Powers v. Rockford Stop-N-Go, Inc

Case Date: 11/28/2001
Court: 2nd District Appellate
Docket No: 2-00-1127 Rel

No. 2--00--1127
November 28, 2001

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IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

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ROGER J. POWERS,

               Plaintiff-Appellee,

v.

ROCKFORD STOP-N-GO, INC.,

               Defendant-Appellant.

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Appeal from the Circuit
Court of Boone County.

No. 98--L--41


Honorable
Gerald F. Grubb,
Judge, Presiding.


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PRESIDING JUSTICE HUTCHINSON delivered the opinion of thecourt:

Following a bench trial, the trial court entered judgment for$875 in favor of plaintiff-lessor, Roger Powers, and againstdefendant-lessee, Rockford Stop-N-Go, Inc. The trial court alsoheld that the lease agreement between the parties allowed for anaward of attorney fees and awarded plaintiff $37,918 for attorneyfees. Defendant timely appeals, contending (1) that the trialcourt erred, as a matter of law, when it construed the lease toallow an award of attorney fees and (2) the trial court abused itsdiscretion because it failed to determine whether the fee award wasreasonable. We affirm in part and reverse in part.

This matter arose out of various disputes regardingdefendant's use of property leased from plaintiff as a gas stationand convenience store. However, because neither party has appealedthe trial court's judgment on the merits of the underlying action,it is unnecessary to set out the trial testimony regarding thedisputed issues here. The lease was signed by the parties onJanuary 22, 1988. The terms of the lease provided for an initialterm of 10 years beginning on April 1, 1988, and granted defendantthe option to extend the lease for two successive 5-year periods.

In October 1998 plaintiff filed his original complaint, and onJanuary 27, 1999, he filed an amended complaint. Count I of theamended complaint alleged that defendant breached the lease byallowing leaks or discharges of petroleum products and that theenvironmental contamination decreased the value of the property. Plaintiff prayed for damages in excess of $50,000. Count IIalleged that the operation of a gas station was an ultrahazardous activity and that defendant was strictly liable for the samedamages alleged in count I. Count III alleged that defendant hadimproperly expanded its use of plaintiff's property beyond the areasubject to the lease by selling propane, ice, and other goodsoutside the store building and by refusing to relocate an airconditioning unit. Count IV reiterated the allegations of countIII and alleged that defendant's actions constituted a trespass toplaintiff's real property. Count V alleged that defendant hadbreached the lease by installing overflow tanks above itsunderground storage tanks that raises them above grade and resultedin damage to plaintiff's parking area. Count VI alleged thatplaintiff had incurred legal fees totaling $6,456 as a result ofthe environmental contamination and that defendant was required toreimburse those costs. Count VI also alleged that defendant hadinstalled, and later removed, pay telephones on the exterior of thebuilding, causing damages of $4,334. Count VII alleged thatdefendant was in default of the lease and prayed for an orderevicting defendant.

Defendant filed several counterclaims alleging that plaintiff(1) interfered with defendant's quiet enjoyment of the leasehold byharassing defendant's customers and vendors, (2) failed to maintainthe parking areas as required by the lease, and (3) unreasonablyrefused to allow defendant to improve the convenience store. Defendant sought an injunction against future harassment, specificperformance of the lease, as well as a declaration that outdoordisplays were a customary use allowed by the lease.

At trial plaintiff argued that he was entitled to (1) an orderterminating the lease, (2) an order requiring defendant to completeremediation by December 31, 2000, (3) an award of attorney fees,(4) an order requiring defendant to repair the damage caused by the installation of the pay telephones, (5) an order requiringdefendant to remove the outdoor displays, and (6) an orderrequiring defendant to relocate an air conditioning unit. Defendant argued that it was entitled to (1) an order enjoiningplaintiff from interfering with its quiet enjoyment, and (2) anaward of attorney fees.

On May 1, 2000, the trial court issued a memorandum decision. The trial court held that minor spillage of petroleum products wasexpected during the operation of a gas station and that the partiesanticipated such spillage would occur. The trial court furtherheld that under the lease defendant warranted that it would notallow contamination resulting from spillage. The trial court heldthat breach of that warranty did not automatically give plaintiffthe right to terminate the lease because defendant had a right tocure the breach. The trial court further held that because of thenature of environmental contamination the lease's 20-day curerequirement did not apply but, instead, defendant was required touse due diligence to remediate any contamination. The trial courtconcluded:

"I find that, to date, [d]efendants [sic] have used duediligence in remediating the site and should be allowed tocontinue to completion. There is no reason why it cannotremediate the site by December 30, 2000. I will enter anorder that they complete the Corrective Action Plan at its ownexpense by that date, as a remedy for breach of contract. Ido not find the breach a material breach of the contract thatwould justify [p]laintiff to terminate the tenancy at thistime. Failure to use due diligence in curing the breach wouldbe cause to terminate its tenancy.

