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Hartwig Transit, Inc. v. Menolascino

OPINION FILED FEBRUARY 18, 1983.

HARTWIG TRANSIT, INC., PLAINTIFF-APPELLEE,

v.

ANTHONY MENOLASCINO, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. Angelo D. Mistretta, Judge, presiding.

JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order granting possession of leased premises to the lessor (plaintiff) in an action brought pursuant to the Forcible Entry and Detainer Act. (Ill. Rev. Stat. 1979, ch. 57, par. 1 et seq.) The lessee (defendant) contends that the trial court erred in finding that he breached the terms of the lease by refusing to execute a subordination agreement presented for his signature.

Plaintiff leased commercial property (the ground lease) from Harris Trust and Savings Bank, as trustee under a land trust (Harris) and then negotiated a sublease with defendant after informing him of the ground lease from Harris. Paragraph 15 of the sublease provides in relevant part:

"15. Subordination to Ground Lease and Mortgage.

This lease shall be subject and subordinate at all times to any ground or underlying lease, to the lien of any mortgage which may now or hereafter affect the leased property, and to all renewals, modifications, amendments, consolidations, replacements, and extensions thereof. The Lessee will execute and deliver any instrument which may be reasonably required by the Lessor in confirmation of such subordination promptly upon the Lessor's request. The Lessor, however, will exercise its best efforts to arrange with the holder of any such underlying lease or mortgage for an agreement that if, by dispossess [sic], foreclosure, or otherwise such holder, or any successor in interest, shall come into possession of the leased property, or shall become the owner of the leased property, or take over the rights of the Lessor in the leased property, it will not disturb the possession, use, or enjoyment of the leased property by the Lessee, its successors or assigns, nor disaffirm this lease or the Lessee's rights or estate hereunder, so long as all of the obligations of the Lessee are fully performed in accordance with the terms of this lease. Lessor covenants that should it acquire title to the demised premises, any subsequent conveyance shall be subject to this lease."

The sublease further provides that if a default occurs, including "[l]essee's default in performing any of the * * * covenants and agreements," the lessor may elect to terminate the lease.

Several months after the parties entered into the sublease, plaintiff, in accordance with paragraph 15 thereof, requested defendant to sign a lease amendment described by it as a confirmation of subordination, which was a substitution for paragraph 15 of the sublease. The lease amendment, in relevant part, was as follows:

"15. This Lease shall be subject and subordinate at all times to the terms of the Harris-Hartwig Lease, including any amendment thereto heretofore or hereafter made. In the event that Lessor is in default under the Harris-Hartwig Lease, then this lease shall be deemed in default and if the Harris-Hartwig Lease is terminated by default or otherwise, including agreement by the parties thereto, except for purchase by Hartwig of the premises, then this lease shall likewise be terminated and Lessee, upon ten days written notice from Harris Trust and Savings Bank, as Trustee, Lessor of the Harris-Hartwig lease, of such termination shall immediately vacate such premises. If Lessee fails to vacate said premises upon termination as above, Lessee shall be liable for all costs, including but not limited to, attorneys fees, damages, etc. as set forth in paragraphs 17 and 28(a) of this Lease."

When defendant refused to sign the amendment, after receiving notice that his lease would be terminated if he did not do so, plaintiff instituted the present action seeking to repossess the property.

At trial, plaintiff's treasurer, Hartwig, testified that he discussed a proposed lease amendment with defendant, who agreed to sign whatever was needed. After its preparation by Harris, the amendment was approved and signed by plaintiff and presented to defendant for his signature. Despite repeated requests, defendant did not sign it and gave no reason for refusing to do so. Hartwig admitted that the lease amendment omits the portion of paragraph 15 in the sublease requiring plaintiff to use its best efforts to secure a nondisturbance agreement on defendant's behalf if its ground lease terminated.

Defendant testified in effect that he did not sign the lease amendment because it did not merely subordinate the sublease to the ground lease but totally contradicted paragraph 15 in the sublease. He acknowledged that, during negotiations of the sublease, he was represented by an attorney and understood its terms.

The trial court granted possession of the premises to plaintiff, and this appeal followed.

OPINION

Defendant first contends that sublease paragraph 15 required him to confirm subordination of the lease only if the ground lease is terminated or the property is sold at foreclosure, neither of which occurred. In support of this argument, he cites an explanation of a similar subordination clause contained in a legal form book which interprets such clauses as an agreement by the lessee ...


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