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Orchard Shopping Center v. Campo





Appeal from the Circuit Court of St. Clair County; the Hon. James K. Donovan, Judge, presiding.


The plaintiff, Orchard Shopping Center, Inc., brought this action to recover unpaid rent in the amount of $16,300 and attorney fees and costs from the defendants Michael Campo and John Rimar. The action was based on a written lease agreement between the plaintiff as lessor and Michael Campo and Gerald Hillyard as lessees. Gerald Hillyard died prior to the commencement of the suit. The plaintiff alleged in its first amended complaint that Gerald Hillyard and Michael Campo had assigned their interest to John Rimar. Following a bench trial the trial court found that there had been an oral modification of the lease between plaintiff and defendant Campo, which had resulted in a rescission of the lease agreement. The trial court found further that plaintiff's actions estopped their claim regarding defendant Campo. The court found the defendant Rimar liable for damages during the period in which he was in possession of the estate. The court entered judgment against plaintiff in favor of defendant Campo and in favor of plaintiff against the defendant Rimar in the amount of $1,300 and denied the plaintiff's claim for attorney fees. The trial court also entered judgment in favor of the defendant Rimar against the defendant Campo on the counterclaim of the latter. The defendant Rimar's post-trial motion for modification of the judgment, by crediting him with a $650 deposit, was denied. The plaintiff brought this appeal raising three issues: (1) whether the trial court's findings that defendant Campo was released from liability and that plaintiff was estopped from its claim against him was against the manifest weight of the evidence; (2) whether the trial court erred in finding defendant liable only for the time he was in possession of the property because, the plaintiff urges, the agreement with Rimar was an assignment rather than a sublease; and (3) whether the denial of attorney fees and costs was erroneous. No appeal has been taken concerning the part of the judgment dealing with the counterclaim.

The five-year lease, effective June 15, 1978, between plaintiff and Hillyard and Campo, d/b/a Quality Meat and Produce, was executed on May 16, 1978. In paragraph 36 the lease provides that it "contains the entire agreement between the parties and executory agreement made hereafter shall be ineffective to change, modify, or discharge this lease in whole or in part, unless such executory agreement is in writing and signed by the party against whom enforcement of the change, modification or discharge is sought."

At the hearing conducted on September 5, 1984, the plaintiff called the defendant Campo as an adverse witness pursuant to section 2-1102 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2-1102). He testified that he and Hillyard had rented the premises in question to operate a butcher shop. After nine months of operation, the butcher shop did not generate enough income to support "two families," whereupon Campo sold his share of the business to Hillyard. The defendant, likewise, called the defendant Rimar as an adverse witness. He testified concerning the "Sublease Agreement," prepared by his attorney, between himself as "sublessee" and Hillyard as "sublessor" of the premises of the butcher shop. Rimar's son had operated a butcher shop in the premises between approximately December of 1979 and November of 1980, at which time the witness had executed a seven-day option to cancel the "Sublease Agreement" by presenting the cancellation notice to Hillyard.

Frank King, an owner and officer of the plaintiff corporation, testified concerning the "Lessor's Consent to Sublease," dated December 15, 1979, by which the plaintiff consented to the "subleasing" to Rimar of the premises in question. He testified further that the monthly rental for the property in question was $650 and that rent had been paid from September 15, 1978, to August 15, 1980. He had, he said, received a check for $1,300 on October 8, 1980, that had been returned for insufficient funds. That check would have paid the rent through October 15, 1980. Once the property became vacant he received inquiries from persons interested in renting it, but none of them resulted in rental of the property prior to October of 1982, he said, when the Son-Life Fellowship Church went into possession of it. He testified that during the period of vacancy he had not refused to rent to anyone, that during that time Son-Life Fellowship Church, which already rented certain space from plaintiff, had expressed the wish to the plaintiff to rent additional space, and that the plaintiff would have preferred high-volume retail-sales lessees in the shopping center.