Pursuant to the [l]ease, attorney fees shall be paid by[d]efendant for the enforcement of the lease. I will awardthe same."

The trial court held that the failure to remove equipmentoutside the demised premises would constitute a willful trespass. The court held that there was no complaint for trespass, refused toenter an order directing defendant to remove equipment, and insteaddeclared the rights of the parties regarding the issue. The trialcourt held that the sale of merchandise from outdoor displays wasa customary use at convenience stores and that defendant had notbreached the lease by doing so.

The trial court also held that pay telephones were a customaryuse. However, the trial court found that defendant had breachedthe lease by failing to obtain written permission before attachingpay telephones to the building. The trial court found that theamount sought by plaintiff, the cost of residing the building, wasunreasonable and awarded plaintiff $875 for damages to the siding. The trial court denied defendant's counterclaims regarding peacefulenjoyment, maintenance of the parking areas, and unreasonablyrefusing to allow improvements to the store.

Defendant subsequently filed a motion to reconsider the trialcourt's award of attorney fees. The trial court denied defendant'smotion and entered judgment for fees in the amount of $37,918. Defendant timely appeals.

The general rule is that the unsuccessful party in a lawsuitis not responsible for the other party's attorney fees. MirarDevelopment, Inc. v. Kroner, 308 Ill. App. 3d 483, 488 (1999). Theparties to a contract may alter this rule, but contract provisionsregarding attorney fees should be strictly construed and enforcedat the discretion of the trial court. Mirar, 308 Ill. App. 3d at488. To determine a reasonable fee award, a court must consider(1) the skill and standing of the attorney employed, (2) the natureof the cause, (3) the novelty and difficulty of the questions, (4)the amount and importance of the subject matter, (5) the degree ofresponsibility in the management of the case, (6) the time andlabor required, (7) the usual and customary charges in thecommunity, and (8) the benefits resulting to the client. Collinsv. Hurst, 316 Ill. App. 3d 171, 173 (2000). A trial court's awardof attorney fees will not be disturbed on appeal unless it amountsto an abuse of discretion. Collins, 316 Ill. App. 3d at 173.

A successful litigant is still considered the prevailing partyunder a fee-shifting provision even if the judgment amount is belowthe amount claimed. J.B. Esker & Sons, Inc. v. Cle-Pa'sPartnership, No. 5--99--0811, slip op. at 7 (October 10, 2001);Pennsylvania Truck Lines, Inc. v. Solar Equity Corp., 882 F.2d 221,228 (7th Cir. 1989) (interpreting Illinois law). The fact that alitigant is not successful on all claims does not alter the rightto attorney fees, and the prevailing party is entitled to allreasonable attorney fees. J.B. Esker, slip op. at 6-7. However,when the dispute involves multiple claims and both parties have wonand lost on different claims, it may be inappropriate to find thateither party is the prevailing party and an award of attorney feesto either is inappropriate. Brown & Kerr, Inc. v. American StoresProperties, Inc., 306 Ill. App. 3d 1023, 1035 (1999); Raffel v.Medallion Kitchens of Minnesota, Inc., 139 F.3d 1142, 1147 (7thCir. 1998) (interpreting Illinois law).

For example, in Raffel, a lessor obtained a judgment forapproximately $13,000 for one month's rent and late fees, but thelessee successfully defended against a claim for additional latefees of approximately $80,000 when the trial court ruled that thelarger amount constituted an unenforceable penalty. The reviewingcourt affirmed the trial court's finding that the lessor was notentitled to attorney fees because it had failed on the "mostsignificant claim" and the case was "essentially a draw." Raffel,139 F.3d at 1147.

In the case before us, the lease agreement provided:

"Each party agrees to pay and discharge all reasonablecosts, attorneys' fees and expenses which may be incurred ormade by the other in enforcing the covenants and agreements ofthis lease."

Similar language has been construed to allow recovery for theprevailing party in an action to enforce a lease. See PennsylvaniaTruck, 882 F.2d at 227, citing Pioneer Trust & Savings Bank v.Zonta, 96 Ill. App. 3d 339, 349 (1981). However, Illinois courtshave not interpreted this language to allow an award of attorneyfees in a declaratory judgment action because such actions declarebut do not enforce a party's rights under a lease. PennsylvaniaTruck, 882 F.2d at 228, citing Arrington v. Walter E. HellerInternational Corp., 30 Ill. App. 3d 631, 642 (1975).

