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Great American Fed. S. & L. v. Grivas

OPINION FILED SEPTEMBER 27, 1985.

GREAT AMERICAN FEDERAL SAVINGS AND LOAN ASSOCIATION, PLAINTIFF-APPELLEE,

v.

GEORGE GRIVAS, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. Francis W. Glowacki and the Hon. Frank Orlando, Judges, presiding.

JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:

Rehearing denied November 6, 1985.

Plaintiff brought an eviction action (Ill. Rev. Stat. 1983, ch. 110, par. 9-101 et seq.) to recover possession of restaurant premises occupied by defendant. Defendant filed a three-count counterclaim seeking reformation of the written lease, specific performance, and money damages resulting from fraud and deceit. Following a bench trial on the sole issue of defendant's counterclaim for reformation, the trial court denied reformation of the lease and subsequently granted plaintiff's motion for summary judgment for possession of the premises. Pursuant to Rule 304(a) (87 Ill.2d R. 304(a)) the court entered findings that there was no just reason for delaying enforcement or appeal of the final judgments as to reformation and possession. *fn1 Defendant appeals, raising two issues: (1) whether the trial court's finding that there was no mutual mistake of fact which would justify reformation in the use of an "office" form lease rather than a "store" form lease was reversible error; and (2) whether it was error to grant summary judgment when an issue of fact existed as to which party was entitled to possession of the premises.

Pertinent to our disposition are the following facts.

On July 12, 1983, plaintiff filed its verified complaint in forcible detainer against defendant to recover possession of the premises. Thereafter defendant filed his unverified answer denying that plaintiff was entitled to possession and affirmatively asserting that the lease did not end until June 30, 1992, pursuant to an attached exhibit. This exhibit consisted of a document entitled "Office Lease," showing a term of July 1, 1982, to June 30, 1992. This lease gave the lessor an option to terminate upon 30 days' notice.

Defendant subsequently filed a verified first-amended answer and counterclaim reasserting his superior right of possession by reason of the lease. In count I of his counterclaim he sought reformation of the lease, alleging, in part, that under a prior lease he had expended over $100,000 renovating the premises in reliance on plaintiff's assurances that the lease would ultimately be extended through June 30, 1987, and that defendant's renovation might result in an even longer extension. Defendant also alleged that on May 5, 1982, he received the new lease executed by plaintiff for a term beginning July 1, 1982, and ending June 30, 1992. Defendant contended that although both parties intended the new lease to be for a 10-year term, neither intended to use an office lease form which was inappropriate for a restaurant. They intended to use a store lease form similar to the prior lease between the parties. Defendant requested that the court reform the new lease with regard to provisions which did not apply to restaurants and which were never agreed upon, in particular the option-to-terminate provision. Count II of the counterclaim prayed for specific performance of the new lease as reformed by the court. Count III of the counterclaim sought recovery of $117,000, which defendant allegedly expended to remodel the premises in reliance upon plaintiff's alleged fraudulent or negligent oral misrepresentations. The prior lease attached as exhibit B was entitled "Store Lease" and contained no option-to-terminate provision.

Plaintiff's verified answer to defendant's counterclaim denied all material allegations of those counterclaims except that it admitted that defendant had informed plaintiff that he wished to borrow $50,000 to $100,000 to renovate the premises and sought a 10-year lease.

Plaintiff subsequently filed a five-count amended and supplemental complaint. Count I alleged that plaintiff offered to lease the premises to defendant pursuant to a written lease proposal (attached as exhibit A) which it tendered to defendant. The tendered proposal contained an indefinite and uncertain term of duration in that the term was mistakenly shown as beginning on July 1, 1982, and ending on June 30, 1982. Although the parties did not agree to the duration of the lease they entered into a tenancy relationship as of July 1, 1982. On July 29, 1983, plaintiff served defendant with a 30-day notice of termination, but defendant unlawfully withheld possession. The attached exhibit A was entitled "Office Lease," showed a term beginning July 1, 1982, and ending June 30, 1982, and contained the option-to-terminate provision.

