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06/17/87 Madison Associates, v. Harvey B. Bass

June 17, 1987








511 N.E.2d 690, 158 Ill. App. 3d 526, 110 Ill. Dec. 513 1987.IL.831

Appeal from the Circuit Court of Cook County; the Hon. Louis J. Giliberto, Judge, presiding.


PRESIDING JUSTICE McNAMARA delivered the opinion of the court. WHITE and FREEMAN, JJ., concur.


Plaintiff Madison Associates, a landlord, brought this action to enforce statutory and contractual remedies against its tenant, Harvey B. Bass, seeking back rent and interest, possession of the leased offices, and attorney fees. Defendant subsequently filed a counterclaim, alleging negligent repairs, breach of contract, and fraudulent inducement to execute a settlement agreement. The trial court entered summary judgment for plaintiff on the fraud counterclaim and dismissed the negligent repairs and breach of contract counts in the counterclaim. At the Conclusion of a jury trial, the trial court directed verdicts in favor of plaintiff for rent in the amount of $272,318.53 and for possession. The jury returned a verdict for plaintiff on the issue of attorney fees under the lease and awarded plaintiff $12,634.92. The trial court entered judgments on the verdicts. Defendant appeals from the award of summary judgment on the fraud count of the counterclaim, the directed verdict for rent, and the jury verdict for attorney fees.

On appeal, defendant contends that the trial court abused its discretion in denying his request for a continuance; that the trial court erred in entering summary judgment on the counterclaim's count which alleged fraudulent inducement to enter into a settlement agreement; and in granting plaintiff's motion in limine which prohibited reference to the circumstances surrounding the June 1985 settlement agreement; and that the trial court's erroneous entry of summary judgment on the fraud count precluded defendant from recovering punitive damages and attorney fees. Defendant also contends that the trial court erred in directing a verdict in favor of plaintiff for rent; that the jury verdict for attorney fees should be set aside; that the trial court induced defendant's failure to present evidence to support his claim for lost profits; and that the trial court erred in denying defendant's motion to conform the pleadings to the proof by adding claims for breach of covenant of quiet enjoyment and breach of duty to repair space.

In August 1980, defendant, an attorney, signed a 10-year lease for a suite of offices in Three First National Plaza in Chicago. The lease provided for monthly rent and interest for past due rent. The tenant would pay reasonable attorney fees incurred by plaintiff in enforcing the lease. From the beginning of defendant's occupancy in April 1982 until June 1985, defendant withheld virtually all rent payments because of leaks in the roof and heating and air-conditioning problems.

The parties entered into a settlement agreement dated June 3, 1985. Under the agreement, defendant was to pay $353,366.91 for rent and miscellaneous charges, with a rent abatement of $158,210.01, leaving a balance of $195,156.90. Defendant was to pay plaintiff $46,932.17 immediately. He was to pay the balance of $148,224.73 plus 12% compounded interest in monthly installments of $3,297.18, along with the regular monthly rent, beginning on June 1, 1985. In the event of default, the entire unpaid balance of back rent and interest would immediately come due. If plaintiff brought suit, defendant would pay reasonable fees and costs.

Defendant did not make the initial payment of $46,932.17. He also did not make either the back rent payments of $3,297.18 or the regular monthly rent payments for June through September 1985. On September 4, 1985, plaintiff gave defendant written notice of the deficiencies and requested payment. After defendant failed to pay the monthly rent for October, on October 9, 1985, plaintiff served defendant with a five-day notice and demand for accelerated payment. Defendant then paid his regular rent and back rent payments for October and November, but did not pay the June through September payments or the initial $46,932 payment. As of December 10, 1985, the December payments had not been made.

On December 27, 1985, defendant, acting pro se, filed his answer and request for a jury trial. After two continuances, the case was set for trial on January 21, 1986. Both parties answered ready for trial and seven jurors were selected. The trial court granted defendant a one-day continuance to respond to plaintiff's three motions in limine and a motion to amend the complaint to attach a copy of the amended lease and agreement.