Defendant contends that the trial court erred when it held asa matter of law that the lease allowed an award of attorney feesand that this is an issue subject to de novo review. When thefacts are not in dispute, the circuit court's application of thelaw is a matter that we may review de novo. See Mirar, 308 Ill.App. 3d at 485. However, we find no error in the trial court'slegal conclusion that the lease provision at issue allowed for anaward of attorney fees. Illinois courts have repeatedly construedsimilar language as a valid fee-shifting provision. See Zonta, 96Ill. App. 3d at 349; Wanderer v. Plainfield Carton Corp., 40 Ill.App. 3d 552, 560 (1976). However, consistent with the strictconstruction given such provisions (see Mirar, 308 Ill. App. 3d at488), we feel that it is important to explicitly identify alimitation implicit in these earlier cases--that attorney fees mayonly be awarded to a prevailing party. The word "enforce" means"to compel obedience to." Black's Law Dictionary 528 (6th ed.1990). Accordingly, we hold that a party is entitled to an awardof attorney fees under this provision only when she or he candemonstrate that the other party was compelled by the trial courtto obey a condition of the lease.

The ultimate question before us, however, is not a mattersubject to de novo review. Whether either party prevailed orcompelled the other to obey the lease in the trial court belowinvolves an application of the facts to this principle of law. Therefore, it remains a matter committed to the discretion of thetrial court (see Mirar, 308 Ill. App. 3d at 485), and the questionbefore us is whether the trial court abused its discretion when itdetermined that plaintiff was the prevailing party. We answer thisquestion by examining the various claims and the trial court'srulings.

The trial court awarded plaintiff monetary damages on only asingle claim, the damage to the building resulting from theinstallation of pay telephones. The amount awarded ($875) was lessthan the amount claimed ($4,334), but this discrepancy does notalter the fact that plaintiff successfully prosecuted this claim. See J.B. Esker, slip op. at 6-7.

Although plaintiff's complaint alleged defendant causeddamages to the landscaping and parking area, plaintiff apparentlyabandoned these issues at trial. Plaintiff did not address theseissues in his closing argument. The trial court did not rule onthese issues, and plaintiff did not demand a ruling on theseissues. Therefore, because the trial court did not compelcompliance with these provisions of the lease, we cannot find thateither plaintiff or defendant prevailed on the landscaping orparking area issues.

Plaintiff raised several claims with regard to the sale ofmerchandise outside defendant's store and argued that such salesviolated the lease. The trial court ruled for defendant on theseissues, finding that such sales did not violate the provisions ofthe lease.

The trial court declared that plaintiff had a right to revokehis permission and demand the removal of an air conditioning unitlocated on his property outside the leased premises. However,plaintiff's success on this issue is irrelevant to the question ofattorney fees because the trial court held that this was a matterindependent of the lease. Therefore, the contractual provision forattorney fees included in the lease does not apply. Moreover, thefee-shifting provision of the lease would not apply to this issuebecause plaintiff obtained only a declaration of rights. SeePennsylvania Truck, 882 F.2d at 228.

The most significant issue at trial involved environmentalcontamination. The trial court ordered defendant to complete theremediation of this contamination by a date certain. However, wedetermine that despite this order plaintiff did not prevail on thisissue. Plaintiff sought to terminate the lease based on thecontamination. The trial court ruled in favor of defendant andheld that the contamination was not a material breach thatjustified the termination of the lease. The trial court held thatthe lease required defendant to use due diligence to remediate thecontamination, but it also found that defendant had used duediligence. The trial court set a date certain for completion, butthis ruling did not constitute a judgment in favor of plaintiff; itwas instead a declaratory judgment. The trial court's ruling wasprospective: it held that defendant was required to use duediligence to complete the remediation and that, by using duediligence, defendant could complete the remediation by a datecertain. Therefore, we determine that the trial court's rulings onthe contamination issues were essentially a draw--defendant wasrequired to do nothing it had not already agreed to do, andplaintiff received only the assurance that defendant would continuethe remediation efforts already begun.

We conclude that the trial court abused its discretion when itheld that plaintiff was entitled to attorney fees. Althoughplaintiff successfully obtained a judgment for damages resultingfrom the installation of pay telephones, this issue was notsignificant relative to either the value of the remaining claims,their complexity, or the time devoted to the other issues at trial. When value, complexity, and time are considered, the mostsignificant issue was the environmental contamination. However,the trial court's ruling on this issue did little more thanmaintain the status quo. Defendant prevailed on the remainingissues. Therefore, we determine that the trial court abused itsdiscretion when it determined that plaintiff was a prevailing partyfor the purposes of a fee-shifting agreement. See Brown & Kerr,306 Ill. App. 3d at 1035. Because plaintiff did not prevail on asignificant issue, he was not entitled to any attorney fees. Accordingly, we reverse the portion of the judgment that awardedplaintiff attorney fees; we affirm all other aspects of thejudgment.

For the foregoing reasons, the judgment of the circuit courtof Boone County is affirmed in part and reversed in part.

Affirmed in part and reversed in part.

McLAREN and BOWMAN, JJ., concur.