Vulcan Materials Co. v. Holzhauer, 4-92-0018

• Court: Appellate Court of Illinois
• Writing for the Court: GREEN
• Citation: Vulcan Materials Co. v. Holzhauer, 234 Ill.App.3d 444, 599 N.E.2d 449, 174 Ill.Dec. 665 (Ill. App. 1992)
• Decision Date: 13 August 1992
• Docket Number: No. 4-92-0018,4-92-0018
• Parties: , 174 Ill.Dec. 665 VULCAN MATERIALS COMPANY, a Corporation, Plaintiff-Appellant, v. Norman HOLZHAUER and Janice Holzhauer, n/k/a Janice Holzhauer Shay, Defendants-Appellees.

Page 449

599 N.E.2d 449

234 Ill.App.3d 444, 174 Ill.Dec. 665

VULCAN MATERIALS COMPANY, a Corporation, Plaintiff-Appellant, v. Norman HOLZHAUER and Janice Holzhauer, n/k/a Janice Holzhauer Shay, Defendants-Appellees.

No. 4-92-0018.

Appellate Court of Illinois Fourth District.

Aug. 13, 1992.

Rehearing Denied Oct. 6, 1992.

Fellheimer, Travers & Engelman, Ltd. (Robert M. Travers David J. Babb, Jr., of counsel), Pontiac, for plaintiff-appellant.

Strong, Blakeman & Schrock, Ltd. (Kenneth L. Strong, of counsel), Pontiac, for defendants-appellees.

Presiding Justice GREEN delivered the opinion of the court:

On May 8, 1985, plaintiff Vulcan Materials Company (Vulcan) filed suit in the circuit court of Livingston County against defendants Norman and Janice Holzhauer seeking a declaratory judgment that a lease of realty for a quarrying operation was still in force. Defendants are the lessors and plaintiff is the assignee of the lessee, Pontiac Stone Company (Pontiac). The pleadings indicated defendants had notified plaintiff that the lease was terminated because of plaintiff's breach by failure to work the premises when doing so would have been economically feasible thus constituting an abandonment of the premises within the meaning of the lease. Plaintiff contended that it had not committed such an abandonment and even if it had, defendants had waived any abandonment by accepting royalty payments.

Both sides moved for summary judgment, contending the matters furnished in support of their motions showed they were entitled to judgment as a matter of law. On February 6, 1987, the circuit court entered a summary judgment in favor of plaintiff, deciding the lease was in full force and effect and denying defendants' requested relief. Defendants appealed to this court. We held that questions of fact existed and reversed and remanded for further proceedings. Vulcan materials Co. v. Holzhauer (1987), 161 Ill.App.3d 1164, 122 Ill.Dec. 611, 526 N.E.2d 1150 (table) (unpublished order under Supreme Court Rule 23).

On December 15, 1988, after remand, defendants filed a countercomplaint in forcible entry and detainer (Ill.Rev.Stat.1987, ch. 110, par. 9-101 et seq.), accompanied by a request that both the declaratory judgment proceedings and the countercomplaint be tried before a jury. Plaintiff objected to having either action submitted to a jury. The circuit court ruled that the entire proceedings would be presented to a jury but that the jury's verdict in the declaratory judgment action would be merely advisory. The case was tried in this way. On September 23, 1991, the circuit court entered judgment in favor of defendants (1) accepting an advisory verdict for defendants in the declaratory judgment action, and (2) on the verdict for defendants on the countercomplaint in forcible entry and detainer.

Plaintiff has appealed requesting a new trial and contending (1) the use of an advisory jury as to the declaratory judgment claim was improper; (2) the court erred in ruling on instructions; (3) the judgments entered were contrary to the manifest weight of the evidence; and (4) arguments and conduct of defense counsel required the circuit court to grant a mistrial. Plaintiff merely requests a new trial and does not contend that judgment should be entered in its favor. The issues concerning the use of a jury and the instruction of the jury are closely related. However, we hold that the court did not err in the use of the jury but did commit error requiring reversal in ruling on instructions and requests for interrogatories. We consider other issues raised only to the extent that they concern matters which may occur again on retrial. We reverse and remand for a new trial.

Most of the underlying facts are undisputed. On June 4, 1969, defendants and Pontiac entered into a lease agreement authorizing Pontiac to quarry limestone, sand, gravel, and crushed rock from defendants' premises in Livingston County paying 12 cents per ton or 8% of the selling price, whichever was greater, for the quarried substance removed. The agreement also provided for quarterly minimum royalties to be paid regardless of the amount of substance removed. During the years in question here, which were all after the lease had been assigned to plaintiff, these minimum royalties were $5,000 per quarter payable on the first days of April, July, October, and December. In addition, the lessee agreed to pay rental of $200 per acre for certain land occupied by a processing plant and $200 per acre for land not excavated but staked out for planned excavation and thus unavailable for farming.

