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Pepper Pot Ii, Inc. v. Imperial Realty Co.

OPINION FILED MAY 21, 1985.

PEPPER POT II, INC., PLAINTIFF-APPELLEE,

v.

IMPERIAL REALTY COMPANY ET AL., DEFENDANTS-APPELLANTS (THE FIRST NATIONAL BANK OF HIGHLAND PARK, TRUSTEE, COUNTERPLAINTIFF-APPELLANT,

v.

PEPPER POT II, INC., COUNTERDEFENDANT-APPELLEE).



Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.

JUSTICE PERLIN DELIVERED THE OPINION OF THE COURT:

Rehearing denied July 2, 1985.

In February 1974, a three-year lease expiring September 30, 1977, was entered into between American National Bank & Trust Company of Chicago, as trustee under trust No. 16324, as lessor, and Normandie Inn Corporation, as lessee, for the premises located at 105 North Dearborn Street in Chicago. Paragraph 23 of that lease gave the lessee two options to renew: for a 6 1/2-year period (October 1977 through March 1984) and, if this first option was exercised, for a 10-year period thereafter (April 1984 through March 1994).

In December 1974, lessee Normandie Inn Corporation assigned the lease to the plaintiff/counterdefendant herein, The Pepper Pot II, Inc. (Pepper Pot).

In March 1977, Pepper Pot notified the lessor, trustee American National Bank, that it intended to exercise the renewal option through March 1984.

At some time thereafter, American National Bank assigned the lease to the First National Bank of Highland Park as trustee under trust No. 2255 (Highland Park Trustee). (While Highland Park Trustee asserts that Pepper Pot "knew" of this assignment, the record is inconclusive on this point).

Pursuant to the lease, if Pepper Pot intended to exercise its right to renew for the 10-year period commencing March 1984, Pepper Pot was required to give "written notice to the lessor" on or before September 30, 1983.

On September 30, 1983, Pepper Pot's attorney mailed a letter on his client's behalf addressed to "Mr. Lawrence Clairmont" and "Mr. Allen Clairmont" at "Imperial Realty Company" advising of Pepper Pot's intention to exercise its option to renew the lease for the additional 10 years. The letter was mailed on September 30, postmarked on October 3 and received at Imperial Realty Company on October 4, 1983. On November 9, 1983, Larry Klairmont sent a letter to Pepper Pot in which he advised that Pepper Pot's letter purporting to renew the lease was "not made within the time required" under the lease and that Pepper Pot's lease would therefore terminate on March 31, 1984.

Pepper Pot thereafter filed an action for declaratory relief against "Imperial Realty Company, Lawrence Klairmont and Allen Klairmont," requesting the circuit court to adjudicate the parties' rights under the lease, and to declare that Pepper Pot had timely exercised its right of renewal through March 1984. (Plaintiff also requested certain monetary damages not here relevant.)

Defendants filed a motion to dismiss, alleging that plaintiff failed to "name any lessor under the lease" and that Alfred Klairmont, Larry Klairmont and Imperial Realty are not beneficiaries under the "American National Bank" land trust.

The trial court denied defendants' motion to dismiss and instead allowed Pepper Pot to amend its complaint, correcting the names of the individual defendants. Defendants' answer to the complaint affirmatively stated that the Highland Park Trustee was the lessor of the subject premises.

Thereafter Highland Park Trustee filed a countercomplaint for declaratory relief against Pepper Pot wherein it alleged that it was the "lessor" under the lease in issue, and that Pepper Pot had failed to give Highland Park Trustee proper notice of its intention to renew the lease. The countercomplaint asked the court to declare the lease terminated as of March 31, 1984, and to award possession of the premises to the Highland Park Trustee. Attached to the trustee's complaint was the affidavit of Larry, not "Lawrence," Klairmont stating that he was "sole beneficiary" of Highland Park Trust No. 2255.

Defendants then filed a motion to dismiss the declaratory relief count of Pepper Pot's complaint, contending that Pepper Pot's notice to renew the option was void because it was not given to the "lessor" of the ...


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