Wanderer v. Plainfield Carton Corp.

• Decision Date: 01 January 1958
• Parties: Herbert J. WANDERER, Trustee of Trust Created by Agreement Dated
• Court: United States Appellate Court of Illinois

Page 630

351 N.E.2d 630

40 Ill.App.3d 552

Herbert J. WANDERER, Trustee of Trust Created by Agreement

Dated January 1, 1958, with Plainfield Building

Corporation, otherwise known as

Plainfield Trust, Plaintiff-Appellee, v. PLAINFIELD CARTON CORP., an Illinois Corporation, et al.,

Defendants- Appellants.

PLAINFIELD CARTON CORP., an Illinois Corporation, Counterplaintiff and Third-Party Plaintiff-Appellant, v. Herbert J. WANDERER, Individually, and Acoustifiex

Corporation, an Illinois Corporation,

Counterdefendants and Third-Party

Defendants-Appellees.

No. 75--414.

Appellate Court of Illinois, Third District.

July 21, 1976.

Motion to Dismiss Third-Party Defendant Granted Aug. 4, 1976.

Arthur T. Susman, Chicago, of counsel; Prins, Flamm & Susman, Ltd., Chicago (Arnold M. Flamm and Robert D. Allison, Chicago, on the brief), for defendants-appellants.

Theodore Bednarek, Joliet, of counsel; Thomas, Wallace, Feehen & Baron, Ltd., Joliet, Matthews, Jordan, Dean, Eichmeier & Petersen, Aurora, for plaintiff-appellee.

ALLOY, Presiding Justice:

Defendant Plainfield Carton Corporation appeals from a judgment of the Circuit Court of Will County in the sum of $25,214.50 for overdue rent and other damages, which was entered in favor of Herbert Wanderer, as Trustee, against defendant. The judgment resulted from a bench trial. Wanderer was the landlord of certain premises leased by the defendant for a five-year term, and he filed the instant action when Plaintifield abandoned the premises before the term expired.

On appeal in this Court, defendant Plainfield contends that the trial court should have credited defendant (as an offset to its liability for delinquent rent) with rental received and to be received by the landlord, Wanderer, from a new tenant during the balance of the original lease term, to the extent that those rentals exceeded the rent called for in the original lease.

Defendant also asserts that the trial court was in error in awarding plaintiff certain portions of the total judgment, including $7,868 in reletting expenses and $3,932.50 as attorney's fees incurred in enforcing the covenants of the lease between Wanderer and Plainfield Carton Corporation. Defendant also contends that the court improperly refused to order plaintiff Wanderer to produce the trust agreement under the authority of which he claimed to be acting.

The record discloses that Wanderer, as trustee for Plainfield Building Corporation, or Plainfield Trust, entered into a written agreement with Plainfield Carton Corporation to lease the premises under consideration for five years beginning June 1, 1971. The property consisted of an industrial building with 27,000 square feet of floor space, for which defendant was to pay $1,750 monthly and, also, to pay any real estate taxes thereon. The tenant Plainfield Carton also had an option to lease an adjoining $9,000 square feet of space for another $5,500 yearly, and, also, had an option to renew the lease generally at the end of the five year period for a higher rental. Under the lease, plaintiff Plainfield Trust was to be responsible for repairing the roof and certain walls, and the lessee had the responsibility for all other maintenance.

After Plainfield Carton had occupied the structure for only six months, it determined to consolidate with its Chicago operations and substantially moved out of the premises. After it had made an unsuccessful attempt for a few months to seek a replacement tenant, defendant Plainfield Carton asked the landlord Wanderer if he would help find a new tenant. Wanderer agreed to look for a tenant and, a year later, in February, 1973, Wanderer informed defendant that Acoustiflex Corporation would begin a new five-year lease of the building on March 1, 1973. Wanderer asked that the tenant immediately remove from the premises the equipment and material remaining there. The tenant promptly complied with the request.

Defendant Plainfield Carton had continued paying rent from the time it substantially vacated the premises until September 1972. It was, therefore, six months in arrears in rent payments at the time Acoustiflex moved into the premises, and it also owed plaintiff for some real estate taxes for this period. This amounted to $10,500 in rent for the six months and $2,914 in taxes. There was the undisputed amount of cost to plaintiff Wanderer in reletting the premises to Acoustiflex of $6,768 in broker's commissions and $1,100 in attorney's fees. The trial court awarded these amounts to plaintiff together with $3,932.50 in attorney's fees arising from the current litigation, for a total award of $25,214.50.

