People ex rel. Dept. of Transp. v. Cook Development Co.

• Court: Appellate Court of Illinois
• Writing for the Court: DiVITO
• Citation: People ex rel. Dept. of Transp. v. Cook Development Co., 653 N.E.2d 843, 274 Ill.App.3d 175, 210 Ill.Dec. 648 (Ill. App. 1995)
• Decision Date: 11 July 1995
• Docket Number: 1-94-3044,Nos. 1-93-3056,s. 1-93-3056
• Parties: , 210 Ill.Dec. 648 The PEOPLE ex rel. the DEPARTMENT OF TRANSPORTATION, Plaintiff-Appellee, v. COOK DEVELOPMENT COMPANY et al., Defendants-Appellants. COOK DEVELOPMENT COMPANY, Counterplaintiff-Appellant v. The PEOPLE ex rel. the DEPARTMENT OF TRANSPORTATION et al., Counterdefendants-Appellees.

Page 843

653 N.E.2d 843

274 Ill.App.3d 175, 210 Ill.Dec. 648

The PEOPLE ex rel. the DEPARTMENT OF TRANSPORTATION, Plaintiff-Appellee, v. COOK DEVELOPMENT COMPANY et al., Defendants-Appellants.

COOK DEVELOPMENT COMPANY, Counterplaintiff-Appellant v. The PEOPLE ex rel. the DEPARTMENT OF TRANSPORTATION et al.,

Counterdefendants-Appellees.

Nos. 1-93-3056, 1-94-3044.

Appellate Court of Illinois First District, Second Division.

July 11, 1995.

Victoria P. Pappas, Sp. Asst. Atty. Gen., D'Ancona & Pflaum, Chicago, and Robert W. Hallock, Sp. Asst. Atty. Gen., Lincolnshire, for appellee.

Rufus Cook, Barbara J. Revak, Cook Partners Law Offices, Ltd., Chicago, for appellant.

Justice DiVITO delivered the opinion of the court:

The People of the State of Illinois ex rel. the Illinois Department of Transportation (IDOT) filed a claim against Cook Development Company (CDC) under the Illinois Forcible Entry and Detainer Act (Ill.Rev.Stat.1989, ch. 110, par. 9-101 et seq. (now 735 ILCS 5/9-101 (West 1992))), for rent and possession of certain real estate and improvements. CDC filed a multicount counterclaim. The circuit court granted IDOT's motion for use and occupancy and dismissed CDC's counterclaim for lack of subject matter jurisdiction. For the following reasons, we affirm the grant of use and occupancy, affirm the dismissal in part, and reverse in part.

IDOT owns certain commercial property containing abandoned grain elevators at Damen Avenue and I-55 on the Chicago River. CDC, a minority owned company with Rufus Cook as its sole shareholder, began investigating the southern portion of the grain elevators for potential conversion into a cement storage and distribution facility in 1986. CDC alleged that it learned that American Fly Ash, a white-owned company, had been given free access to the north silo complex since August 1986 to enable its engineers to analyze and prepare plans for rehabilitation of those silos. In 1986, two other white-owned companies, Tri-River Docks and Barge Terminals, Inc., were allegedly occupying and using IDOT land and buildings, including property which CDC sought to lease, free of charge. CDC determined that conversion of the southern facilities would cost several hundred thousand dollars over a period of approximately two years and would require a pneumatic piping system which would traverse the north silo facility leased by American Fly Ash.

CDC sought a long-term lease of 10 years and the right to occupy the property free of charge on a preliminary basis to prepare rehabilitation plans. IDOT allowed CDC to inspect the property free of charge, but allegedly refused a prolonged occupancy without pay. IDOT allegedly offered CDC a 17-month lease with the oral assurance that a 10-year lease or a 5-year lease with an option to renew for 5 years would be made available. CDC and IDOT entered into a 17-month commercial lease for the south silos and the adjacent land and buildings described above on April 1, 1987 (the 1987 lease). IDOT later offered CDC a five-year lease, without an option for renewal, which was entered into on September 1, 1988, with a monthly rent of $3,865 (the 1988 lease). The 1988 lease provided that, in the event of default of any of the covenants in the lease, IDOT had the right to terminate the lease and repossess the premises.

CDC alleged that American Fly Ash and Barge Terminals continued to improperly occupy and damage portions of CDC's premises throughout the term of the lease. American Fly Ash's waste ash and Barge Terminal's excess gravel, stone, and sand allegedly clogged CDC's sewers, drains, and piping systems causing damage in excess of $400,000. CDC alleged that IDOT was also responsible for the damage in that it failed to control the behavior of its tenants. CDC ceased paying rent on November 1, 1989, yet continued to occupy the leased premises.

