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Artoe v. Cap





Appeal from the Circuit Court of Cook County; the Hon. Myron T. Gomberg, Judge, presiding.


Plaintiff, Lee Artoe (hereinafter lessor), filed suit against defendants Larry Cap and Margaret Cap (hereinafter Lessees) for fire damage to a building owned by the lessor. The lessees had leased from the lessor a portion of the premises that were damaged by that fire; defendant Ted Zautis was the guarantor of the lease. The complaint filed by the lessor alleged counts in negligence, wilful and wanton misconduct and breach of contract. Thereafter, the lessees filed a motion to dismiss the complaint. In response, the lessor filed a first amended complaint. After the lessees again filed a motion to dismiss, the lessor filed a second amended complaint. At that point, the lessees filed another motion to dismiss. After a hearing on that motion, the second amended complaint was dismissed, and the lessor was denied leave to further amend.

The lessor appeals only from the dismissal of the sixth count of the second amended complaint, which alleged a breach of contract on the part of the lessees. The lessor contends that that count stated a valid cause of action for breach of contract.

The lessor is the owner of a two-story commercial building located at 938 to 944 West Belmont Avenue in Chicago. The ground floor contains four store units, one of which was rented to the lessees for use as an ice cream store and short-order restaurant. The lease period started on April 1, 1983, and ran for a period of one year, with the monthly rent being $1,200. The form portion of the lease agreement contained the following paragraphs. Paragraph 6 provides:

"Lessee shall keep the Premises * * * and shall yield the same back to Lessor upon the termination of this lease, whether such termination shall occur by expiration of the term or in any other manner whatsoever, in the same condition of cleanliness, repair and sightliness as at the date of the execution hereof, loss by fire and reasonable wear and tear expected."

Paragraph 12 provides:

"At the termination of this lease, by lapse of time or otherwise, Lessee will yield up immediate possession of the Premises to Lessor, in good condition and repair, loss by fire and ordinary wear excepted, and will return the keys therefor to Lessor at the place of payment of rent."

There was also a rider to that lease which included paragraph 28(a)(b). It stated as follows:

"Lessee agrees to furnish and maintain at its sole cost and expense, for and during the term of this lease or any extension thereof;

(1) Comprehensive bodily injury and property damage liability insurance covering all claims in any way related to the demised premises with limits of liability of not less than $500,000.00 for injury to or death of any one person and not less than $1,000,000.00 for injury to or death of more than one person in any one occurrence, and not less than $500,000.00 for property damage, such insurance to name lessor as an additional insured.

(2) Workmen's Compensation Insurance.

(3) Fire and extended coverage insurance in an amount sufficient to replace the building for which the demised premises are a part covering all losses related to or arising from activities of the lessee in the demised premises, said insurance to be payable to lessor.

(4) all such other insurance relating to the premises leased hereunder and all activities conducted thereon as may be required by lessor from time to time."

Paragraph 28(b) provides:

"All such insurance shall be in a form, and with companies, satisfactory to lessor, and all such policies shall provide that they may not be cancelled without at least fifteen days prior written notice to the lessor. Lessee shall deliver certified copies of the policies to the lessor within ten days of the beginning of the term of this lease and renewal policies shall be obtained and certified copies thereof delivered to the lessor, at least thirty days before the expiration date of any policies hereunder. In the event lessee shall at any time fail to furnish, maintain or renew any of such insurance, or to furnish said certified copies of policies, within the time herein provided, lessor shall have the right, but shall not be obligated to provide the same, and all amounts paid by lessor in connection therewith shall constitute so much additional rent and shall be paid with the installment of rent next due hereunder."

Paragraph 37 provides in relevant part:

"It is specifically understood and agreed, in the event of a conflict in the terms of this Rider and the provisions of the lease to which it is attached, that the terms of this supplemental agreement shall control."

On August 12, 1983, there was a fire in the store rented to the lessees which substantially damaged that store and the adjacent stores, plus the second floor and roof of the building. In his initial complaint, the lessor alleged that this fire originated in the lessees' store. Plaintiff also alleged that the fire was caused by deliberate acts and/or negligence on the part of the lessees. Apparently, the lessor had repeatedly requested evidence of insurance, both by oral demand and certified mail. Allegedly, several days before the fire plaintiff was told by the lessees and their insurance agent that an insurance policy had been placed and that evidence would therefore be forthcoming. However, after the fire plaintiff discovered that the lessees had not obtained any insurance.

As stated above, the lessor's second amended complaint alleged several counts in negligence, and in count VI it alleged breach of contract. Count VI stated as follows:

"1. The plaintiff [lessor] and defendants [lessees] are residents of Cook County, Illinois.

2. The plaintiff owns a commercial building at 938-944 West Belmont Avenue, Chicago, Illinois.

3. The defendants, LARRY CAP and MARGARET CAP leased a store from the plaintiff at 938 West Belmont Avenue, Chicago, Illinois under a lease dated February 23, 1983 for a term of one year beginning ...

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