Richard McGovern, an attorney and an owner and officer of the plaintiff, likewise, testified that the property was vacant from the latter part of 1980 until October of 1982, when Son-Life Fellowship Church took possession of it. On cross-examination he stated that he did not recall having told Campo that he was going to be released from the lease but recalled that after Campo and Hillyard had terminated their business relationship the witness had talked with Campo "about owing the money." In his deposition, however, taken on March 3, 1982, he had recalled having spoken with Campo "about somebody taking over the lease" but made no mention in the deposition of having talked with Campo about any money owed. The witness testified further that he had prepared an "Agreement," dated September 30, 1981, by which Sharon Hillyard, widow of Gerald Hillyard, who died on January 13, 1981, would pay $9,150, to the plaintiff. McGovern had taken the proposed agreement to her house and presented it to her, but she would not sign it. He denied that he had told Sharon Hillyard that Campo was no longer liable on the lease and stated that he had not approached Sharon Hillyard until that time for the reason that "she wasn't liable." He testified that prior to October of 1982 the Son-Life Fellowship Church was already leasing some space from plaintiff and that between October of 1980 and October of 1982 the church had approached him about leasing certain additional space, which was already rented by P.N. Hirsch. On cross-examination he said that the church never asked to rent the property in question other than just prior to October of 1982, as, for example, in 1980 or 1981 and that "[h]ad they asked me, I would have been glad to rent it to them." He stated further on cross-examination that he had had no objection to the arrangement of Hillyard and Rimar because "It was just a sublease," by which McGovern said he meant that "[Rimar] wasn't taking an assignment of the existing lease." Rimar had not, he said, told him that the business was a failing one that he was going to try to salvage and that because of its history of failure Rimar had agreed with Hillyard to cancellation on seven days' notice. On redirect he said that the plaintiff had never released Hillyard, Campo, or Rimar in any way from any liability arising out of the lease and "Sublease Agreement" and stated further: "I will repeat it very clear [sic]. I never told anybody that they were released from any obligations under any of these documents." He asserted that he had never told any of the three persons involved that he had released any of the other parties from their obligations under "these documents." Asked on re-cross, "And just so I get it clear in my mind, the only time that Son-Life came to you and wanted to rent part of this shopping center that they didn't get is what they wanted to get the P.N. Hirsch store moved around, is that correct?" he answered, "That's correct."

The defendant Campo called Sharon Hillyard to testify in his behalf. She stated that McGovern had come to her house around September 30, 1981, with the proposed agreement, about which he had testified. She described the episode in the following way:

"He came to the house with this paper and asked me if I would sign it. He said you know and I know that Mike Campo is no longer on the lease. And he said the person that you seem to be you would (I would assume that you would like to clear up all of your husband's debts. And I said, yes, I would, but I would like to show this to my brother before I sign anything. And instead of taking it to my brother, I took it to my lawyer, Rich Tognarelli; and he told me that if I had signed it, that I would have been legally responsible to pay this amount. But he did say and I know for a fact that Mike Campo was not on the lease, that my husband had taken him off."

She testified further that McGovern had refused to lease the building to Tom Geers, who was interested both in buying the equipment in the butcher shop from her and in renting the premises in question in order to operate a butcher shop, unless the witness paid plaintiff $9,150, which was the amount stated on the proposed agreement and constituted the amount of rent unpaid as of September 30, 1981. She stated that her husband had told on "[s]everal" occasions that Campo had been "taken off the lease." She said, "He just told me that he had him taken off. Then I seen [sic] a lease paper with just my husband's name on it, a new lease drawn up." She had been unable to find it in the butcher shop, recalling it in a file cabinet or desk in the butcher shop. She said that she had seen the lease at her home when her husband had brought it home and "when I got back into the butcher shop, the file cabinet and the desk and everything had been moved to the other side of the building and the church was using them." "Shortly after Mike Campo got out of the store," she said, her husband "just put it on the table and said there is the new lease, and Mike is off of it." She elaborated: "I remember my husband bringing the paper, laying it on the dining room table, saying here is the new lease, Honey; and he said Mike is off of it. I said well, good, because we knew how bad Mike wanted off the lease." She stated that the new lease was between plaintiff and her husband alone. She stated that she knew Rimar had stopped operating the butcher shop because he had notified her husband in writing that he was leaving the butcher shop on a certain date. After her husband's death, she said, her brother, Ed Nesbitt, had tried to help her sell the business and that

"he had talked to Dick McGovern and that he had told him that we had a buyer [Tom Geers] for the store and that he wanted to work out a new lease for this Tom Geers, and Dick McGovern said fine; and I got all of the equipment fixed and everything, and then Dick McGovern wouldn't lease the building to him."

The proposed agreement of September 30, 1981, which is signed by Richard McGovern for the plaintiff, states in part:

"To induce Orchard to cancel said lease and enter into a new lease with Thomas Gehrs [sic] and Robert A. Gehrs [sic], Sharon Hillyard has agreed to pay to Orchard the sum of $ ____ representing the delinquent rent on the premises and therefore the parties agree as follows:

2) The undersigned will pay to lessors the sum of $9150.00 at the rate of $650.00 a month starting on October 15, 1981, and on the 15th day of each month thereafter * * *."

She testified that McGovern had refused to give Geers the lease until she had paid "the 9,000" and that McGovern had told her during a telephone call she had made to him concerning the lease with Geers that McGovern was "going to lease the building to [Geers] if I paid the $9,150." She stated that both ...

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