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Mandelke v. Int'l House of Pancakes

OPINION FILED MARCH 7, 1985.

JEROME MANDELKE ET AL., PLAINTIFFS-APPELLANTS,

v.

INTERNATIONAL HOUSE OF PANCAKES, INC., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. Arthur L. Dunne, Judge, presiding.

JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

Rehearing denied April 11, 1985.

Plaintiff, franchisee-sublessee, brought a declaratory judgment action against defendant, franchisor-sublessor, seeking a declaration that defendant is liable for certain repairs to the leased premises under the terms of the franchise and lease agreements entered into between the parties. The trial court entered a judgment on the pleadings for defendant and plaintiff appeals.

We affirm the decision of the trial court.

The pleadings in this case set forth the following pertinent facts:

In October 1969, plaintiff, Jerome Mandelke, entered into franchise and sublease agreements with defendant, International House of Pancakes, Inc. (IHOP). The franchise and sublease agreements called for IHOP to construct, furnish and equip an IHOP restaurant and to sublease the restaurant to plaintiff, who would operate it as franchisee. Both agreements expire in October 1994.

Paragraph V of the sublease provides as follows:

"REPAIRS AND MAINTENANCE

Sublessor [IHOP] agrees to and will keep and maintain the roof and exterior walls, but not including any exterior doors, windows or other glass, in good order, condition and state of repair. Sublessee [Mandelke] agrees to and shall, at his own cost and expense, keep and maintain all of the remainder of the demised premises, including, without limitation, the interior of the building, windows and other glass and all of the exterior of the demised premises, including, without limitation, the parking area and exterior lighting, all signs, landscaping and exterior doors, in good condition and state of repair at all times during the term of this sublease."

Additionally, Section III(A) of the franchise agreement provides that "Franchisor shall lease (or sublease) to Franchisee land with building and appurtenances suitable for operation of the INTERNATIONAL HOUSE OF PANCAKES restaurant herein contemplated." The franchise agreement contains an integration clause which requires that the two agreements be construed together.

After execution of the agreement, IHOP constructed the restaurant and, in January 1970, plaintiff took possession of the premises. Plaintiff *fn1 has operated the premises as an IHOP restaurant since that date. Plaintiff paid a $50,000 franchise fee, and continues to pay $395 in minimum weekly rent and other charges to IHOP pursuant to the agreements.

In October 1976, an underground water main installed by IHOP during the original construction of the building began to leak, causing flooding problems in the restaurant parking lot. Plaintiff had these leaks repaired at a cost in excess of $2,800. Shortly thereafter, the water main again developed similar leaks. Plaintiff was advised that proper correction of the problem requires excavation of the parking lot and replacement of the water main at a cost of at least $10,000. Additionally, a brick exterior planter wall has deteriorated to the point where it must be rebuilt.

Based on these facts, plaintiff's complaint for declaratory judgment alleges that:

"the 1976 correction of the water main and the corrections presently required of it, as well as the rebuilding of the brick planter wall, do not constitute repairs for which MANDELKE is liable under the terms of said Franchise and Sublease but constitute items, the correction of which is the ...


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