Third Establishment, Inc. v. 1931 North Park Apartments
| Decision Date | 05 February 1981 |
| Docket Number | No. 79-2223,79-2223 |
| Citation | 93 Ill.App.3d 234,417 N.E.2d 167,48 Ill.Dec. 765 |
| Parties | , 48 Ill.Dec. 765 THIRD ESTABLISHMENT, INC., Plaintiff-Appellee, Cross-Appellant, v. 1931 NORTH PARK APARTMENTS, a Limited Partnership and AM Foods, Inc., a corp., Defendant-Appellant, Cross-Appellee. |
| Court | United States Appellate Court of Illinois |
Block, Levy & Becker, Chtd., Chicago (Alvin R. Becker, Chicago, of counsel), for plaintiff-appellee and cross-appellant.
Emil Shafran, Robbins, Coe, Rubinstein & Shafran, Ltd., Chicago, for defendant-appellant and cross-appellee.
The issue in this case is whether the lessor or its lessee has the right to insurance proceeds on contents owned by the tenant after a fire damaged or destroyed the contents. The trial court granted summary judgment for the lessee holding that the lessor had no claim to the proceeds. It also denied the lessee's claim for attorney's fees. Both parties appealed.
We affirm.
The pleadings and other items introduced into evidence disclose the following:
The defendant, 1931 North Park Apartments (hereinafter called North Park), through its predecessor in interest leased certain real property located at 1944 North Clark Street in Chicago to Prestige Restaurant. Prestige assigned its interest in the leasehold to Le Pub, Inc. with the consent of North Park. AM Foods, Inc. (hereinafter AM), the nominal defendant, is the successor in interest to Le Pub, Inc. Le Pub, Inc. then subleased the property to the plaintiff, Third Establishment, Inc. (hereinafter called Third Establishment). Third Establishment alleged in its complaint that at no time prior or subsequent to the execution of the lease between North Park and Prestige (hereinafter called the top lease) did North Park ever lease, transfer, own or place any tangible property in the demised premises, but that all of the tangible personal property therein was owned by Third Establishment or AM. North Park admitted this allegation. Third Establishment further alleged that the trade fixtures were placed upon the premises by Third Establishment and AM and that North Park did not pay or contribute for said improvements or betterments and had no ownership or other interest therein. North Park denied this claim in that it claimed a right to the insurance proceeds on the fixtures. It did not at any time, in a verified or unverified pleading, allege or suggest that it owned the fixtures prior to their destruction. In his affidavit Daniel E. Reilly, president of Third Establishment, reiterated the statement that North Park placed no personal property on the premises. He also stated that Third Establishment paid personal property taxes on the property contained within the premises and claimed depreciation expense on its corporate income tax return for that property owned by it. Anthony DeRosa, an officer of AM, in his affidavit also stated that North Park at no time placed personal property in the premises but that all the property contained therein was the property of AM and/or Third Establishment.
The top lease consisted of two portions, a form lease, parts of which had been stricken out, and a fourteen page rider. A typed proviso in the form lease stated that in case of any inconsistency or ambiguity between the provisions of the rider and the provisions of the printed lease, the provisions of the rider would control. Among the provisions of the form lease were the following:
"9. CONDITION OF THE PREMISES: Lessee has examined the premises before signing this lease and is satisfied with the condition thereof, excepting only such alteration, improvements, repairs, decorating and cleaning, if any, which are specifically provided for herein. Lessee's taking possession shall be conclusive evidence as against Lessee that the premises were in good order and satisfactory condition when Lessee took possession hereunder.
No promise of Lessor to alter, remodel, improve, repair, decorate or clean the premises or any part thereof, and no representation respecting the condition of the premises or the Building, has been made by Lessor to Lessee, unless the same is contained herein or made a part hereof. At the termination of this lease by lapse of time or otherwise, Lessee shall return the premises and all equipment and fixtures therein in as good condition as when Lessee took possession, ordinary wear and tear excepted, failing which Lessor may restore the premises, equipment and fixtures to such condition and Lessee shall pay the cost thereof upon request.
The rider contained the following relevant provisions:
Lessee shall furnish to Lessor and keep in full force and effect at all times during the term of this Lease, one or more policies of insurance issued by responsible insurance companies insuring the Lessor and the Premises against claims, damages and liens by reason of the sale or giving away on or from the Premises of any fermented alcoholic or other spirituous beverages, * * *.
(a) Bodily injury: * * *
(b) Injury to means of support: * * *
(c) Injury to property: * * *
LESSEE shall also keep the Lessor insured in responsible insurance companies against the following risks:
(a) Loss or damage by breakage or otherwise to all plate glass in the Premises; and
(b) All statutory and common law liability for damages on account of injury, including death, sustained by any person or persons, including the employees of the parties hereto, while within or upon the Premises or about the ways and entrances thereto. * * *
LESSEE shall also carry Workmen's Compensation Insurance.
LESSEE shall also insure the furnishings and fixtures against loss by casualty of any kind.
In the event of substantial damage to or destruction of the demised premises by fire or other casualty, Lessor shall within sixty (60) days of the date of such casualty have the right to elect and shall notify the Lessee in writing of its election, either to (a) terminate this lease as of the date of such casualty, or (b) repair, restore or rehabilitate the said premises, in which latter event this lease shall not terminate but the rent shall, from the date of such casualty, abate in the ratio which the portion of the premises rendered untenantable by such casualty bears to the portion of the premises thereof remaining usable, until the premises shall have been restored to a tenantable condition, provided that the extent of such restoration shall always be limited to the replacing of the premises to a condition reasonably similar to that existing before the occurrence of such casualty.
In the event Lessor shall elect to repair, restore or rehabilitate the said premises, the Lessor shall commence such work within thirty (30) days after the making of the aforesaid election and shall complete such work within a reasonable time thereafter; and upon the failure of Lessor to replace the premises as aforesaid within such reasonable time the Lessee may terminate this lease, subject to reasonable delays caused by adjustment of the insurance, strikes, labor difficulties, or any other cause beyond Lessor's control.
In the event that the premises are damaged or partially destroyed by fire or other casualty, and such damage or destruction is less than substantial damage to or destruction of the demised premises as hereinafter defined, Lessor shall repair, restore or rehabilitate the said premises to a condition reasonably similar to that existing before the occurrence of such casualty * * *."
North Park also relied on certain provisions of the sublease between Le Pub as lessor and Third Establishment as lessee, to which North Park was not a party. The provisions of the sublease to which it referred are: Article III, section 4 which provided that upon substantial damage by fire or other cause the proceeds of any insurance policy provided for by the sublease should be paid to the lessor of the sublease (Le Pub of which AM is the successor), the lessee of the sublease (Third Establishment) waiving any claim that it might have; Article IV, section 4 which provided that lessee agreed to keep premises including personal property in good repair, loss by fire excepted; Article VII, section 4 which provided that lessee would maintain fire insurance on personal property or equipment leased under the sublease and such other insurance as for the protection "of itself and/or lessor and/or the owner, as the lessor may from time to time reasonably require"; Article VII, section 5 which provided that the lessee should maintain for the benefit of the lessor and the lessee, as their respective interests may appear and the lessor may direct, fire insurance with extended coverage upon the leasehold improvements; and Article XVI, section 2 which provided that the top lease was incorporated into the sublease and should govern in case of conflict.
Third Establishment obtained a policy from the Illinois Fair Plan insuring Third Establishment, North Park, Le Pub, and AM. The policy insured...
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