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Bolchazy v. Chicago Investment Group

OPINION FILED SEPTEMBER 21, 1982.

LADISLAUS J. BOLCHAZY ET AL., D/B/A/ U.S. GRAPHICS, PLAINTIFFS-APPELLANTS,

v.

CHICAGO INVESTMENT GROUP ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. Harold A. Siegan, Judge, presiding.

JUSTICE HARTMAN DELIVERED THE OPINION OF THE COURT:

Rehearing denied October 19, 1982.

Plaintiffs Ladislaus & Marie Bolchazy d/b/a/ U.S. Graphics appeal from an order of the trial court denying their motion for a preliminary *fn1 injunction in No. 82-570 and from the order dismissing their cause of action for permanent injunctive relief in count I of their to count complaint in No. 82-618. The action arose out of an alleged breach of a lease purportedly granting them the exclusive right to commercial printing in the office building containing the leased premises. The principal issues raised by plaintiffs on appeal are whether the trial court abused its discretion in denying their motion for a temporary injunction and whether the court erred in dismissing their suit for injunctive relief.

For the reasons which follow, we affirm.

In November 1978, the Bolchazys purchased Unigraphics, Inc. (Unigraphics), a commercial print shop located in a building known as the Willoughby Towers on South Michigan Avenue from Soterios Gardiakos. The previous term leases held by Gardiakos who then owned Unigraphics *fn2 was for space on the third floor of the building. The leases provided them with the "exclusive rights of print shop" in the building. According to Gardiakos the building manager eventually refused to give Unigraphics a long term lease because most of the third floor was empty and the management was looking for one or two tenants to occupy the entire floor. In the fall of 1977, Unigraphics through Gardiakos entered into an oral month-to-month lease without the exclusive rights understanding. Gardiakos was told that once the entire floor was leased, Unigraphics could move to another room at which time they would be granted an exclusive rights clause.

Both Ladislaus Bolchazy and Gardiakos stated that when they first started negotiating the sale of Unigraphics in August of 1978, Bolchazy strongly desired an assurance from Timothy Malloy, the property manager for the building, that he could obtain an exclusive rights clause in his lease. Bolchazy and Gardiakos further testified that Malloy told them that it would be no problem to accommodate the Bolchazys' desire for an exclusive rights clause once the entire third floor was leased and they were moved into another room. Bolchazy stated that he relied on this assurance when he bought the business from Gardiakos and moved into suite 301 as a month-to-month tenant without an exclusive rights clause.

A five-year lease dated March 23, 1979, for suite 503 was entered into between the subsequent lessor of Willoughby Towers, Teachers Insurance & Annuity Association of America (Teachers Insurance) and the Bolchazys. Bolchazy stated that when he received the form lease, he asked Malloy about the exclusive rights clause in Malloy's office and with Malloy's secretary apparently present. Malloy allegedly said that would be no problem, and dictated the words to the clause which Bolchazy wrote in. Both paragraphs 4 and 5 of the ninth page of the document were written by hand. The central issues in the case focus upon paragraph 5, which specified that plaintiffs "shall enjoy exclusive right to commercial printing in the building." This clause was in every executed copy of the lease introduced into evidence, including that which was filed in the executive office of the lessor's managing agent. Bolchazy took the lease home, where he and his wife signed it.

Malloy's testimony contradicted that given by plaintiffs' witnesses. He did not agree to the exclusive rights clause. He would not have submitted to the lessor a handwritten document like the one in question since everything was always typed. He did not dictate paragraph 5 to Bolchazy. He would not have used the language of paragraph 5 if he were to have dictated such a clause. He did not have the authority to grant a clause of this nature. During the time he had been in the realty business, he never negotiated any exclusive right clauses. His employer's policy was not to negotiate such clauses. If such a clause were to have been added, it would have been placed on page 8, the rider to the lease, rather than page 9 of the lease, which was the work order Exhibit B. If such a clause would have been agreed to, it would have been mentioned as a special matter in his letter of transmittal of the lease to his employer. The transmittal letter, received in evidence, contained no such mention.

The plaintiffs both testified that they signed their lease for suite 503 after Ladislaus Bolchazy added the exclusive rights clause with the alleged consent of Malloy. On May 29, 1979, Malloy sent plaintiffs' lease to New York for execution by Teachers Insurance, and on September 25, 1979, he sent plaintiffs a fully executed copy of their lease.

In December 1980, Teachers Insurance sold its title and interest in the building to the Chicago Investment Group (Investment Group) to which it assigned plaintiffs' lease. The new managing agent for the building, Chicago Investment Corporation (Investment Corporation) entered into a lease on March 4 or 5, 1981, with A-Z Letter Service, Inc. (A-Z), which apparently was in the business of commercial printing.

Plaintiffs filed a two-count complaint against the Investment Group, Alfred Simpson, Investment Corporation and A-Z seeking, inter alia, in count I to restrain and enjoin defendants from leasing any portion of Willoughby Towers to any person, including A-Z, other than themselves for the purpose of engaging in commercial printing while plaintiffs' lease remained in effect. Count II of the complaint was an action at law seeking an award of compensatory and punitive damages. In a written order following a bench trial, the circuit court denied plaintiffs' motion for a preliminary injunction, dismissed count I "without prejudice" to plaintiffs' action at law for damages in count II and transferred the case for reassignment to the law division.

Plaintiffs maintain that: their lease provides them with the exclusive right to commercial printing in Willoughby Towers; their right to exclusive printing may be enforced by injunction; their right to enjoin a breach of this clause does not depend on whether or not they will be damaged by the breach; their right to exclusive printing may be enforced against a subsequent lessee, such as A-Z, which had knowledge of the restrictive clause prior to occupying the premises; they have no adequate remedy at law; and they were not guilty of laches.

The threshold and decisive issue in this controversy is whether the handwritten clause specifying that plaintiffs "shall enjoy exclusive right to commercial printing" in Willoughby Towers was so clearly intended by the parties to be part of the lease agreement as to support the injunctive relief sought. The circuit court made no express finding of fact on this issue; however, implicit in its written finding that plaintiffs failed to establish their entitlement to injunctive relief based on the presence of the exclusive right clause is the court's determination that such an intention was not sufficiently established.

• 1 Plaintiffs argue that if the court had found that the exclusive rights clause was not present in the lease, then it would not have transferred the case to the law division for a trial on count II for the breach of a nonexistent provision. The mere transfer, however, of the controversy to the law division without prejudice does not mean that the court found the clause to be part of the agreement ...


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