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THIRD DIVISION
MARCH 20, 2002

MODIFIED ON DENIAL OF REHEARING

JUSTICE CERDA delivered the opinion of the court:

This case involves a dispute between plaintiff/counter-defendant, The WolframPartnership, Ltd., an Illinois limited partnership; its general partners,third-party defendants Duncan Henderson and Deirdre Henderson (collectivelyWolfram); defendant/counterplaintiff/third-party plaintiff LaSalle National Bank(LaSalle), as trustee of trust agreement dated July 25, 1966, and known as TrustNo. 19672 (the Trust), and the Trust's beneficiaries, Joan Schimel, BarbaraGuinand, Garnet Guinand, Joan Guinand, and Richard Guinand (the Beneficiaries)(collectively defendants), concerning the parties' rights under a leaseagreement covering the Trust res commonly known as 2834 North HalstedStreet in Chicago (the Premises). Upon Wolfram's appeal of the entry of summaryjudgment in favor of defendants, we affirm in part, reverse in part, and remandfor further proceedings.

On April 24, 1984, Wolfram, which is engaged in the business of managing andleasing commercial real estate, executed a lease agreement (the Lease) with RuthGuinard, the then sole beneficiary of the Trust, for use of the Premises for afive-year period commencing on May 1, 1984, and ending April 30, 1989. Inrelevant part, the Lease, paragraph 8, allowed Wolfram to sublease the Premisesto a third party, without Ruth's consent, provided Wolfram "(a) [gave theTrust] immediate written notice of such *** subletting; and (b) [furnished theTrust] with an executed copy of such *** sublease at the time such instrument[was] executed."

Paragraph 18 of the Lease required Wolfram to maintain certain insurancecoverage on the Premises which adequately protected the Trust's interest in theproperty. Under that paragraph, Wolfram agreed "that throughout the term of[the] lease it *** [would], at [its own] cost, keep all buildings andimprovements situated on the *** premises insured against fire and extendedcoverage perils to the extent of the full insurable value of said buildings andimprovements, provided Landlord shall remain as an additional insured under allinsurance policies."

In the event Wolfram was in default of "any term, provision, orcovenant" of the Lease, subject to certain exceptions not relevant here,paragraph 21 afforded Wolfram the opportunity to cure its default. Inparticular, Wolfram was required to cure its breach (1) within 30 days ofreceiving written notice thereof or (2) alternatively, if its default could notbe reasonably cured within the 30-day period, to undertake curative effortswithin that time frame and thereafter act with reasonable diligence and in goodfaith to remedy its noncompliance. If Wolfram failed to cure as directed, theTrust held the right to declare Wolfram in default and could pursue a number ofoptions, including termination of the Lease.

A rider agreement (the Rider) accompanying the Lease afforded Wolfram theoption of renewing the lease agreement for an additional five years followingthe expiration of the original period. The Rider further granted Wolfram theoption to purchase the Premises for $200,000 during the original lease term and,if applicable, for $250,000 during the renewal term.

Almost immediately after its execution of the Lease, in June 1984, Wolframsubleased the Premises to 2834 North Halsted Street Corporation, d/b/a Wolf'sHead Motors Limited (Wolf's Head), for a period commencing July 1, 1984, andending April 30, 1989 (the Wolf's Head Sublease). As mandated by the Lease,Wolfram provided timely notice of the Wolf's Head Sublease to Ruth.

Wolf's Head occupied the Premises from July 1984 until early 1987, when thebusiness was sold to Steven Flaxman, who thereafter ran the business as WolframMotors. Wolfram and Wolfram Motors executed an agreement on April 30, 1987 forWolfram Motors' sublease of the Premises for a period commencing June 1, 1987and ending April 30, 1994 (the Wolfram Motors Sublease).

On April 29, 1987, the day prior to the execution of the Wolfram MotorsSublease, Wolfram and Ruth executed a document entitled "Owner'sConsent" in which the parties agreed to extend the original lease term toApril 30, 1994. While the Owner's Consent references the Wolfram MotorsSublease, the record does not reveal whether the sublease instrument accompaniedthe Owner's Consent or whether Ruth was otherwise presented a copy of thatinstrument for her perusal. In a separate instrument executed a short timethereafter, the parties amended the Lease to increase the monthly rent paid byWolfram.