The terms of the lease provided it extended until December 31, 2005, but would terminate earlier if all the various listed substances had been completely removed. If such substance remained on December 31, 2005, the lessees were granted an option to extend the lease for an additional 10-year period. Pontiac actively mined the northeast corner of the property until 1974, but no mining had taken place thereafter. Vulcan had not mined the property, although it did mine adjacent property which it owned. Nevertheless, from 1974 until March 21, 1985, defendants received a total of $188,000 in advance royalties.

Each section of the lease was given a separate number except that sections 3, 3(a.), 3(b.), 3(c.), and 3(d.) were set forth as separate sections. As far as this litigation is concerned, sections 3 and 3(d.) are the most significant portions of the lease. Section 3 states:

"Lessee shall enter upon said premises and proceed to mine and quarry the sand, gravel and/or limestone therein contained in a good and economical manner so as to take out the greatest amount of sand, gravel or limestone for agricultural purposes or for road purposes with due regard to the development and preservation of the same as a workable quarry. Lessee shall work and mine said premises as aforesaid as steadily and continuously as the market for sand, gravel, crushed rock and/or limestone, and the weather, will permit."

Section 3(d.) provides:

"If, after the actual commencement of quarrying operations on the property, Lessee shall abandon said premises for one year, all rights which Lessee has acquired under this agreement shall, at the option of Owner [defendants], cease. However, the obligation of royalty payments and of required minimum annual and acreage payments and rentals and restoration of ground, etc., herein provided shall still be borne by Lessee to and including the final date of declared abandonment."

Defendants maintained at trial and now maintain on appeal that conditions in recent years have been such that excavating sand, gravel, rock, and limestone was economically feasible and that the failure of plaintiff to do so constituted a violation of paragraph 3 of the lease and an abandonment of the premises within the meaning of paragraph 3(d.) of the lease. Defendants assert they effectively terminated the lease on March 20, 1985, by sending plaintiff a letter declaring the lease had been abandoned for more than one year by the failure of plaintiff to quarry the minerals described in the lease. Plaintiff maintains (1) its failure to excavate did not amount to an abandonment of the premises because it had continued to drain the premises and taken other steps in furtherance of subsequent mining of the sand, gravel, rock, and limestone; and (2) any abandonment by plaintiff was waived by defendants in various ways including acceptance of royalties by defendants after giving notice of termination.

Evidence indicated that in March 1984, plaintiff notified defendants it intended to mine the leased property that year, and a meeting took place on April 11, 1984, at which a mining plan was discussed. At that meeting, Norman Holzhauer stated "I don't care if you [plaintiff] ever quarry the property." He contended he meant that if plaintiff did not want to quarry, others would. Plaintiff's agents who were present testified they understood the statement to mean that defendants did not care if the property was quarried as long as the minimum royalties were paid. Plaintiff relies upon this statement as evidence of waiver by defendants of any requirement that plaintiff work the property to keep the lease alive. Evidence was also presented of other activities of plaintiff in 1983 and 1984 which gave some indication of preparation to quarry.

Originally, plaintiff contended that the submission of the forcible entry and detainer claim to the jury was error. In its reply brief, plaintiff now concedes that under the decision in Twin-City Inn, Inc. v. Hahne Enterprises, Inc. (1967), 37 Ill.2d 133, 225 N.E.2d 630, submission of that portion of the case to the jury was proper. There, an action was brought by a lessor against a lessee seeking possession of realty and unpaid rent. The lessee and its surety were denied a trial by jury, and the court found for the plaintiff. On appeal, the supreme court set aside the judgment and remanded for a new trial.

At the time of Twin-City Inn, Inc., section 11a of the Forcible Entry and Detainer Act (Act) stated that "[i]n any case relating to premises used for residence purposes, either party may demand trial by jury, notwithstanding any waiver of jury trial contained in any lease or contract." (See Ill.Rev.Stat.1965, ch. 57, § 11a.) The defendants in that case contended this language indicated that no right of trial by jury existed in forcible entry and detainer actions unless residential property was involved. The supreme court disagreed, holding the language of section 11a of the Act merely negated jury waivers in cases where residential property was involved. The court further held that the history of forcible entry and detainer actions indicated that all parties had a statutory right to trial by jury in such a case and, at least when claims for rent are involved, the right to trial by jury is constitutional. Language similar to that of former section 11a ...