On January 22, defendant requested a mistrial so that he could obtain counsel and have additional time to respond to the motions. After extensive Discussion, counsel withdrew his request, and the parties agreed that defendant would respond to the motions the following day, have the court hear arguments on January 24, and choose the remaining jurors on January 28. The court acknowledged the parties' agreement and stated that it would enforce the agreement in order to be fair to both sides and cautioned that no further continuances would be granted.

On Friday, January 24, defendant appeared with counsel, who filed appearances and sought another continuance on the grounds that the quick hearing contemplated by the Act was unnecessary because defendant was willing to give up possession; that defendant was an attorney but had no background in this area of law; and that because the amount of damages sought and the significant number of issues, counsel needed more time to prepare before trial. The court denied the request for a continuance, but granted defendant's request for leave to file a counterclaim the following week.

On January 27, defendant filed a counterclaim seeking damages for water infiltration occurring both before and after the June 1985 agreement was signed and asserting that plaintiff had fraudulently induced him to execute the settlement agreement and amend the lease. Defendant alleged that at the time he signed the agreement, plaintiff promised him that he would not have any roof leaks in the future. Count I alleged fraud; count II alleged negligent repairs; and count III alleged breach of contract. The counterclaim was subsequently amended to seek damages for roof leaks and heating and cooling problems occurring only after June 1985. Defendant sought compensatory damages, including lost profits and attorney fees, and $250,000 in punitive damages.

Plaintiff filed a motion to strike and dismiss the counterclaim and a motion for summary judgment as to the counterclaim. The court found that defendant had released and waived all claims he might have incurred due to water infiltration prior to June 3, 1985, the date of the settlement agreement and first amendment to the lease. The court granted plaintiff's motion in limine to exclude evidence of events leading up to the June 1985 settlement agreement. The court also dismissed without leave to amend counts II and III of the counterclaim.

The trial court later entered summary judgment for plaintiff on defendant's counterclaim alleging that he had been fraudulently induced to execute the settlement agreement and amended lease. The court denied defendant's request to certify its order granting summary judgment for interlocutory appeal. The court also denied defendant's request for a mistrial and a new Judge. On Thursday, January 30, 1986, the jury began hearing testimony.

Howard Callaway, a vice-president of the company acting as the building's managing agent, testified for plaintiff. Callaway denied telling defendant prior to June 1985 that he would not have leakage problems in the future. Callaway told defendant that repairs had been made and that he believed the leaks were fixed.

Richard J. Loeber, an employee of the building manager, testified for plaintiff regarding the records of defendant's complaints after June 1, 1985. There were seven complaints of cold temperatures. Four notations by building personnel showed the temperature was "fine": temperature at 71 degrees, thermostat at 73 degrees; thermostat changed; and thermostat at 73 degrees, 74 degrees. Regarding five complaints about heat, the building personnel notations showed: 72.5 degrees; 76/77 degrees; thermostat lowered from 76 to 71 degrees; 77 degrees; 78 degrees. After Loeber's testimony, plaintiff rested its case, and the court denied defendant's motion for a directed verdict.

Robert Guzman, an iron worker, testified for defendant regarding repairs he made to the building's roof in late 1984. The trial court sustained objections to Guzman's testimony, finding it violated the court's ruling excluding evidence of matters prior to June 1, 1985. An offer of proof was later made that Guzman would testify that as of December 1984 the roof repairs were substantially incomplete. The court found that pre-June 1985 conditions were irrelevant and that the offer of proof was factually insufficient.

Callaway was then called by defendant as an adverse witness. He testified that roof repairs were made in 1984, but no repairs were made after that date. Callaway characterized heating, ventilation and air-conditioning problems after June 1985 as minor. The court sustained plaintiff's objections to Callaway's testimony regarding events prior to June 1985.

Plaintiff objected to defendant's presenting Lloyd Wevang as an expert witness. Defendant had failed to identify Wevang as an expert pursuant to Supreme Court Rule 220, and the court sustained plaintiff's motion to disqualify Wevang.

John D. Hayes, an attorney, testified for defendant regarding lost business profits. The court sustained plaintiff's objections to any testimony regarding working conditions prior to June 1985.

Defendant attempted to make an offer of proof regarding what Robert Fink, an engineer, would testify to in regard to matters arising prior to June 1985. The court held that offers of proof could only be made as to matters which were dealt with in open court. Because there was no ...

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