Gold Realty Group Corp. v. Kismet Cafe

Case Date: 06/30/2005
Court: 1st District Appellate
Docket No: 1-04-3317 Rel

SECOND DIVISION
June 30, 2005


No. 1-04-3317

 

GOLD REALTY GROUP CORPORATION, ) Appeal from the
  ) Circuit Court of
               Plaintiff-Appellee, ) Cook County.
  )  
                     v. )  
  )  
KISMET CAFÉ, INC., d/b/a MUSKIES, and )  
GONEN REHA ARICA, ) Honorable
  ) Sheldon C. Garber,
              Defendants-Appellants. ) Judge Presiding.


JUSTICE WOLFSON delivered the opinion of the court:

The question in this case is whether a party may move forsummary judgment on an issue that was not pled in that party'scomplaint.

The defendants leased property from the plaintiff andoperated a hamburger stand until the property was destroyed by afire. After the fire, the defendants ceased paying rent. Theplaintiff filed a complaint seeking unpaid rent and possessionbased on the failure to pay rent. The plaintiff later moved forsummary judgment, seeking to terminate the lease based on twoprovisions in the lease, neither alleged in the complaint. Thecourt entered summary judgment for the plaintiff, and defendantsappealed. We reverse and remand.

FACTS

The property at issue was destroyed by fire in September2003.

According to the plaintiff's complaint, the defendantsassumed the lease with the plaintiff as of May 15, 1997, for theproperty at 963 West Belmont Avenue in Chicago. The defendantsoperated a hamburger stand known as "Muskies" on the premises. The lease obligated defendants to pay rent to the plaintiff inthe amount of $5,060 per month. Plaintiff alleged:

"7. Contrary to the terms of the Lease, andnotwithstanding [plaintiff's] repeatedrequests for compliance, defendant has failedand refused to pay to [plaintiff] the sum of$27,119.00, representing accrued but unpaidrent and late fees and charges, throughDecember 15, 2003. In addition, the premiseshas been totally destroyed by fire andremains vacant as of the filing of thiscomplaint."

The plaintiff alleged the defendants' failure to pay rentconstituted a default entitling plaintiff to terminatedefendants' possession of the premises. It asked for the amountof unpaid rent and immediate possession.

Attached to the complaint was a copy of the lease and aLandlord's Five Day Notice dated December 8, 2003, providing thelease would be terminated if the unpaid rent was not paid withinfive days.

In the defendants' answer, they admitted they had failed topay rent but denied that such sum was due and owing. Theyadmitted further: "that the premises has been totally destroyedby fire and remains vacant as of the filing of this complaint andaver affirmatively that such destruction abates the obligation ofDefendants to pay rent until such time as the Premises is placedin a tenantable condition by Plaintiff."

The defendants alleged two affirmative defenses: (1) theywere not responsible for unpaid rent after the fire because theirtenancy was not usable; and (2) they were entitled to a setoffpursuant to their counterclaim. They filed a counterclaim fortortious interference with prospective economic advantage basedon plaintiff's alleged interference with a sublease of theproperty. The plaintiff later filed a motion to strike thesecond affirmative defense and the counterclaim, and the courtdismissed the defense and counterclaim without prejudice.

The plaintiff filed a motion for use and occupancy, arguingdefendants had failed to obtain fire insurance and failed tomaintain and repair the property in violation of the lease. Inthe defendants' response, they argued they were not obligated topay use and occupancy because the lease did not require fireinsurance, and defendants were not currently in possession of thespace. In its reply, the plaintiff for the first time arguedParagraph 11 of the lease entitled it to rent while thedefendants repaired the fire damage, or, alternatively, an orderof possession against the defendants. Paragraph 11 provides: "11. In case the Premises shall be rendereduntenantable by fire, explosion or othercasualty, Lessor may, at his option,terminate this lease or repair the Premiseswithin sixty days. If Lessor does not repairthe Premises within said time, or thebuilding containing the Premises shall havebeen wholly destroyed, the term herebycreated shall cease and determine." The court granted the motion for use and occupancy, orderingthe defendants to pay $1,500 per month, beginning April 1, 2004.

