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De Witt County Bldg. Com. v. Cty of De Witt

OPINION FILED SEPTEMBER 25, 1984.

DE WITT COUNTY PUBLIC BUILDING COMMISSION, PLAINTIFF-APPELLEE,

v.

THE COUNTY OF DE WITT, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of De Witt County; the Hon. Art Powers, Jr., Judge, presiding.

PRESIDING JUSTICE MILLS DELIVERED THE OPINION OF THE COURT:

Rehearing denied November 2, 1984.

Public Building Commission (PBC) lease.

The De Witt County board (board) says it's invalid because it obligates the PBC to do nothing.

We disagree — the parties would not have entered into such an agreement absent a mutual intent that each be bound to do something!

Nor do any of the other counts of the board's affirmative defenses allege facts legally sufficient to render the lease invalid.

Accordingly, we affirm in toto.

The facts underlying this dispute can be simply stated. In order to finance the construction of a new county building, the board on March 26, 1982, adopted a resolution creating a Public Building Commission pursuant to the Public Building Commission Act. (Ill. Rev. Stat. 1981, ch. 85, pars. 1031 through 1054.) On November 3, 1982, the board, pursuant to a resolution of the same date, entered into a lease agreement with the PBC.

On December 13, 1982, the board rescinded its prior resolution providing for the execution of the above lease, and on February 28, 1983, the board attempted to dissolve the PBC. The first PBC's debts were purportedly assumed by a second public building commission. (The term "PBC," when used in this opinion, refers to the first PBC created on March 26, 1982.)

On March 4, 1983, the PBC filed a complaint for declaratory judgment, requesting a declaration that the lease was valid and binding on the county of De Witt (county), and that the county was obligated to make payments at the times and in the amounts specified in the lease.

On July 13, 1983, the circuit court granted the board leave to file affirmative defenses. The board's defenses were that the lease in effect provides for an impermissible contingency fund in excess of 5%, lack of mutuality of obligation in the lease and inadequacy of consideration, breach by the PBC of a fiduciary relationship subsisting between it and the county, the validity of the board's resolution providing for rescission of the resolution authorizing execution of the lease on the ground that the former resolution was a reasonable "act of legislative discretion," and nonexistence of the lease due to the purported dissolution of the PBC. On the same day, the court granted the PBC's motion to dismiss these defenses. However, the court granted the board leave to file amended versions of the lack of mutuality, breach of fiduciary relationship and nonexistence of the lease defenses, which the board did on July 6, 1983. On August 24, 1983, these amended defenses were dismissed on the PBC's motion.

The court granted the PBC's motion for judgment on the pleadings on September 30, 1983. As the basis for its decision, the court held that neither party alleged ambiguity in the language of the lease, that the language of the lease was clear and unambiguous and expressed the intent of the parties to the lease at the time that they entered into it, and that the lease, as written, was enforceable against the parties. The board appeals this decision.

For purposes of this litigation, the salient terms of the lease are as follows: (1) The PBC, with reasonable promptness, shall issue bonds of finance the construction of the new county building; (2) "any delay of any length to issue the Bonds shall not affect the irrepealable nature of the Lease" as long as any indebtedness is outstanding; (3) the PBC shall "as soon as practicable" enter into contracts for the construction of the building; (4) the PBC is authorized to make major changes in the plans and specifications for the building, the only prerequisite to the exercise of this power being a duty of prior consultation with the board; (5) the PBC will use its best efforts to complete construction at the earliest possible date; however, failure to deliver possession of the completed building shall not relieve the county of its obligation to pay the fixed annual rentals specified by the lease; (6) "[d]etermination of the dates on which the County may assume possession [of the new building] shall be within the sole judgment of the [Public Building] Commission * * *"; (7) the term of the lease is 10 years; (8) rental in the amount of $700,000 is due on November 1 of each year from 1983 through 1992; (9) the county shall levy taxes at an increased rate sufficient to pay rent under the lease, and additional taxes levied for this purpose shall not be used for any other purpose; (10) upon payment of all of the PBC's bond and other indebtedness, the unexpended balance in "all accounts of the revenue fund established by the Bond Resolution" shall be returned to the county; and (11) the total estimated all-inclusive cost of the project is $2.5 million. (This last item appears in the preliminary recitals section of the lease.)

The paragraphs of the lease upon which the board relies as support for its assertions that the lease lacks mutuality of obligation and is unsupported by adequate consideration are set out below in their entirety:

"SECTION VI

NONCANCELLABLE

This Lease shall be deemed and construed to be noncancellable by the county during the term hereof, and the county shall pay to the Commission absolutely throughout the term of this Lease the rent and all other payments required hereunder, free of any deductions, without abatement, deduction or setoff for any reason or cause whatsoever including, without limiting the generality of the foregoing:

(i) The failure, for whatsoever cause, to acquire the Site and to complete the Project, or the failure from whatsoever cause of the Project to comply in any respect or respects with said plans and specifications;

(ii) The failure to acquire the Site and to complete the Project thereon at or before the beginning of the term of this Lease;

(iii) Any damage to or destruction of the demised premises or any part thereof, or any delay, interruption or prevention from any cause whatsoever of the use of [sic] occupancy of the demised premises or any part thereof, and whether or not resulting from any act of God or the public enemy, or from any restriction or requirement of law, ordinance, rule or regulation of any public body or authority, state or federal, having jurisdiction over the demised premises (whether such restrictions or requirements relate to the use or occupancy of the demised premises or the quality, character or condition of the demised premises, or any part thereof, including the buildings, improvements, and equipment thereon or therein, or otherwise);

(iv) Any failure of or any defect in the Commission's title to the demised premises whether or not such failure or defect interferes with, prevents or renders burdensome the use or ...


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