Count II of plaintiff's amended supplemental complaint similarly alleged that the parties did not agree to the duration of the lease, but that on March 23, 1983, and June 16, 1983, plaintiff served defendant with notices of termination of the tenancy as of June 30, 1983, and attached copies of the notices. Plaintiff's alternative count III alleged that plaintiff leased the premises to defendant for a term beginning July 1, 1982, and ending June 30, 1983; that defendant failed to surrender possession on June 30, 1983; and that defendant continued to unlawfully withhold the premises.

Plaintiff's alternative count IV alleged that plaintiff executed and mailed a lease to defendant intending and believing the term provided for an ending date of June 30, 1983, and did not realize that due to a scrivener's error the lease mistakenly showed an ending date of June 30, 1992. Defendant knew the ending date of June 30, 1992, was a mistake, and knew that plaintiff intended to offer only a one-year lease ending June 30, 1983, but nevertheless executed the document without disclosing the 1992 ending date to plaintiff until after his receipt of the March 23, 1983, notice of non-renewal. Defendant refused to vacate and continued to withhold possession despite plaintiff's repeated demands. Plaintiff's alternative count V alleged that it leased the premises to defendant pursuant to either the lease proposal ending June 30, 1982, or pursuant to the purported lease ending June 30, 1992, but that the ending date of the latter had been altered from 1982 to 1992 without plaintiff's knowledge or consent after plaintiff executed the lease. In either event the parties agreed in paragraph 11 to the option-to-terminate provision. Count V further alleged that on July 29, 1983, plaintiff exercised its option to regain possession of the premises by serving such notice upon defendant, and that defendant refused to surrender possession of the premises and pursuant to other provisions of the lease owed plaintiff liquidated damages.

Defendant's verified answer to the amended supplemental complaint denied that the lease contained an uncertain and indefinite ending date in that the term ended on June 30, 1992, but admitted that plaintiff served him with a 30-day notice of termination of the tenancy on July 29, 1983. Defendant averred that plaintiff honored the past representation that it would extend the lease for five years, that he received a fully executed 10-year lease, but that plaintiff either innocently or fraudulently prepared the lease on an "Office Lease" form rather than a "Store Lease" form. Defendant denied that the ending date of June 30, 1992, was a mistake or that he knew it was a mistake.

At the trial on count I of defendant's counterclaim for reformation, defendant testified that he moved to this country from Greece and never learned to read English although he then identified his signature on various pleadings containing affidavits attesting that he had read and understood the contents of the pleading and his signature on an application for a liquor license. He further testified that he had filled out the liquor license application dated April 16, 1982, in which he stated under oath that his lease ran until September 14, 1984, even though the existing lease showed it would expire on June 30, 1982. Defendant explained that he had to put something on the application or he would not get a liquor license.

In further testimony defendant stated that in 1976, he told Mr. Hollis, plaintiff's vice-president, that he wanted to remodel the premises and needed a longer lease. In June 1977, Hollis brought him a new lease which extended the term of the original lease until June 30, 1982, that defendant then told Hollis that he needed a longer term because he would have to spend over $100,000 for remodeling, that Hollis told him that plaintiff would give him a five-year lease when the extension expired, and defendant then spent over $100,000 remodeling the premises. In February 1982 he learned that Hollis was no longer with the bank. His replacement, Raymond Kaufman, told him he could have a one-year extension of the lease. When defendant informed him of Hollis' promise, Kaufman stated that he would look into the duration of the lease. In May 1982, defendant received a letter from plaintiff which was opened by Christine Spanos. The parties stipulated that if she were called to testify she would state that she opened the letter and found inside a 10-year lease.

Defendant testified that he only read the portion of the lease regarding its duration and rent and then signed the original and two copies, executed by Kaufman, and returned the copies to plaintiff. He did not show the lease to a lawyer before signing it because he thought the terms were the same as in the previous lease. Kaufman never told him he was changing the lease form. Defendant acknowledged in his testimony that he received a letter from plaintiff ...


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