On October 3, 1990, IDOT filed a forcible entry and detainer complaint against CDC. CDC filed a seven-count counterclaim on November 18, 1991, alleging that the State had engaged in race discrimination in violation of 42 U.S.C. §§ 1981 and 1982 (counts I and II); IDOT Director Kirk Brown (Brown), in his official capacity, had violated United States Department of Transportation (USDOT) regulations (count III), and the fourteenth amendment to the United States Constitution and 42 U.S.C. § 1983 (count IV); the State and Brown had breached the covenant of quiet enjoyment, violated CDC's right to exclusive peaceful possession, and violated 42 U.S.C. §§ 1981, 1982, and 1983, and USDOT regulations (counts V and VI); and the State and Brown had breached a verbal agreement to grant CDC a five-year option to renew the 1988 lease and had violated USDOT regulations (count VII). The counterclaim sought injunctive relief, compensatory damages in excess of $1.7 million, punitive damages exceeding $2 million, and other relief.

On September 1, 1992, IDOT filed a motion requesting use and occupancy pending the outcome of the litigation. The court ruled that, by remaining on the premises, CDC obligated itself to pay rent. The court rendered a judgment for $162,300, based on the value of rental payments for the period of November 1, 1989, through April 30, 1993, and ordered CDC to pay IDOT $3,865 for each month that it continued to remain on the premises.

On July 27, 1993, the court dismissed the counterclaim without prejudice to its being refiled in the Illinois Court of Claims and applied Supreme Court Rule 304(a) (134 Ill.2d R.304(a)) language to its use and occupancy judgment.

I

CDC contends that the circuit court's grant of use and occupancy to IDOT, pursuant to the Forcible Entry and Detainer Act (735 ILCS 5/9--101 et seq. (West 1992)), for the period of November 1, 1989, through April 30, 1993, was erroneous because the statutory prerequisites for use and occupancy were not satisfied, the court did not consider an offset of recoupment, and use and occupancy may be awarded only on a prospective basis.

A

Under section 9--201(2) of the Forcible Entry and Detainer Act, a court may award use and occupancy "[w]hen lands are held and occupied by any person without any special agreement for rent." (735 ILCS 5/9--201(2) (West 1992).) CDC argues that a special agreement for rent, the lease, existed. CDC ceased paying rent on November 1, 1989, yet continued to occupy the leased premises. A lessee's obligation to pay rent continues as a matter of law, even though the lessee may ultimately establish a right to rescind the lease, vacate the premises, or obtain other relief. (Keating v. Springer (1893), 146 Ill. 481, 496-98, 34 N.E. 805; City of Chicago v. American National Bank (1980), 86 Ill.App.3d 960, 963, 42 Ill.Dec. 1, 408 N.E.2d 379.) Here, the lease provided that IDOT could cancel or terminate the lease without notice and that IDOT could enter and repossess the premises following a default by CDC of any of the covenants or agreements of the lease. Because one of the incidents of default was failure to pay rent, IDOT declared the lease terminated and filed an action for forcible eviction to regain possession. As the lease was no longer valid, CDC occupied the land without any special agreement for rent and the requirements of section 9--201(2) were satisfied.

CDC also argues that a full evidentiary hearing was required before the circuit court could find that the lease had been terminated. The only authority CDC cites is section 9--106 of the Forcible Entry and Detainer Act, which states, in relevant part:

"The defendant may under a general denial of the allegations of the complaint offer in evidence any matter in defense of the action." (735 ILCS 5/9--106 (West 1992).)

This section permits CDC to offer evidence, but in the absence of a proffer of evidence does not require an evidentiary hearing before use and occupancy are granted. Here, CDC proffered no evidence; thus, no evidentiary hearing was required.

B

CDC also contends that the court erroneously failed to hold an evidentiary hearing to determine the reasonable value of use and occupancy, including any reduction for recoupment. CDC cites Keating (146 Ill. at 495-98, 34 N.E. 805) for the proposition that the issuance of a use and occupancy order without regard to the condition of the premises is erroneous. In Keating, the circuit court refused to admit evidence by a tenant that a nearby building erected by his landlord obstructed the sunlight. The Illinois Supreme Court found that the offered testimony should have been received "in order that any damages, which the defendant may have sustained thereby, might be recouped in reduction of the amount of recovery." (Keating, 146 Ill. at 497, 34 N.E. 805.) Keating requires the circuit court to accept offered evidence of recoupment, but it does not prevent a court from granting use and occupancy without considering recoupment. Although it brought a counterclaim against IDOT and others for breach of contract, CDC did not contest the reasonableness of the use and occupancy award or request a hearing on recoupment. As the circuit court stated, "the lessee in this case has a counterclaim which will be heard in due course. If the lessee prevails in that counterclaim, the lessee will be entitled to money judgment." Accordingly, the circuit court did not erroneously deny CDC an evidentiary hearing on the reasonable value of the use and occupancy award.

C

CDC argues that the circuit court can award use and occupancy only prospectively. The Forcible Entry and Detainer Act contains no such restriction, and CDC cites no authority for its argument. Furthermore, courts have awarded use and occupancy for periods preceding the action. (Brackett v. Sedlacek (1983), 116 Ill.App.3d 978, 982-83, 72 Ill.Dec. 584, 452 N.E.2d 837.) As such, the award of use and occupancy dating back to the initial cessation of rental payments was not erroneous.

II

IDOT contends that CDC's counterclaim was properly dismissed because (1) pursuant to...