing business until the MID number is reinstated and that will not occur until the government is satisfied that its standards are met. Where there is a withdrawal, the MID number is kept open for one year and, if the owner of the building has not then brought it up to MID standards, the number is reassigned to someone else.

It appears in the instant case that in December, 1967, plaintiff leased the second floor of defendants' building to operate its meat packing business. The lease provided that defendants had obtained MID number 2500 for the building and that defendants were to comply with the requirements of MID for the retention of that number in all areas of the building, except that the requirements relative to the demised premises were to be performed by plaintiff. The second floor was occupied by plaintiff in January of 1968, and it continued its business there until February, 1972, when an event occurred which will be more fully discussed. In 1969, another meat packer, Opal Meat Company (Opal), leased and took occupancy of the entire first floor.

During the course of the ensuing months, any deficiencies found by MID were corrected by either plaintiff or defendants or perhaps Opal if they occurred on its premises. Then, the parties received a letter from MID (hereafter the MID letter), dated February 14, 1972, informing them that the MID number was conditionally withdrawn because of certain deficiencies and substandard conditions which were uncorrected. This MID letter stated that from August 8, 1971, numerous unsatisfactory conditions and plant deficiencies required withholding of inspection on several occasions; that "33 other times facilities and/or equipment were rejected until such were made clean"; that during the six months prior to the letter there were 33 instances of inspection services being withheld for one or more hours; and that on February 2, 1972, Inspector Bonkowski found 11 unsatisfactory conditions. The letter went on to state that on February 10, 1972, Inspectors Crawford and Bonkowski "noted the following additional deficiencies that would need to be corrected if inspection is to continue * * *." This quote was followed by a listing of 21 deficiencies. It was then stated in the letter that "the conditional withdrawal will remain in effect pending correction of the above deficiencies."

After the MID letter was received, plaintiff vacated the building on February 16 or 18, 1972. It occupied new premises the same day and resumed its packing operations at that new address on February 22 or 24. There was testimony by its president that plaintiff left the old premises with the intent to return when the inspection services were reinstated, and that it offered to share the expense of repair by placing money in escrow but that the offer was declined. Eventually, in the third week of April, 1972, plaintiff signed a lease for the new premises at a rental of approximately $3,400 a month, beginning March 1, 1972, and extending for a period of ten years.

Three persons testified at the trial, and their testimony will be discussed where necessary hereafter in this opinion. Following the trial, the court found for plaintiff on its complaint and against defendants on their counterclaim. This appeal is brought from that order.

OPINION

In their briefs, defendants first assert that the court erred "in failing to apply the terms of the lease which govern the specific controversy and in failing to recognize the failure of plaintiff-lessee to comply therewith." They then recite certain terms of the lease which they allege were breached by plaintiff. These alleged violations hinge upon and will be discussed in connection with the crucial question of whether the record supports the court's finding that plaintiff was constructively evicted.

Constructive eviction has been defined as "something of a grave and permanent character done by the landlord with the intention of depriving the tenant of the enjoyment of the premises." (Gillette v. Anderson (1972), 4 Ill.App.3d 838, 282 N.E.2d 149) and, as a general rule, there can be no constructive eviction unless the tenant surrenders possession or abandons the premises (Gillette ). Where premises leased are rendered useless to the tenant or the tenant is deprived, in whole or in part, of the possession and enjoyment thereof as the result of the wrongful act of the landlord, there is a constructive eviction (A. H. Woods Theatre v. North American Union (1927), 246 Ill.App. 521; 24 Ill.L. & Prac. Landlord and Tenant § 334), and it may result from the landlord's failure or refusal to perform the covenants and conditions of the lease (Kesner v. Consumers Company (1929), 255 Ill.App. 216; 24 Ill.L. & Prac. Landlord and Tenant § 334; see also Ira Handleman Building Corporation v. Dolan (1957), 15 Ill.App.2d 49, 145 N.E.2d 250 (abstract)). It is not essential that there be an express intention of the landlord to compel a tenant to leave the demised premises or to deprive him of their beneficial enjoyment, since persons are presumed to intend the natural and probable consequence of their acts and, accordingly, acts or omissions of the landlord making it necessary for the tenant to move from the demised premises constitutes a constructive eviction. (Woods Theatre.) The question as to whether there has been a constructive eviction is one of fact (Automobile Supply Co. v. Scene-in-Action Corp. (1930), 340 Ill. 196, 172 N.E. 35), and a reviewing court will not disturb the finding unless it is manifestly against the weight of the evidence (Lipschultz v. So-Jess Management Corp. (1967), 89 Ill.App.2d 192, 232 N.E.2d 485).

In essence, defendants take the position that because of breaches by plaintiff of lease provisions, the trial court improperly found a constructive eviction. They support their position with the following contentions.

First, they argue that plaintiff abandoned the premises before the expiration of the 90 days allowed in the lease for them to obtain reinstatement of the MID number, and that plaintiff also failed to send a notice of termination after the 90 day period as provided in the lease. We see no merit in this contention. Neither of these provisions became operative, as the MID number was never reinstated. Furthermore, we note no clause in the lease requiring plaintiff to cease its business during the 90 day period or, for that matter, during the withdrawal of the MID number. Nor was plaintiff prevented by the lease from conducting its business elsewhere. When the MID number was withdrawn, plaintiff necessarily had to relocate in a building having such a number in order to continue its business. As to the notice of termination, plaintiff agrees that it sent no such notice; thus, had the MID number been reinstated within the 90 day period, it appears that plaintiff would have continued to be bound by the provision of the lease subject of course to any claim for damages it may have had against defendants for the period of withdrawal. In this regard, there is evidence that plaintiff expected to be so bound, as indicated from the testimony of its president and defendant Melvin Gartenberg that plaintiff had offered to return to the premises as soon as the number was reinstated.

Secondly, defendants argue plaintiff breached its duty to cooperate in obtaining the reinstatement of the MID number. The lease required plaintiff "to extend necessary cooperation to permit the...