Wolfram Motors occupied the Premises until early 1990, when the business wassold to Perillo BMW, Inc. (Perillo BMW). On June 25, 1990, Wolfram and PerilloBMW entered into an agreement whereby Perillo BMW subleased the Premises for aperiod commencing on July 1, 1990, and ending April 30, 1994 (the 1990 PerilloSublease). There is no indication in the record materials that Ruth everreceived a copy of the 1990 Perillo Sublease or was otherwise notified of thatagreement.

Also in June 1991, and following Wolfram's execution of the Perillo BMWsublease, Wolfram and Ruth again amended the Lease (the 1991 Amendment). In aformal amendment executed June 15, 1991, the parties agreed to extend theoriginal lease term to April 30, 2004. The parties further agreed to an increasein the option price. The price was set at "$225,000 from May 1, 1991through April 30, 1994, *** $250,000 from May 1, 1999 through April 30, 1999,and *** $275,000 from May 1, 1999 through April 30, 2004." To exercise itsoption, Wolfram was required to "deposit with Chicago Title and Trust thesum specified in *** Escrow Instructions," a document which was executed bythe parties contemporaneously with the amendatory instrument. Per the escrowinstructions, Wolfram was to deposit the following:

"$ _____*_______ all or part of which may be proceeds of a loansaid sum to be deposited under the terms of separate money lenders instructionsattached hereto and made a part hereof.

* $225,000.00 on or before April 30, 1994; or

* $250,000.00 if after April 30, 1994 but before May 1, 1999; or

* $275,000.00 if after April 30, 1999 but before May 1, 2004."

Ruth died on March 5, 1993. The record indicates Ruth's daughter, JoanSchimel, who acted as executrix of Ruth's estate, undertook the primaryresponsibility of administering Wolfram's lease of the Premises. By letter datedApril 20, 1993, and written by Joan's son, Fred Schimel, Wolfram was notified ofRuth's death and instructed to remit all future rental payments for the Premisesto Joan.

Notably, at some point shortly after Ruth's death, Fred discussed with legalcounsel the feasibility of breaking the Lease. According to Joan, Fred believedthe rent paid by Wolfram, as well as the option prices, were unfairly low. WhileFred asked counsel to look into the matter, the Beneficiaries never took anysteps to cancel or otherwise defeat the lease agreement. Rather, theBeneficiaries continued to accept Wolfram's monthly rental payments.

The 1990 Perillo Sublease expired on April 30, 1994. The record indicatesthat Perillo BMW continued to occupy the Premises as a month-to-month subtenantthrough March 1995. On March 11, 1995, Wolfram and Perillo BMW entered into asecond sublease for a term commencing on March 31, 1995, and ending March 31,1997 (the 1995 Perillo Sublease). The two-year term set forth in the 1995Perillo Sublease was extended by the parties on March 19, 1997, for anotheryear, until March 31, 1998 (the 1997 Perillo Sublease Extension). The recordmaterials fails to show that Wolfram notified Joan or any other Trustrepresentative of either of the foregoing Perillo sublease documents.

The 1997 Perillo Sublease Extension expired, as provided, on March 31, 1998.From that time until the present, Perillo BMW has apparently occupied thePremises as a month-to-month subtenant.

In early 1999, Wolfram notified the Beneficiaries of its intention topurchase the Premises for $250,000, the option price in effect at the time underthe 1991 Amendment.

Shortly thereafter, on February 3, 1999, Fred wrote Wolfram to advise it thatthe requisite escrow deposit of the full purchase price had not been made.Wolfram responded by depositing $50,000 of the $250,000 purchase price onFebruary 5, 1999. Wolfram further, on or about the same date, reached anagreement with Perillo BMW for the sale of the Premises.

Between March 2 and 8, 1999, Wolfram and Fred exchanged numerouscorrespondences in which the parties addressed the amount of Wolfram's depositand the possibility of allowing that deposit to stand, despite it being lessthan the amount required, with the understanding that the deposit would benonrefundable. In part, Fred informed Wolfram that the $50,000 deposit proposedwas "quite substantial and would likely be acceptable to the Trust and itsbeneficiaries subject to the non-refundable terms of the deposit." WhileFred expressed his concerns that no formal agreement had been reached regardingthe matter, he nonetheless advised Wolfram of his willingness to accept thedeposit in lieu of the full purchase price.