The plaintiff then filed a motion for summary judgment,contending paragraphs 11 and 13 of the lease entitled it topossession of the property. Paragraph 13 provides, in part:

"13. If Lessee shall vacate or abandon thePremises or permit the same to remain vacantor unoccupied for a period of ten days ***Lessee's right to the possession of thePremises thereupon shall terminate, with orwithout any notice or demand whatsoever, andthe mere retention of possession thereafterby Lessee shall constitute a forcibledetainer of the premises*** Lessee agrees tosurrender possession of the premisesimmediately."

The plaintiff argued defendants had admitted the propertywas completely untenantable, the landlord had not repaired theproperty, and the property "remains vacant as of the filing ofthis complaint." The plaintiff contended the lease wasterminated by its terms, pursuant to Paragraph 11 and/orParagraph 13.

The defendants' response contended the plaintiff's motionignored the issues raised by the pleadings and raised new issueswhich were not properly before the court. Even if the court wereto consider the plaintiff's argument, the defendants contendedthe lease provisions were waived because the parties "had anagreement that the Defendant would remain the tenant." Thedefendants filed a cross-motion for summary judgment.

During the summary judgment hearing, the plaintiff indicatedit was no longer seeking unpaid rent from the defendants. Thetrial court granted the plaintiff's motion for summary judgment,denied the defendants' cross-motion, and entered an order ofpossession for the plaintiff.

The defendants filed a motion for reconsideration, which thecourt denied.

DECISION

Defendants contend the grant of summary judgment based onallegations not contained in the pleadings (1) violates section2-1005(c) of the Code of Civil Procedure, 735 ILCS 5/2-1005(c)(West 2002), and (2) violates the Fourteenth Amendment by depriving defendants of their property rights in the leasewithout due process of law.

Summary judgment is proper where, when viewed in the lightmost favorable to the nonmoving party, "the pleadings,depositions, and admissions on file, together with theaffidavits, if any, show that there is no genuine issue as to anymaterial fact and that the moving party is entitled to a judgmentas a matter of law." 735 ILCS 5/2-1005(c) (West 2002); HomeInsurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 315,821 N.E.2d 269 (2004). Our standard of review is de novo. HomeInsurance Co., 213 Ill. 2d at 315.

First, defendants contend plaintiff may not move for summaryjudgment based on allegations not contained in the pleadings. They contend such a judgment violates section 2-1005(c), becauseof use of the word "pleadings" in that section. 735 ILCS 5/2-1005(c) (West 2002).

We agree with the defendants that the summary judgmentmotion was based on an issue apart from the complaint. Thecomplaint alleged defendants failed and refused to pay $27,119.00in unpaid rent, which breached the lease. Pursuant to Paragraph19 of the lease, that violation constituted a default entitlingplaintiff to terminate defendants' right to possession. Theprayer for relief asked for the amount of unpaid rent andimmediate possession of the premises. No mention was made in thecomplaint of paragraph 11 or 13 of the lease, nor did thecomplaint allege the lease was terminated by its terms. Theplaintiff cited Paragraph 11 for the first time in its reply insupport of its motion for use and occupancy. In the motion forsummary judgment, the plaintiff contended paragraphs 11 and 13 ofthe lease operated to terminate the lease by its terms, entitlingplaintiff to possession of the property.

Next, we must decide whether a court may grant summaryjudgment based on an issue not properly pled in the complaint. Defendants rely on Pagano v. Occidental Chemical Corp., 257 Ill.App. 3d 905, 629 N.E.2d 569 (1994), and McIntosh v. Cueto, 323Ill. App. 3d 384, 752 N.E.2d 640 (2001). In Pagano, the trialcourt entered summary judgment for the defendant. On appeal, theplaintiff raised for the first time an issue regarding thedefendant's premises as a proximate cause of his injuries. Thecourt found the plaintiff waived the issue by failing to raise itin the trial court. In addition, the court held, the plaintiffnever pled the issue in his complaint. Pagano, 257 Ill. App. 3dat 911. The court said:

