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T.C.T. Building Partnership v. Tandy Corp.

Case Date: 05/31/2001
Court: 1st District Appellate
Docket No: 1-00-1749 Rel

FOURTH DIVISION

FILED: 05/31/01

No. 1-00-1749

T.C.T. BUILDING PARTNERSHIP, an)APPEAL FROM THE
Illinois Partnership,)CIRCUIT COURT OF
)COOK COUNTY
Plaintiff-Appellant,)
)
v.)
)
TANDY CORPORATION, a TexasCorporation,)HONORABLE
)ELLIS E. REID,
Defendant-Appellee.)JUDGE PRESIDING.

JUSTICE HOFFMAN delivered the opinion of the court:

The plaintiff, T.C.T. Building Partnership, appeals from ajudgment entered in favor of the defendant, Tandy Corporation, inthis action to enforce a lease guaranty. For the reasons whichfollow, we reverse the judgment of the circuit court and remandthis cause for further proceedings.

The relevant facts are not in dispute. DuBose Corporation(DuBose) leased a parcel of commercial real estate to Color Tile ofIllinois, Inc. (Color Tile). The lease was for an original term oftwenty years commencing on March 5, 1975, and terminating on March4, 1995, and granted Color Tile an option to extend the lease forfour additional terms of five years each. The lease provided,however, that, to exercise the option, Color Tile was required togive DuBose written notice of its intent to renew the lease "atleast six (6) months prior to the expiration of the original term*** or six (6) months prior to the expiration of the term of anyrenewal or extension". The defendant executed a guaranty of ColorTile's obligations under the lease. Under the terms of theguaranty, the defendant agreed, in part, to:

"absolutely and unconditionally guarantee[] to Lessor,its successors and assigns, the prompt and punctualpayment of all rents and all other sums to be paid by theLessee under said lease during the full term thereof, andduring the period of any extension or renewal thereof,and the full, complete and faithful performance by Lesseeof all of the provisions, covenants, agreements, conditions and stipulations in said Lease contained, to bekept, observed and performed by the Lessee during thefull term of said Lease and during the period of anyextension or renewal thereof * * *."

On March 10, 1975, the plaintiff purchased the property which wasthe subject of the lease and became the successor to DuBose'sinterest in both the lease and the defendant's guaranty.

On September 6, 1994, Color Tile gave the plaintiff writtennotice of its intent to renew the lease for an additional five-yearterm. The parties agree that this notice was not given, asrequired by the lease, at least six months prior to the March 4,1995, termination of the original lease term. In order to strictlycomply with the notice provision, Color Tile would have to havegiven notice on or before September 4, 1994. The plaintiff,nonetheless, accepted the notice and extended the term of the leasefrom March 5, 1995, to March 4, 2000.

In January of 1996, Color Tile filed for protection underChapter 11 of the United States Bankruptcy Code (11 U.S.C