After Wolfram requested Fred to submit the necessary documentation so anamendment to the escrow instructions could be prepared reflecting the Trust'sacceptance of a nonrefundable deposit of $50,000, the parties undertook steps toclose on the Premises. Fred, in particular, contacted Chicago Title on March 17,1999, and requested the preparation and certification of several copies of anupdated ALTA survey of the Premises reflecting the title company as ChicagoTitle, the seller as LaSalle, as trustee of the Trust, and the purchaser asWolfram. The record further indicates that Wolfram scheduled a closing to takeplace on May 26, 1999.

By letter dated April 1, 1999, Joan notified Wolfram that it was in"default under Sections 8 and 18 of the Lease." While asserting adefault, Joan's letter does not provide any insight as to the specific nature ofWolfram's asserted noncompliance. Joan expressly advised Wolfram that its"failure to timely cure such default shall result in [the Trust] exercisingits rights under Section 21 of the Lease."

Deirdre responded by sending Fred a fax on April 20, 1999. The fax referencesdiscussions Deirdre had with Fred on April 19, 1999, and was accompanied by acertificate of insurance issued to Deirdre on April 16, 1999, by the insuranceagency of DeCarl, Levine & Friedman, Ltd. (the DeCarl Agency). Thiscertificate lists "Joseph Perillo," the sole owner of Perillo BMW, asthe named insured under a policy of insurance, effective from December 30, 1998,to December 30, 1999, that provided coverage for, inter alia, abuilding on the Premises. Deirdre further advised Fred that "the other itemyou mentioned will be forthcoming shortly."

Two days after Deirdre's fax, on April 22, 1999, Wolfram deposited theremaining $200,000 of the option price into escrow.

At some point after her initial fax, Deirdre sent Fred copies of the 1995Perillo Sublease and the 1997 Perillo Sublease Extension. There is no indicationthat the 1990 Perillo Sublease either accompanied Deirdre's correspondence orwas thereafter sent to Fred or any other Trust representative.

The May 26 closing did not go forth as scheduled. Shortly thereafter, on June3, 1999, the Beneficiaries notified Wolfram they were not going forward with thesale of the Premises because Wolfram had assertedly failed to timely cure itsdefaults. The Beneficiaries advised Wolfram they were terminating the leaseagreement and demanded Wolfram, as well as Perillo BMW, surrender immediatepossession of the Premises.

Wolfram responded by commencing the instant action for declaratory,injunctive and other relief.⁽¹⁾ Count I ofWolfram's amended complaint essentially seeks a declaration that Wolfram hasmaterially complied with its lease obligations, particularly those imposed underparagraphs 8 and 18, that it has properly and effectively exercised its optionto purchase the Premises, that defendants' termination of the Lease wasunjustified and that defendants are in breach of the parties' agreements byfailing to recognize Wolfram's right to purchase. In count II, Wolfram seeksspecific performance of its option, while count III requests monetary damagesfor defendants' alleged failure to act fairly and in good faith in administeringthe Lease provisions.

Defendants timely answered the amended complaint and filed a 10-countcountercomplaint against Wolfram, asserting, in relevant part, claims for breachof paragraphs 8 and 18 of the lease agreement (counts VIII and IX) and an actionfor forcible entry and detainer (count IV).

Wolfram thereafter moved for summary judgment on all counts of its amendedcomplaint as well as on all claims asserted by defendants in theircountercomplaint. Defendants countered by seeking partial summary judgment oncount I of the amended complaint and counts IV, VIII and IX of theircountercomplaint. Following a hearing, the circuit court denied Wolfram's motionin its entirety and granted defendants' request for partial summary judgment.The instant appeal followed.

The purpose of summary judgment is to determine whether any genuine issues ofmaterial fact exist between the parties. Hubble v. O'Connor, 291 Ill.App. 3d 974, 979, 684 N.E.2d 816, 820 (1997). Summary judgment is proper onlywhere the pleadings, depositions, and admissions on file, together with anyaffidavits, present no genuine issue of material fact and show that the movingparty is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West1998). A triable issue of fact precluding summary judgment exists "wherethere is a dispute as to material facts, or where, the material facts beingundisputed, reasonable persons might draw different inferences from thefacts." Northern Trust Co. v. St. Francis Hospital, 168 Ill. App. 3d270, 276, 522 N.E.2d 699, 703 (1988).