Defendant's theory in the trial court, which it did not press very vigorously on appeal, was that plaintiff Wanderer's response to a request for help in finding a new tenant was sufficient to constitute him an agent of Plainfield Carton Corporation for the purpose of subletting the premises. The defendants thus argued that it was entitled to all rents received from Acoustiflex out of which it would owe Wanderer the monthly rent according to the original lease. Plainfield Carton also advances another theory on appeal, claiming a right of set-off on an interpretation of Clause 10 of the lease, which concerns the right of the landlord to re-enter and relet the premises upon abandonment by the tenant.

Landlord Wanderer correctly points out the general rule that a party may not advance a completely new theory for the first time on appeal (Kravis v. Smith Marine, Inc. (1975), 60 Ill.2d 141, 147, 324 N.E.2d 417). We believe, however, that the trial court erred in its determination of damages for reasons which we will discuss and we deem it appropriate to resolve this cause on the merits on the basis of the respective contentions of the parties.

We note that by the terms of the new lease Acoustiflex was to pay $2,820 monthly, which included rental of the 9,000 square feet adjacent to the main building. Acoustiflex had only to pay those real estate taxes which exceeded $2,200 each year, and the landlord also undertook broader responsibilities of maintenance and repair than the landlord had in the original lease to defendant.

The trial court asserted it would be pure speculation to attempt to compare the benefits to the landlord from the original lease on one hand, and the new Acoustiflex lease on the other. We believe, however, that a fair and proper comparison can be made which shows that the landlord has in fact profited from the new lease during the period specified for the continuation of the old lease while Acoustiflex occupied the building.

Under the Plainfield Carton lease, the tenant was to pay $21,000 a year in rent. Assuming that the landlord would have gotten maximum benefit from that lease, he would have received $26,500 yearly including the $5,500 for the optional rental of the remaining 9,000 square feet. For the same premises he is now receiving $33,840 yearly, or $7,340 more per year than under the original lease (with the extra 9,000 square feet included on the optional rent basis, assuming that Plainfield Carton had occupied that portion). The landlord must, however, pay the first $2,200 in real estate taxes for which the tenant was responsible under the original lease, so that the landlord actually receives an excess of only $5,140 more a year than in the old lease arrangement.

There were 39 months, or 3 1/4 years, remaining in the original lease term when Acoustiflex began paying rent in March, 1973. The excess rent received by the landlord during this period of time, in excess of what he would have received for the same premises under the original lease (and the optional portion), had the original lease remained in effect, comes to a total of $16,705 of additional rent received.

We, therefore, have the issue raised as to whether this excess amount accruing to the landlord, as a result of defendant's abandonment of the premises, should be credited to defendant. There was no question in this case of whether the landlord had a duty to mitigate damages by reletting the premises when the tenant abandons in the course of the lease term, a question which is still somewhat unsettled in this State. (See Reget v. Dempsey-Tegler (5th Dist. 1968), 96 Ill.App.2d 278, 280--281, 238 N.E.2d 418; Wohl v. Yelen (1959), 22 Ill.App.2d 455, 461--465, 161 N.E.2d 339).

In the cause before us, the landlord did relet, for at least the monthly rent which would have been paid by Plainfield Carton, and to that extent certainly relieved Plainfield Carton of its obligation during the remaining portion of the lease term as long as the new tenant paid rent. The question we are called upon to deal with, however, is whether the excess rent realized by the landlord during this time, in excess of what he would have received by the terms of the original lease, should be credited against unpaid rent owed by the original tenant from the period prior to the Acoustiflex occupancy after crediting the landlord with other expenses of the landlord by reason of the new tenancy.

Generally, a plaintiff suffering injury is entitled only to a cause of action for damages Actually sustained. (Smith v. Hill (1958), 12 Ill.2d 588, 595, 147 N.E.2d 321.) As to contractual breaches particularly, as expressed by the court in King v. Gilson (1863), 32 Ill. 348, 355:

'(I)t seems to be a rule of general application, that in all actions on contract, sounding in damages, * * * the plaintiff is entitled to recover damages only to the extent of the injury sustained. If circumstances exist which mitigate the injury, the must be considered in measuring the damages.'

This general rule would also control determination of the measure of damages normally to be applied in cases of breach of a lease agreement. This measure of 'actual loss' has been set forth in numerous cases which indicate that damages for breach of contract are compensatory in nature, in restitution for the harm caused, and should...