Shaker & Associates, Inc. v. Advanced Multiuser Technologies Corp.
Case Date: 06/30/2000
Court: 1st District Appellate
Docket No: 1-99-1679
Shaker and Associates, Inc., v. Medical Technologies Group, Inc., No. 1-99-16791st District, June 30, 2000SECOND DIVISION
PRESIDING JUSTICE COUSINS delivered the opinion of the court: The plaintiff gave the defendant a five-year lease from February 1, 1994, through January 31, 1999, for commercial officespace in an office building occupied by numerous tenants. The defendant alleges that once it took possession of thepremises it encountered a variety of defects in the building that ultimately rendered the space unusable for its business. Thedefendant stopped paying rent in September 1994. The plaintiff filed a forcible detainer action on September 26, 1994, butthe defendant surrendered possession on December 20, 1994, before the date of the trial. On December 6, 1994, the plaintiff filed this action seeking all rents until the end of the lease as well as attorney fees. Thedefendant pled various affirmative defenses and also counterclaimed alleging breach of the lease, fraud and negligence.After the defendant twice amended the counterclaims and affirmative defenses, the trial court dismissed them. On October7, 1998, the court granted summary judgment for the plaintiff, awarding rents from the time the defendants stopped payinguntil the time that the plaintiff was able to relet the premises. The court also awarded attorney fees. The defendant appeals the trial court's summary judgment award of lost rents and attorney fees and the dismissal of itscounterclaims. The defendant argues that the court erred: (1) in interpreting the lease so as not to include a duty to repair thealleged defects; (2) in dismissing the defendant's counterclaims and affirmative defenses relating to constructive eviction;and (3) in its assessment of damages, particularly the inclusion of lost rents after the defendant quit the premises. We affirm. BACKGROUND The defendant, Medical Technologies Group, Limited (Medtech), is in the business of reviewing claims for medicalbenefits. On November 30, 1993, Medtech entered into a five-year lease from February 1, 1994, through January 31, 1999,with the plaintiff, Shaker & Associates, Inc., doing business as Shaker Management Company (Shaker), for commercialoffice space in Oak Park. The premises were located in an office building shared by numerous tenants. The rent was $4,465per month. As agreed to under the lease, Shaker built out the premises and made certain improvements in order to makethem suitable for Medtech's business. Medtech took possession in mid-January 1994. Shaker alleges that Medtech was consistently late in its rent payments. In September 1994, Medtech stopped paying rentaltogether. Shaker then served Medtech with a five-day notice and filed a forcible detainer action on September 26, 1994.Medtech vacated the premises on December 20, 1994, shortly before the trial date. On December 6, 1994, Shaker filed this suit seeking to collect all rents until the end of the lease as well as attorney fees.Shaker also named Anne Gose, Medtech's chief executive officer, and Ralph Menezes, another officer of Medtech, asdefendants, alleging that they had guaranteed the lease. Shaker found a new tenant for the premises starting on February 1,1997. Medtech filed a countercomplaint and affirmative defenses on February 14, 1995. Medtech alleged that from the beginningof its occupancy it encountered various defects in the building, which eventually made it unable to continue its businessthere. In particular, Medtech alleged that Shaker did not provide adequate air conditioning in the summer or heat in thewinter. According to Medtech, this problem caused Gose to be hospitalized for heat exhaustion on July 14, 1994, causedone employee to quit and made various other employees ill, and forced the office to be closed on at least one afternoon.Medtech also alleged that frozen pipes and broken skylights caused flooding of the office and that Shaker failed to providecleaning service and light bulbs as agreed in the lease. Medtech set out three counts, alleging: (1) that Shaker had violated the express terms of the lease by not providing heat andair conditioning, not providing cleaning services, not providing light bulbs, not keeping the plumbing in satisfactorycondition and not making repairs; (2) that Shaker had committed fraud by agreeing to provide heat and air conditioningwhen it knew or should have known that the system did not function properly; and (3) that Shaker was negligent in failingto inform Medtech of the defective heating, ventilation and air-conditioning (HVAC) unit. Nevertheless, the counterclaimdid not specify how Medtech had been harmed by the alleged defects or when the defects occurred. Upon Shaker's motionthe trial court dismissed Medtech's counterclaims and struck its affirmative defenses. The counterclaim based on negligencewas dismissed with prejudice, but the other counts and defenses were dismissed with leave to replead. On December 14, 1995, Medtech filed its first amended counterclaim and affirmative defenses. This pleading containedcounts for breach of contract and fraud. The allegations of the original countercomplaint were repeated, but withsignificantly more detail. The complaint set out a clause of the lease