By filing cross-motions for summary judgment, the parties invite the court todetermine the issues as a matter of law and posit that judgment in favor of oneof the parties is proper. Hubble, 291 Ill. App. 3d at 979, 684 N.E.2d at820; Maywood Proviso State Bank v. York State Bank & Trust Co., 252Ill. App. 3d 164, 171, 625 N.E.2d 83, 89 (1993). Yet, the mere filing ofcross-motions does not preclude a determination that triable questions of factexist. Andrews v. Cramer, 256 Ill. App. 3d 766, 769, 629 N.E.2d 133, 135(1993).

Our review of an order granting summary judgment is conducted de novo(John Deere Insurance Co. v. Allstate Insurance Co., 298 Ill. App. 3d371, 376, 698 N.E.2d 635, 639 (1998)), and the record materials, including allpleadings, depositions and affidavits will be construed in a light mostfavorable to the nonmoving party. Soderlund Brothers, Inc. v. Carrier Corp.,278 Ill. App. 3d 606, 614, 663 N.E.2d 1, 7 (1995).

In moving for partial summary judgment, defendants claim the undisputedevidence shows Wolfram was in breach of paragraphs 8 and 18 of the Lease at thetime default was declared in April 1999. According to defendants, the evidenceclearly establishes Wolfram, in violation of paragraph 8, never gave the Trustimmediate written notice or executed copies of any of the Perillo subleasedocuments. With respect to Wolfram's asserted default of paragraph 18,defendants claim Wolfram has failed to maintain the proper insurance on thePremises since 1995 when it allowed Perillo BMW to obtain the necessaryinsurance coverage. In light of Wolfram's noncompliance, defendants contend theyhad the right to declare a default and demand Wolfram to undertake efforts tocure its noncompliance. Because, according to defendants, Wolfram failed to cureas required, and since Wolfram's breaches were material to the parties'agreement, the Lease was properly terminated and, accordingly, Wolfram's optionto purchase the Premises is noneffective.

Wolfram refutes defendants' claims of default and, conversely, maintains theundisputed evidence shows that proper and timely notification of all Perillosublease documents was given and that the Premises was, at all relevant times,adequately protected by insurance. Assuming, arguendo, its breach of theLease, Wolfram asserts (1) it sufficiently cured its defaults, (2) any breachwas not material and, thus, did not warrant the Lease's termination, and/or (3)equity precludes defendants from declaring a default and, thereby, terminatingthe parties' agreement in order to avoid Wolfram's option to purchase.⁽²⁾

Before addressing the respective arguments raised by the parties, weinitially comment on Wolfram's exercise of its option and the effect that actionmay have on the parties' litigation.

An option to purchase contained in a lease has been described as a contractby which the lessor-owner grants the lessee the right to purchase the premisesat a fixed price within a certain time frame. Keogh v. Peck, 316 Ill.318, 328, 147 N.E. 266, 269 (1925); Bruss v. Klein, 210 Ill. App. 3d 72,79, 568 N.E.2d 904, 908 (1991). The option, when accepted and exercisedaccording to its terms, becomes a present contract for the sale of the propertyand the lease agreement extinguishes, thereby transforming the parties'relationship from lessor-lessee to vendor-vendee. Cities Service Oil Co. v.Viering, 404 Ill. 538, 554, 89 N.E.2d 392, 402 (1949); Industrial SteelConstruction, Inc. v. Mooncotch, 264 Ill. App. 3d 507, 511-12, 637 N.E.2d663, 666 (1994); Hanson v. Duffy, 106 Ill. App. 3d 727, 730-31, 435N.E.2d 1373, 1377 (1982). The property under contract is regarded, in equity, asthat of the vendee, and the rights of the parties are thereafter governed by theterms of sale. Cities Service Oil, 404 Ill. at 555, 89 N.E.2d at 402; Mooncotch,264 Ill. App. 3d at 512, 637 N.E.2d at 666.

The lessee must exercise the option in strict conformity with all conditionsprescribed and not waived by the lessor. Lake Shore Country Club v. Brand,339 Ill. 504, 522, 171 N.E. 494, 501 (1930); Bruss, 210 Ill. App. 3d at79, 568 N.E.2d at 908. The failure of the lessee to exercise the option asprescribed is ineffective to create a binding sale contract (49 Am. Jur. 2d Landlord& Tenant