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03/03/88 Uidc Management, Inc., Et v. Sears

March 3, 1988





520 N.E.2d 1164, 167 Ill. App. 3d 81, 117 Ill. Dec. 813 1988.IL.288

Appeal from the Circuit Court of Cook County; the Hon. Robert L. Sklodowski, Judge, presiding.


JUSTICE JIGANTI delivered the opinion of the court. JOHNSON and LINN, JJ., concur.


This is a declaratory judgment action. The trial court dismissed the complaint of the plaintiff, UIDC Management, Inc., on a motion to dismiss pursuant to section 2-615 of the Illinois Code of Civil Procedure. Ill. Rev. Stat. 1985, ch. 110, par. 2-615.) 1 The only issue before trial court and before this court is whether the complaint states a cause of action.

The defendant, Sears, Roebuck and Company, Marshall Field & Company, J. C. Penney Properties, Inc., and the plaintiff, UIDC, owned contiguous properties in Orland Park and on March 15, 1976, entered into what was termed an "Easement and Operating Agreement." With UIDC as the developer, the parties agreed to their mutual benefit to construct a shopping center to be known as Orland Square. Each of the parties retained title to its respective real estate. The complaint alleges that the same parties had entered into similar agreements at Oak Brook and three other shopping centers. The contract, which was to continue in operation for 35 years after the shopping center opened, provided that maintenance of Orland Square shall be "in a first-class manner with the same high quality standards as that provided in the Oakbrook Shopping Center, Oak Brook, Illinois." At the same time of the execution of this agreement, it had been the custom and practice of the parties at the other centers that UIDC exclusively would maintain all common areas in the center, including the common areas on Sears' property.

On December 13, 1976, UIDC submitted to Sears confirmation of the fraction to be used to calculate Sears' pro rata share of common-area costs incurred by UIDC in maintaining the exterior common area for "1976 and subsequent years." That percentage was 0.1585 as confirmed by a response from Sears one week later and was used over the years to calculate Sears' pro rata share of the maintenance. UIDC alleged that each year from the time that the shopping center was constructed in 1976 through 1984 UIDC maintained all of the common areas at Orland Square in a first-class manner according to the standards of the Oak Brook Center.

On December 31, 1984, Sears informed UIDC that Sears intended to perform its own maintenance. UIDC originally contended that under the terms of the easement and operating agreement UIDC had the right and obligation to perform the maintenance. The trial court found that Sears had the right to perform its own maintenance and that finding was affirmed on a prior appeal to this court. (UIDC Management, Inc. v. Sears Roebuck & Co. (1986), 141 Ill. App. 3d 227, 490 N.E.2d 164.) Although we affirmed that finding, we remanded the matter back to the trial court to give UIDC an opportunity to amend the complaint, as it had previously requested the trial court, on the legal theories of estoppel and waiver.

UIDC did in fact file an amended five-count complaint seeking declaratory relief on the issues of waiver, estoppel, modification of contract, laches and one count for breach of the contract subsequent to the termination of UIDC's services. The dismissal of all five counts of the UIDC complaint brings about this appeal.

The first count asks for a declaration that Sears has waived its right under the contract to maintain the common areas on its property and that UIDC is entitled and obligated to maintain exclusively all common areas at the center, including those located on Sears' property. It further asks that by virtue of the waiver Sears be required to pay to UIDC Sears' pro rata share of the common-area maintenance charges. The allegations in the complaint are not specific as to the timing, but it is clear from the arguments before the trial court and this court that the declaration proposed by UIDC is to cover the balance of the contract term, approximately 25 years. UIDC contends that relying on a good-faith interpretation of the agreement and on Sears' conduct and correspondence, Sears has waived all provisions in the operating agreement which permitted Sears to maintain the common areas located on its parcel. In exchange for this waiver Sears received valuable consideration in the form of economies of scale and has also benefited by UIDC's extensive experience in shopping center management. UIDC also contends that the custom and practice of the parties during the term of the operating agreement evidences the fact that Sears intentionally relinquished its right to maintain the common areas located on its parcel.

Waiver is the intentional relinquishment of a known right. It can be demonstrated by words or by conduct. (Lempera v. Karner (1979), 79 Ill. App. 3d 221, 223, 398 N.E.2d 224.) It can also be inferred from delay in asserting a right. (First Trust & Savings Bank v. Skokie Federal Savings & Loan Association (1984), 126 Ill. App. 3d 42, 45, 466 N.E.2d 1048.) To be deemed a waiver the acts must be inconsistent with an intention to insist upon the right and must show an intentional relinquishment of that right. (John Kubinski & Sons, Inc. v. Dockside Development Corp. (1975), 33 Ill. App. 3d 1015, 1020, 339 N.E.2d 529.) Given these propositions of law, we do not believe that the facts alleged by UIDC are sufficient to raise the issue of waiver.

Waiver commonly occurs in situations where a party to a contract has the right to expect certain performance within a definite period of time. If the parties act inconsistently with that time provision, then the provision is considered waived and the contract proceeds accordingly. The requested finding of waiver in the present cause is significantly different. The effect of a finding of waiver of the provision in the contract that allows Sears to maintain its property in effect creates a new contract because it requires that for the remainder of the contract term, approximately 25 years, UIDC will maintain the property. The terms of this proposed implied contract are highly uncertain. The fact that the terms are not precise does not mean that there could not be such an implied contract. However, it militates against the concept advanced by UIDC, that is, that by waiving the right to enforce the provision of the contract to maintain its own premises, Sears intended to enter into a separate maintenance agreement for a period of 25 years. In our view, the fact that for over a period of nine years Sears permitted UIDC to maintain the property and paid its share of the maintenance does not constitute conduct inconsistent with an intention to insist upon its right to maintain its property during the remaining 25 years of the contract term.

Relying on the same facts, UIDC contends that Sears is estopped from refusing to hire UIDC for the remaining 25 years of the contract term. To invoke the doctrine ...

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