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Chi. T. & T. Co. v. W.t. Grant Co.

OCTOBER 27, 1971.




APPEAL from the Circuit Court of Du Page County; the Hon. BRUCE FAWELL, Judge, presiding.


Rehearing denied December 17, 1971.

The defendant tenant, W.T. Grant Company, rented retail store space located in a shopping plaza from plaintiff landlord, Chicago Title and Trust Company, at a monthly rental of $5,833.33. The relevant provisions of the written lease between the parties are these:

"The Landlord shall promptly make all repairs and replacements * * * which may be necessary to maintain the demised premises in a safe, dry and tenantable condition * * *.

The Landlord agrees to indemnify and hold the Tenant harmless from and against all loss, damage or injury to the Tenant's store and to the Tenant's merchandise, fixtures and other property therein, due to or occasioned by any overflow or leakage or defect of exterior walls or the roof * * * or by any failure on the part of the Landlord to make any of the repairs herein agreed to be made by the Landlord, and also from and against all reasonable expense incurred by the Tenant in connection therewith.

Any sums due the Tenant from the Landlord under the provisions of this lease or arising out of Landlord's failure to comply with or perform any of its terms may be deducted from the rent * * *."

On February 15, March 8, and March 16, 1965, the tenant allegedly sustained damage to merchandise contained in the store due to roof leaks. Exhibits in the record include a telegram on March 9, 1965, to landlord's agent reporting serious roof leakage at the Glen Ellyn store, and a letter to Chicago Title and Trust Co. dated May 3, 1965, stating the store manager was being instructed, by carbon copy, to hold fully damaged merchandise for inspection and to sell partially damaged merchandise at marked down prices in order to obtain maximum salvage. After unsuccessful negotiations relating to the merchandise, the tenant withheld rent for July, 1969, the landlord brought suit to collect the amount owing for the month, $5,833.33, and the tenant counter-claimed for property damaged by roof leakage in the amount of $8,844.96.

The trial court entered judgment for the W.T. Grant Company in the sum of $8,844.96 and found the issues against the plaintiff on their suit for the months rent in question. There is an obvious error in this regard as the W.T. Grant Company had withheld rent in the sum of $5,833.33 which would in effect give the W.T. Grant Company a finding of $14,678.29 which counsel for the W.T. Grant Company concedes is incorrect.

At trial without a jury, the landlord's agent testified he had been upon the roof about 25 to 50 times during the period of the leakage problem, and attributed most of the water coming into the store to open hatchway doors upon the roof which serviced tenant's equipment and to the installation by both parties of tenant's roof sign above the checkout area where no merchandise was displayed. On one occasion the witness had seen a display table covered with plastic with water dripping about the edge into pans on the floor. He said the roof had leaks in it but very little of the water was entering the store through them.

In this appeal brought by the landlord, a secondary issue raised in oral argument is that judgment for the tenant based on damage to merchandise is against the manifest weight of the evidence as a number of tenants' employees testified to seeing water dripping through the ceiling tiles onto merchandise displayed below every time there was rain or melting snow, but only the landlord's agent, a civil engineer, undertook to state the origin of this water, and he also testified to showing the store manager open hatchway doors upon the roof several times during the problem period which he said the manager claimed were being blown open by the wind.

• 1 We agree with landlord's counsel that the direct evidence or water originally entering through roof leaks is minimal and that other explanations have been offered for the repeated circumstances of water dripping through the ceiling below. In entering judgment for the tenant, however, the trial court must necessarily have concluded that leakage or defects in the roof were the source of the damage. There is sufficient evidence in the record to sustain the trial court's finding of fact, and while the evidence is conflicting, an opposite conclusion is not so clearly apparent that the decision below can be disturbed. Lipschultz v. So-Jess Management Corp. (1967), 89 Ill. App.2d 192, 203; 232 N.E.2d 485.

The basic issue in this case is whether the plaintiff is entitled to recover the retail selling price or the wholesale price of the damaged merchandise. The amount of judgment for the tenant, $8,844.96, is based on the total anticipated retail sale price of all damaged items, such as dresses, coats, drapes, shirts, cosmetics, and Easter eggs, less the total amount realized by W.T. Grant Company from the markdown sale of partially damaged merchandise. Landlord's counsel vigorously contends this basis is erroneous, claiming damages are measureable by the cost price of the merchandise to W.T. Grant Company plus all attendant reasonable expenses as shipping and handling, less the markdown sale proceeds.

Calculation of the money judgment is based on entries on a markdown form regularly used in the course of Grant's business with no indication of the cost price. Tenant's district manager testified that the merchandise was purchased directly from various sources by the Glen Ellyn store, that the local store maintains a filled order record which indicates the retail sale price but not the cost price, and that upon local receipt of merchandise invoices for it are approved and sent to the New York office for payment with a discount usually taken for prompt payment. The local filled order record or invoices covering the damaged merchandise in question had been destroyed about two years before the trial, which commenced July 21, 1970, and the witness had no idea what the New York office did with invoices after paying them nor did he know which of a variety of suppliers might have sold the particular damaged merchandise to the Glen Ellyn store. There was no evidence on the customary percentage or markup over cost to obtain sale price.

In either event obviously the amount received from the marked down sale of the damaged merchandise must be deducted. The plaintiff contends of course that it is entitled to the retail price it would have received from the sale of every item in question. No consideration is given to damage to the merchandise that might be caused by customers of the store, shoplifting, obsolescence, ...

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