"A plaintiff fixes the issues in controversyand the theories upon which recovery issought by the allegations in his complaint. The very purpose of a complaint is to advisethe defendant of the claim it is called uponto meet. [Citation.] In ruling on a motionfor summary judgment, the court looks to thepleadings to determine the issues incontroversy*** a plaintiff's remedy in sucha circumstance is to move to file an amendedcomplaint [under section 2-616(a) or section2-1005(g) of the Code of Civil Procedure]. Having failed to seek relief under eithersection, the plaintiff will not be heard tocomplain that summary judgment wasinappropriately granted because of theexistence of evidence supporting a theory ofrecovery that he never pled in hiscomplaint." Pagano, 257 Ill. App. 3d at 911.

In McIntosh, the issue was whether the plaintiffs' failureto plead equitable estoppel through fraudulent concealment barredthe trial court from considering the issue where it was raised asa part of discovery prior to the motion for summary judgment. The court, citing Pagano, held equitable estoppel and fraudulentconcealment must be pled to be available. McIntosh, 323 Ill.App. 3d at 389-90. The plaintiffs never pled the theory in theircomplaint, nor did they request leave of court to amend theirpleadings. Therefore, the court held, the defendants were notestopped from asserting their statute of limitations defense. Summary judgment for the defendants was affirmed. McIntosh, 323Ill. App. 3d at 391-92.

Although the party awarded summary judgment in this case wasthe plaintiff, we abide by the reasoning set forth in Pagano andMcIntosh.

We are puzzled by the plaintiff's failure to amend itscomplaint to include the issues advanced in its summary judgmentmotion, especially given the number of other motions andresponses generated by the parties. The plaintiff argues thefacts alleged in the complaint were sufficient to give thedefendants notice of the issue. Not really. The theory on whichthe plaintiff was awarded possession of the premises never waspled in its complaint, directly or indirectly. We cannot condonethis omission.

In deciding a motion for summary judgment the courtconsiders the pleadings to determine what the issues are and inso doing it presupposes that the pleadings join the issue. Olivieri v. Coronet Insurance Co., 173 Ill. App. 3d 867, 870, 528N.E.2d 986 (1987); Metropolitan Sanitary District of GreaterChicago v. Anthony Pontarelli & Sons, Inc., 7 Ill. App. 3d 829,839, 288 N.E.2d 905 (1972). The trial court entered summaryjudgment for the plaintiff on an issue entirely absent from thepleadings. Accordingly, we reverse the summary judgment for theplaintiff.

We realize, at first blush anyway, our decision seemshypertechnical. After all, the issues based on paragraphs 11 and13 were clearly set out in plaintiff's summary judgment motionand in the flurry of briefs that followed. But there issomething to be said for order and predictability in motionpractice. They foster efficiency and fairness. We impose nogreat burden on this plaintiff. Amending its complaint toconform to its theory would have taken a fraction of the timespent litigating the issue we decide today.

Defendants further contend their due process rights wereviolated by the summary judgment based on an issue not pled inthe complaint. Because we find the judgment was improper underthe Code of Civil Procedure, we need not address theconstitutional issue. Even so, we do not believe defendants' dueprocess rights were violated. At a minimum, procedural dueprocess requires notice, an opportunity to respond, and ameaningful opportunity to be heard. In re Estate of Gustafson,268 Ill. App. 3d 404, 409, 644 N.E.2d 813 (1994). Here,defendants received notice of the plaintiff's summary judgmentmotion, and they were given an opportunity to respond and to beheard. They filed a written response and were allowed to arguetheir position at a hearing on the motion. There was no dueprocess violation.

CONCLUSION

We reverse summary judgment for the plaintiff and remand forfurther proceedings consistent with this opinion.

Reversed and remanded.