that purportedly obligated Shaker to maintain theheating and cooling system, and then charged: "Notwithstanding Shaker's contractual obligations, Shaker breached the agreement by; (a) Beginning on or around February 1, 1994 and continuing until on or around December 20, 1994, Shaker failed toprovide Medtech with sufficient heat to the premises to allow for comfortable occupancy of the building. Thetemperature on the premises was regularly measured in the 48-54 [F]arenheit range in the winter, early spring and fallmonths of 1994; (b) Beginning on or around June, 1994 and continuing throughout the late spring, entire summer and early fall,Shaker failed to provide adequate air conditioning for comfortable occupancy of the building. The temperature on thepremises regularly exceeded ninety degrees [F]arenheit on a regular basis during the summer months of 1994[.]" Shaker alleged that "[t]his failure rendered the premises unusable for the commercial purpose of Medtech and insufficientfor comfortable occupancy and quiet enjoyment" and that it caused loss of business income. The amended counterclaimadditionally alleged that Shaker did not install phone lines as required, there were holes in the walls, the windows would notopen, and the premises were 400 square feet smaller than Shaker had claimed. On February 19, 1997, the trial courtdismissed the counterclaims under sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619(West 1996)), with leave to replead the breach of contract claim. Medtech filed a second amended counterclaim on May 28, 1997. This complaint alleged that Shaker breached the expressterms of the lease as well as the covenant of quiet enjoyment. The only basis that Medtech gave in this pleading for itsclaim of breach, however, was the alleged failure to provide heat and air conditioning. In this complaint Medtech did notprovide specifics about when the HVAC unit had malfunctioned, exactly how hot or cold it became, and how this causeddamages. On Shaker's motion, the trial court dismissed the breach of contract counterclaim and the correspondingaffirmative defenses with prejudice under section 2-615. 735 ILCS 5/2-615 (West 1996). The trial court, however, did notdismiss Medtech's affirmative defense that Shaker was not entitled to any rents for the period after it found a new tenant forthe premises. The trial court also struck without prejudice Gose's and Menezes' affirmative defenses to the claim against them asguarantors of payment of rent. Gose repled the affirmative defense, and Shaker's count against her remains pending beforethe trial court. Shaker voluntarily dropped its claim against Menezes. On October 7, 1998, the court granted summary judgment to Shaker on count I of its complaint for lost rent in the amountof $176,438.14. This figure represented rents from September 1994, when Medtech stopped paying rent, until February1997, when Shaker was able to relet the premises. The court denied Shaker's request for rents covering the full five years ofthe lease. The court also awarded Shaker $50,000 in attorney fees, an amount that had been stipulated to by the parties. Medtech now appeals the summary judgment award of lost rents and attorney fees as well as the dismissal of itscounterclaims and affirmative defenses. Medtech argues that the trial court's dismissal of its affirmative defenses andcounterclaims was based on an erroneous reading of the lease. Medtech also claims that the summary judgment ruling wasin error in including damages for lost rent after Medtech left the premises and in granting Shaker attorney fees. ANALYSIS We first address Medtech's claim that the trial court erred in dismissing its counterclaims and striking its affirmativedefenses under sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 1996)). Inreviewing the dismissal of a complaint under section 2-615 (Doe v. McKay, 183 Ill. 2d 272, 274, 700 N.E.2d 1018, 1020(1998)) and section 2-619 (Health Cost Controls v. Sevilla, 307 Ill. App. 3d 582, 586, 718 N.E.2d 558, 562 (1999)), weapply a de novo standard of review. I Medtech initially contends that the trial court's dismissal of its counterclaim and defenses related to breach of contract isbased on an erroneous interpretation of the lease. According to the trial court's interpretation, the lease did not impose anyduty on Shaker to provide heat and air conditioning. The disputed portion of the lease provides as follows: "As long as the Tenant is not in default of the Lease, Landlord shall provide the following facilities and services toTenant without additional charge (except as otherwise provided herein or as is included in Adjustment or AdditionalRent): 1. Electricity to operate the Building's central air conditioning and heating systems daily from 8:00 A.M. to 8:00 P.M.(Saturday to 12:00 P.M.), Sundays and holidays excepted, to provide a temperature and humidity condition which, inLandlord's reasonable discretion or by governmental regulation, is necessary for the comfortable occupancy of theBuilding. Notwithstanding the foregoing, Landlord shall not be responsible for temperature and humidity variationsin the Premises which are caused by Tenant's not meeting or exceeding a density factor of one person per one hundredsquare feet of the Premises, a connected electrical loan of 2 |
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