HALL, J., concurs. JUSTICE GARCIA, specially concurring:

I agree this case warrants reversal. I do not agree,however, that the reversal should be based on any deficiency inthe pleadings under section 2-1005(c). Both parties agree thisis a forcible entry and detainer action. As such, it "is asummary statutory proceeding to adjudicate and restore rights ofpossession and *** should not be burdened by matters unrelated tothe issue of possession." Subway Restaurants, Inc. v. Riggs, 297Ill. App. 3d 284, 287, 696 N.E.2d 733 (1998). Stateddifferently, all matters related to the issue of possession areproperly before the circuit court to adjudicate and restorerights of possession. As an exhibit to the complaint forforcible entry and detainer, the plaintiff attached a copy of thelease. There is no issue regarding the accuracy of the lease. As part of its motion for summary judgment, the plaintiff reliedon two distinct paragraphs of the lease. Although less thanclear, it appears the trial court relied on either one or bothparagraphs in granting the plaintiff's motion for summaryjudgment.

Following the grant of summary judgment, the defendants intheir motion for reconsideration contended that the basis for thesummary judgment motion was not properly pled in the complaintand therefore violated section 2-1005(c). The circuit court inrejecting the motion, observed that the property at issue shouldnot be allowed to remain vacant, consistent with the intent ofthe statute. See Subway Restaurants, Inc., 297 Ill. App. 3d at288 (limitations imposed by the Forcible Entry and Detainer Actallow the issue of possession to be resolved quickly). After theentry of summary judgment, the trial court was well within itsauthority to "permit pleading to be amended upon just andreasonable terms." 735 ILCS 5/2-1005(g) (West 2002). However,it appears the court did not do so. The only conclusion that canbe reasonably drawn from this is that the trial court believedthe complaint satisfied the pleading requirements of the ForcibleEntry and Detainer Act to allow it to rule on the plaintiff'smotion for summary judgment. See 735 ILCS 5/9-106 (West 2002). Even if we should find this to be an overly generous reading ofthe pleadings, I can find no basis to conclude that the trialcourt erred in ruling on the plaintiff's motion for summaryjudgment where the motion was based on the lease attached andincorporated into the plaintiff's complaint.

Nonetheless, based on the proceedings in the trial court, Iagree that the summary judgment finding for the plaintiff must bereversed.

To the extent the trial court relied on paragraph 13 of thelease to grant the plaintiff's summary judgment motion, the trialcourt erred. As the defendants argue, once the use and occupancyorder was entered as sought by the plaintiff, the premises couldno longer be considered "abandoned" as provided in paragraph 13. Because the plaintiff did not seek leave of court to accept useand occupancy rent without prejudice to its claim of possession(see Eckel v. MacNeal, 256 Ill. App. 3d 292, 294, 628 N.E.2d 741(1993) (trial court entered order granting plaintiff leave toaccept use and occupancy without prejudice)) and the defendantspaid said use and occupancy, paragraph 13 provided no basis forthe trial court to grant summary judgment to the plaintiff.

To the extent the trial court relied on paragraph 11 of thelease to grant the plaintiff's summary judgment, once again thetrial court erred. As best I can determine, fire destroyed theproperty in August 2003. Under the specific terms of paragraph11, in the event fire rendered the premises untentable, theplaintiff could either declare the lease terminated or repair thepremises within 60 days. It did neither. Moreover, theplaintiff actions since the fire are at odds with the provisionsof paragraph 11 suggesting that the provisions of paragraph 11are unavailable to the plaintiff. First, the plaintiff claimsthat the defendant had the responsibility to repair the premisesand thus the plaintiff would not repair the premises within 60days or any other period of time. Second, the plaintiff soughtrent from the defendants from December 2003 through the date theplaintiff filed its complaint, thus the plaintiff cannot claimany timely intention to declare the lease terminated. In anyevent, the defendants' claim of waiver would preclude the entryof summary judgment based on paragraph 11. See Steven W. Barrick& Associates v. Witz, 147 Ill. App. 3d 615, 619, 498 N.E.2d 738(1986) (where landlord failed to give notice that she wouldrequire strict compliance with lease term, landlord waivedbreaches based on prior behavior).

In the context of this appeal, our review de novo is todetermine whether "a material issue of fact exists or [whether]the summary judgment was based upon an erroneous interpretationof the law ***." Pagano, 257 Ill. App. 3d at 909. Because theformer has been made out by the defendants, a reversal iswarranted.